10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________to__________________________

Commission File Number: 000-54582

United Cannabis Corporation

(Exact name of Registrant as specified in its charter)

Colorado	46-5221947
(State or other jurisdiction of incorporation or formation)	(I.R.S. employer identification number)

1600 Broadway, Suite 1600

Denver, Colorado 80202

 (Address of principal executive offices)

(303) 386-7321

(Registrant’s telephone number, including area code)

N/A

 (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨	Accelerated filer  ¨
Non-accelerated filer    ¨ (Do not check if a smaller reporting company)	Smaller reporting company  þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨  No þ

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

On August 13, 2015, there were 44,897,500 shares of the issuer’s common stock outstanding.

UNITED CANNABIS CORPORATION

INDEX

		Page No.
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS:
	Condensed Consolidated Balance Sheets — June 30, 2015 (Unaudited) and December 31, 2014	1
	Condensed Consolidated Statements of Operations (Unaudited) — Three and six months ended June 30, 2015 and 2014	2
	Condensed Consolidated Statements of Cash Flows (Unaudited) — Six months ended June 30, 2015 and 2014	3
	Notes to Condensed Consolidated Financial Statements (Unaudited)	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21
ITEM 4.	CONTROLS AND PROCEDURES	21
PART II	OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS	22
ITEM 1A	RISK FACTORS	22
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	22
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	22
ITEM 4	MINE SAFETY DISCLOSURES	22
ITEM 5	OTHER INFORMATION	22
ITEM 6	EXHIBITS	22
	SIGNATURES	23

PART 1.  FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

UNITED CANNABIS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2015			December 31, 2014
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	19,168		$	321,353
Accounts receivable, net		7,697			6,245
Due from related parties		5,000			44,012
Prepaid expenses		134,500			177,400
Total current assets		166,365			549,010
Intangible assets		19,994			18,210
Investments in non-marketable equity securities		593,750			593,750
Equity method investments		88,000			138,000
Total assets	$	868,109		$	1,298,970
LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	127,483		$	27,424
Accrued expenses		390,526			550,795
Current portion of deferred revenue		380,000			500,000
Notes payable		775,000			775,000
Total current liabilities		1,673,009			1,853,219
Long term liabilities:
Deferred revenue, net of current portion		473,750			443,750
Total liabilities		2,146,759			2,296,969
Stockholders' deficit:
Preferred stock, no par value; 10,000,000 shares authorized; none issued and outstanding		—			—
Common stock, no par value; 100,000,000 shares authorized; 44,857,500 (unaudited) and 44,020,000 shares issued and outstanding, respectively		2,915,168			1,538,968
Common stock outstanding, not yet issued; 40,000 shares		88,000			88,000
Accumulated deficit		(4,281,818	)		(2,624,967	)
Total stockholders' deficit		(1,278,650	)		(997,999	)
Total liabilities and stockholders' deficit	$	868,109		$	1,298,970

See accompanying notes to unaudited condensed consolidated financial statements.

1

UNITED CANNABIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenues:
Revenues, non-affiliates	$	313,360		$	—		$	397,765		$	—
Revenues, affiliate		—			—			4,425			—
Total revenues		313,360			—			402,190			—
Cost of revenues		(79,963	)		—			(107,018	)		—
Gross profit		233,397			—			295,172			—
Operating expenses:
Sales and marketing		—			68,158			1,700			74,158
Research and development		—			66,053			329			76,053
General and administrative		493,316			360,664			1,050,449			424,142
Total operating expenses		493,316			494,875			1,052,478			574,353
Loss from operations		(259,919	)		(494,875	)		(757,306	)		(574,353	)
Other (income) expense:
Interest (income)		—			(25	)		—			(25	)
Interest expense		20,132			—			40,043			—
Equity in net loss of unconsolidated affiliate		40,900			—			90,900			—
Loss on settlement of disputed terms of warrant		—			—			768,602			—
Total other (income) expense		61,032			(25	)		899,545			(25	)
Loss from continuing operations		(320,951	)		(494,850	)		(1,656,851	)		(574,328	)
Net loss from discontinued operations		—			—			—			(58,892	)
Net loss	$	(320,951	)	$	(494,850	)	$	(1,656,851	)	$	(633,220	)
Basic and diluted net loss per share:
Continuing operations	$	(0.01	)	$	(0.01	)	$	(0.04	)	$	(0.02	)
Discontinued operations		n/a			n/a			n/a			(0.00	)	*
Net loss per share	$	(0.01	)	$	(0.01	)	$	(0.04	)	$	(0.02	)
Basic and diluted weighted-average common shares outstanding:		44,850,363			43,620,000			44,630,287			32,592,376

———————

*

Denotes loss of less than $0.01 per share.

See accompanying notes to unaudited condensed consolidated financial statements.

2

UNITED CANNABIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2015			2014
Operating activities:
Net loss	$	(1,656,851	)	$	(633,220	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Bad debt expense		16,625			—
Loss on sale of assets of discontinued operations		—			15,704
Share-based compensation expense		461,347			—
Value of non-marketable equity securities recognized as revenue		(90,000	)		—
Equity in net loss of unconsolidated affiliate		90,900			—
Loss on settlement of disputed terms of warrant		768,602			—
Changes in operating assets and liabilities:
Accounts receivable		(18,077	)		—
Due from related party		(1,888	)		10,774
Prepaid expenses		(18,512	)		—
Accounts payable and accrued expenses		160,054			11,872
Net cash provided by (used in) operating activities		(287,800	)		(594,870	)
Investing activities:
Purchase of intangible assets		(14,385	)		—
Net cash provided by (used in) investing activities		(14,385	)		—
Financing activities:
Proceeds from issuance of common shares and warrants		—			900,000
Net cash provided by (used in) financing activities		—			900,000
Net increase (decrease) in cash		(302,185	)		305,130
Cash, beginning of period		321,353			32,414
Cash, end of period	$	19,168		$	337,544

Supplemental schedule of cash flow information:
Cash paid for interest	$	—		$	—
Cash paid for income taxes	$	—		$	—
Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock for repurchase of warrant	$	218,788		$	—
Cancellation of warrant	$	(218,788	)	$	—
Issuance of common stock in settlement of disputed terms of warrant	$	768,602		$	—
Issuance of common stock for services	$	189,935		$	—
Issuance of stock options	$	417,664		$	—
Investment in non-marketable equity securities for deferred services	$	—		$	893,750
Conversion of note payable, related party, into common stock	$	—		$	50,000

See accompanying notes to unaudited condensed consolidated financial statements.

3

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

NOTE 1 –BUSINESS ORGANIZATION AND NATURE OF OPERATIONS

On March 19, 2014, we effected a four-for-one stock split of our outstanding shares of common stock. All references to shares of our common stock in our condensed consolidated financial statements refer to the number of shares of common stock after giving effect to the stock split (unless otherwise indicated).

Background and Current Operations

United Cannabis Corporation ("we", "our", "us", "UCANN", or “our Company”), a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. on November 15, 2007. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold.

In early 2014 we decided to exit the medical spa management business and change our focus to providing products, services and intellectual property to the cannabis industry.

On March 26, 2014, we entered into a License Agreement with Earnest Blackmon, Tony Verzura and Chad Ruby pursuant to which Messrs. Blackmon, Verzura and Ruby licensed certain intellectual property to us in exchange for a total of 38,690,000 shares of our common stock.

In connection with this transaction:

· Messrs. Blackmon, Verzura and Ruby licensed to us all of their knowledge and know-how relating to the design and buildout of cultivation facilities, growing/cultivation systems, seed-to-sale protocols and procedures, products, a genetic catalogue including over 150 different strains, an advanced (non-psychoactive) cannabinoid therapy program called "A.C.T. Now", security, regulatory compliance, and other methods and processes which relate to the cannabis industry.

· The territory for this license is the entire world and the license runs in perpetuity. There are no royalty payments under the License Agreement.

· Messrs. Blackmon, Verzura and Ruby were appointed to our board of directors effective April 7, 2014.

· Mr. Blackmon was elected as our President, Mr. Ruby was elected as Chief Operating Officer and Mr. Verzura was elected as Vice President.

· A total of 41,690,000 previously outstanding shares of common stock were cancelled resulting in a total of 43,620,000 shares of common stock outstanding on March 26, 2014.

UCANN was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin, Inc. merged into UCANN, a wholly-owned subsidiary of MySkin, Inc., for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation.

On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to our advanced skin care business since we have entered into a new business and no longer have any use for these assets. The assets were sold to MySkin Services, Inc. (“MTA”), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for the $15,000 payable which we owed to Ms. Stoppenhagen and/or MTA.  In addition, MTA assumed all costs associated with these assets starting on March 31, 2014.

Government Regulation - Marijuana is a Schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of marijuana has been legalized, its use remains a violation of federal laws.

4

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

As of June 30, 2015, 23 states and the District of Columbia allow their citizens to use medical marijuana, and four states and the District of Columbia have legalized marijuana for recreational use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical and recreational marijuana. However, there is no guarantee that the current administration will not change its stated policy regarding the low-priority enforcement of federal laws, or that any future administration would not change this policy and decide to enforce the federal laws vigorously.  Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to us.  

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - We prepared these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. While we believe that the disclosures presented herein are adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our annual report on Form 10-K for the year ended December 31, 2014. Operating results for the interim periods presented are not necessarily indicative of the results for the full year.

Principles of Consolidation – Our condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries UC Nevada L.L.C. and UC Colorado Corporation. All intercompany accounts and transactions have been eliminated.

Use of Estimates - The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented.

We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our condensed consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term.

Financial Instruments – We have adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, Financial Instruments, which requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.

The carrying amounts of our short-term financial instruments, including accounts receivable, prepaid expenses, accounts payable, accrued expenses and deferred revenue approximates fair value due to the relatively short period to maturity for these instruments. Investments in non-marketable equity securities are carried at cost. The carrying amount of our notes payable at June 30, 2015, approximates their fair values based on our incremental borrowing rates.

Cash and Cash Equivalents - We consider investments with original maturities of 90 days or less to be cash equivalents. We do not have cash equivalents as of June 30, 2015 and December 31, 2014.

Accounts Receivable – Our accounts receivable consists primarily of trade accounts arising in the normal course of business. No interest is charged on past due accounts. Accounts for which no payments have been received after 30 days are considered delinquent and customary collection efforts are initiated. Accounts receivable are carried at original invoice amount less a reserve made for doubtful accounts based on a review of all outstanding amounts on a monthly basis.

5

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

We determine our allowance for doubtful accounts by regularly evaluating individual customer receivables and considering the customer’s financial condition and credit history, and current economic conditions. Our allowance for doubtful accounts was $16,625 and $0 as of June 30, 2015 and December 31, 2014, respectively. We recorded bad debt expense, included in general and administrative expenses, of $16,625 during the three and six months ended June 30, 2015. We did not record bad debt expense during the three and six months ended June 30, 2014.

Inventory - Inventory is valued at the lower of cost or market. Cost is determined using standard costs, which approximates the first-in, first-out method.

Prepaid Expenses - Prepaid expenses are primarily comprised of advance payments made to third parties for independent contractors’ services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods which approximate the life of the contract or service period.

Property and Equipment – Our property and equipment are recorded at cost. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over an estimated useful life of three to five years. Assets acquired under capital leases are depreciated over the lesser of the useful life of the asset or the lease term. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from our accounts and any resulting gain or loss is reflected in our condensed consolidated statements of operations.

Intangible Assets – Our intangible assets, consisting of trademarks, design mark and provisional patent applications are recorded at cost, and once approved, are amortized using the straight-line method over an estimated useful life of 10 to 20 years.

Investments in Non-Marketable Equity Securities – Our investments in non-marketable equity securities are carried at cost, less write-down-for-impairments, if any. Impairments are based on methodologies, including the valuation achieved in the most recent private placement by the investee, an assessment of the impact of industry and general private equity market conditions, and discounted projected future cash flows. Investments in non-marketable equity securities that expire in less than 12 months, for example stock options or warrants, are classified as current assets; otherwise, we classify investments in non-marketable equity securities as other noncurrent assets.

Long-Lived Assets – Our intangible assets and other long-lived assets are subject to an impairment test if there is an indicator of impairment. The carrying value and ultimate realization of these assets is dependent upon our estimates of future earnings and benefits that we expect to generate from their use. If our expectations of future results and cash flows are significantly diminished, intangible assets and other long-lived assets may be impaired and the resulting charge to operations may be material. When we determine that the carrying value of intangibles or other long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, we use the projected undiscounted cash flow method to determine whether an impairment exists, and then measure the impairment using discounted cash flows.

We have not recorded any impairment charges related to long-lived assets as of June 30, 2015 or December 31, 2014.

Equity Method Investments – Our investments in entities representing ownership of at least 20% but not more than 50%, where we exercise significant influence, are accounted for under the equity method.

Deferred Revenue - We defer revenue for which product or service has not yet been delivered or is subject to refund until such time that we and our customer jointly determine that the product or service has been delivered or no refund will be required.

Revenue Recognition - We recognize revenue in accordance with ASC 605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on our management's judgments regarding the fixed nature of the selling prices of the products and services delivered and the collectability of those amounts.

Revenue for services with a payment in form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue paid for with warrants is measured using the Black-Scholes model.

6

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

Revenue from product sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred and collectability is reasonably assured. Generally, our suppliers drop-ship orders to our clients with origin terms. For any shipments with destination terms, we defer revenue until delivery is made to the customer. During 2014 and during the six months ended June 30, 2015, sales returns were not significant and as such, no sales return allowance had been recorded as of June 30, 2015 and December 31, 2014.

Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in total direct client service costs. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are presented in the condensed consolidated statement of operations on a net basis.

Cost of Revenues – Our policy is to recognize cost of revenues in the same manner as, and in conjunction with, revenue recognition. Our cost of revenues includes the costs directly attributable to revenue recognized and includes expenses related to the production, packaging and labeling of our Prana medicinals products and personnel-related costs, fees for third-party services, travel and other consulting costs related to our advisory services.

Shipping and Handling Costs - For product sales, shipping and handling costs are included as a component of cost of revenues. During the three and six months ended June 30, 2015 and 2014, we incurred shipping and handling costs of $1,013 and $0, respectively.

Advertising Costs - All advertising costs are expensed as incurred. During the three months ended June 30, 2015 and 2014, we did not incur any advertising costs. During the six months ended June 30, 2015 and 2014, we incurred advertising costs of $1,500 and $0, respectively.

Research and Development Expenses - Research and development (“R&D”) costs are charged to expense as incurred. Our R&D costs include, but are not limited to, consulting service fees and materials and supplies used in the development of our proprietary products and services.

Sales and Marketing Expenses – Sales and marketing expenses consist primarily of fees for professional and consulting services, promotional events and advertising costs.

General and Administrative Expenses - General and administrative expenses consist primarily of personnel-related costs, fees for professional and consulting services, travel costs, rent, bad debt expense, general corporate costs, and other costs of administration such as human resources, finance and administrative roles.

Share-Based Compensation - We periodically issue shares of our common stock to non-employees in non-capital raising transactions for fees and services. We account for stock issued to non-employees in accordance with ASC 505, Equity, whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete.

We account for stock option grants issued and vesting to employees based on ASC 718, Compensation – Stock Compensation, whereas the award is measured at its fair value at the date of grant and is amortized ratably over the vesting period. Accounting for share-based compensation to employees requires the measurement and recognition of compensation expense for all share-based payment awards made to employees based on estimated fair values. We estimate the fair value of all stock option awards on the date of grant using the Black-Scholes-Merton pricing model, which is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, actual and projected employee option exercise behaviors, risk free interest rates and expected dividends. We also estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from our estimates.

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UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

Income Taxes - Income taxes are recorded using the asset and liability method. Under the asset and liability method, tax assets and liabilities are recognized for the tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that enactment occurs. To the extent that we do not consider it more likely than not that a future tax asset will be recovered, we will provide a valuation allowance against the excess.

We follow the provisions of ASC 740, Income Taxes. As a result of the ASC 740, we make a comprehensive review of our portfolio of tax positions in accordance with recognition standards established by ASC 740. As a result of the implementation of ASC 740, we recognized no material adjustments to liabilities or stockholders’ deficit.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our condensed consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our condensed consolidated statements of operations.

Commitments and Contingencies - Certain conditions may exist as of the date our condensed consolidated financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or fail to occur.  We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our condensed consolidated financial statements.  If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Net  Loss Per Share - We compute net loss per share in accordance with ASC 260, Earnings per Share. Under the provisions of ASC 260, basic net loss per share includes no dilution and is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic net loss per share) and potentially dilutive securities that are not anti-dilutive.

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Warrants to purchase common stock		3,000,000		3,000,000		3,000,000		3,000,000
Stock options		600,000		—		600,000		—
Total potentially dilutive securities		3,600,000		3,000,000		3,600,000		3,000,000

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UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

Other Comprehensive Income (Loss) – We report as other comprehensive income (loss) those revenues, gains and losses not included in the determination of net income.  During the three and six months ended June 30, 2015 and 2014, we did not have any gains and losses resulting from activities or transactions that resulted in comprehensive income or loss.

Segment Reporting – Our Company operates as one segment.

Concentration of Credit Risk - Financial instruments that potentially subject us to credit risk consist of cash. We maintain our cash with high credit quality financial institutions; at times, such balances with any one financial institution may not be insured by the FDIC.

The following tables show significant concentrations in our revenues and accounts receivable (net of allowances for doubtful accounts) for the periods indicated:

Percentage of Revenue:

	Three Months Ended June 30,
	2015			2014
Customer A		64	%		—	%
Customer B		14	%		—	%
Customer C		12	%		—	%

	Six Months Ended June 30,
	2015			2014
Customer A		50	%		—	%
Customer B		22	%		—	%
Customer C		15	%		—	%

Percentage of Accounts Receivable:

	June 30, 2015			December 31, 2014
Customer C		100	%		—	%

Recently Issued Accounting Pronouncements - From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our condensed consolidated financial statements upon adoption.

In May 2014 the FASB issued guidance on revenue from contracts with customers, which implements a five step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for us at the beginning of fiscal year 2018, and early application is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our condensed consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting.

NOTE 3 – GOING CONCERN

Our condensed consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the six months ended June 30, 2015, we incurred losses of $1,656,851 and used cash of $287,800 in our operating activities. As at June 30, 2015, we had a working capital deficit of $1,506,644 and an accumulated deficit of $4,281,818.  Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. There is no assurance that these events will be satisfactorily completed.

9

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

NOTE 4 – INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES

On June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WeedMD RX Inc. (“WMD”), a private Canadian company in the cannabis industry, in exchange for future consulting services and use of our intellectual property. The shares represented a 4.29% equity investment in WMD at the time of the investment and we do not have significant influence over the investee. We recorded our investment in these non-marketable equity securities at estimated cost, based on our estimate of the fair value of the securities on the date of the transaction.

The WMD common shares were recorded at $0.50 per share based on WMD’s most recent sale of their common shares prior to the date of the transaction (CAD $0.50). The $593,750 cost assigned is classified as investment in non-marketable equity securities on our condensed consolidated balance sheets.

On December 9, 2014, the 3,000,000 WMD warrants expired unexercised and we recorded a $300,000 loss on investment in non-marketable equity securities in our condensed consolidated statements of operations.

NOTE 5 – PREPAID EXPENSES

Prepaid expenses consist of:

	June 30, 2015		December 31, 2014
Prepaid corporate finance services	$	83,290	$	—
Prepaid investor relations services		6,667		121,500
Other prepaid services and fees		44,543		55,900
	$	134,500	$	177,400

NOTE 6 – EQUITY METHOD INVESTMENTS

Our equity method investments consist of:

	June 30, 2015		December 31, 2014
Lone Mountain Partners, LLC (“Lone Mountain”) – 25% interest	$	—	$	50,000
Cannabinoid Research & Development Company Limited (“CRD”) – 50% interest		88,000		88,000
Total equity method investments	$	88,000	$	138,000

Lone Mountain

On August 14, 2014, we acquired a 25% membership interest in Lone Mountain Partners, LLC, (“Lone Mountain”) for $50,000 and a commitment to provide future services, including, but not limited to, assisting with the application to obtain licenses to operate a medical marijuana entity in Nevada and to provide  standard operating procedures, security protocols, extract processing and equipment design, cultivation and processing center management, staffing and assistance with ongoing management of Lone Mountain. During the second half of 2014, we advanced Lone Mountain $40,900 for license application fees. As of December 31, 2014, Lone Mountain did not have any operations or operating activities. We accounted for our $50,000 cash contribution as an equity method investment and the $40,900 advance as amounts due from related parties on our condensed consolidated balance sheets.

During the six months ended June 30, 2015, Lone Mountain incurred operating losses in excess of $400,000. We recognized our 25% share of these losses up to the carrying amount of our equity method investment and advances to Lone Mountain and included this total $90,900 loss in equity in net loss of unconsolidated affiliate in our condensed consolidated statements of operations.  

10

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

CRD

On August 15, 2014, we acquired a 50% interest in Cannabinoid Research & Development Company Limited (“CRD”), a Jamaican company, in exchange 40,000 shares of our common stock valued at $88,000 based on the previous day’s closing price of our stock. We also committed to provide expertise on design-build, genetics, cultivation, production, processing, productizing, labeling, packaging, marketing, branding and distribution of products, as well as use of our intellectual property in the operations of CRD. As of June 30, 2015, CRD did not have any operations or operating activities. We accounted for this $88,000 as an equity method investment on our condensed consolidated balance sheets. As we have not yet issued the 40,000 shares, the $88,000 is classified as common stock not yet issued on our condensed consolidated balance sheets.

NOTE 7 – ACCRUED EXPENSES

Our accrued expenses consist of:

	June 30, 2015		December 31, 2014
Accrued consulting fees	$	110,000	$	110,000
Accrued wages and related costs		232,868		433,963
Accrued interest expense		46,875		6,832
Accrued expenses - other		783		—
Total accrued expenses	$	390,526	$	550,795

The $110,000 accrued consulting fees at June 30, 2015 and December 31, 2014, represent fees owed to consultants working on a research and development project that is approximately 80% complete. See Note 12.

NOTE 8 – DEFERRED REVENUE

Our deferred revenue consists of:

	June 30, 2015			December 31, 2014
Deferred revenue – WeedMD	$	653,750		$	743,750
Deferred revenue - FoxBarry		200,000			200,000
Less – current portion		(380,000	)		(500,000	)
Deferred revenue, net of current portion	$	473,750		$	443,750

As described in Note 4 above, on June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WMD in exchange for future consulting services and use of our intellectual property. We recorded the $893,750 fair value of these securities as deferred revenue and we recognized $150,000 of this amount as revenue during the period July 1, 2014 through December 31, 2014, based upon our initial three year estimate of the service period involved. Based on recent discussions with WMD, we now expect to deliver the remaining consulting services and use of our intellectual property to WMD on a relatively consistent monthly basis during the four year period January 1, 2015 through December 31, 2018. Accordingly, we are now recognizing $15,000 of deferred revenue per month and during the three and six month periods ending June 30, 2015, we recognized a total of $45,000 and $90,000, respectively, of revenue applicable to this arrangement. At June 30, 2015, we expect to recognize $180,000 of the remaining $653,750 WMD deferred revenue during the next twelve months and accordingly, we have classified the $180,000 as a current liability on our condensed consolidated balance sheets.

On December 28, 2014, we entered into a royalty and consulting services agreement with FoxBarry Farms, LLC (“FoxBarry”) whereby we received a $200,000 prepaid royalty payment from FoxBarry. We will recognize deferred royalty revenue based on actual applicable sales as defined in the agreement. During the three and six months ended June 30, 2015, we did not recognize any deferred revenue related to this agreement. We have classified the $200,000 as a current liability on our condensed consolidated balance sheets as we expect to recognize this amount during the next twelve months.

.

11

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

NOTE 9 – NOTES PAYABLE 

Our notes payable consist of:

	June 30, 2015		December 31, 2014
Note payable - WeedMD	$	175,000	$	175,000
Note payable – unrelated third party		600,000		600,000
Total notes payable	$	775,000	$	775,000

On July 7, 2014, we issued a $175,000, unsecured demand promissory note bearing interest at 5% to WeedMD for cash used in our business development activities. Interest expense during the three and six months ended June 30, 2015, applicable to this note was $2,181 and $4,339, respectively, and accrued interest payable at June 30, 2015 and December 31, 21014, was $8,606 and 4,267, respectively.

On December 18, 2014, we issued a $600,000 unsecured promissory note bearing interest at 12% to an unrelated third party. The principal and accrued interest are due on the earlier of December 17, 2015, or  upon the closing of certain capital raising transactions as described in the note. The default rate of interest under the note is 18%. Debt issuance costs of $13,500 were immediately recognized as interest expense as, at the time, we expected to close on a capital raising transaction in early 2015.  Interest expense during the three and six months ended June 30, 2015, applicable to this note was $17,951 and $35,704, respectively, and accrued interest payable at June 30, 2015 and December 31, 2014, was $38,269 and $2,565, respectively.

NOTE 10 – STOCKHOLDERS’ DEFICIT

Stock Options

On January 9, 2015, we awarded 200,000 stock options to each of Messrs. Blackmon, Verzura and Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.70 per share during the ten year term of the option.

We calculated the fair value of each option to be approximately $0.70 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation:

Stock price	$	0.70
Exercise price	$	0.70
Risk free interest rate		1.98	%
Expected term (years)		10.0
Expected volatility		173	%
Expected dividends		0	%

At December 31, 2014, the fair value of these 600,000 options totaling $417,664 was included in accrued expenses on our condensed consolidated balance sheets and on January 9, 2015, the option grant date, we increased common stock and decreased accrued expenses by this amount to account for the issuance of these options on that date.

The following table summarizes our stock options outstanding as of June 30, 2015 and December 31, 2014:

	Six Months Ended June 30, 2015
	Number of Shares		Weighted Average Remaining Life (years)		Weighted Average Exercise Price
Stock options outstanding, beginning of period		—		—	$	—
Issued		600,000		10.0		0.70
Exercised		—		—		—
Expired		—		—		—
Stock options outstanding, end of period		600,000		9.5	$	0.70
Stock options exercisable, June 30, 2015		600,000		9.5	$	0.70

12

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

Common Stock Issued For Warrant Outstanding

On February 10, 2015, we issued 621,000 shares of our common stock valued at $987,390 based on the previous day’s closing price, to Typenex Co-Investment, LLC ("Typenex") in exchange for the return of Warrant #1 to Purchase Shares of Common Stock (the “Warrant”) that we issued to Typenex on August 13, 2014, as part of a financing arrangement.

On February 10, 2015, we calculated the fair value of the Warrant to be $218,788, or approximately $1.29 per underlying share, utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation:

Stock price	$	1.59
Exercise price	$	3.00
Risk free interest rate		1.05	%
Expected term (years)		2.6
Expected volatility		183	%
Expected dividends		0	%

The Warrant gave Typenex the right to purchase 170,044 shares of our common stock on the issuance date and provided for adjustments to the number of shares underlying the Warrant upon occurrence of certain events including subsequent sales of our common stock. Our repurchase of the Warrant resulted in Typenex forgoing its potential right to receive shares in excess of the original 170,044 shares underlying the Warrant on the original issuance date. On February 10, 2015, we recorded the $768,602 fair value of the common shares issued in excess of the $218,788 fair value of the Warrant reacquired as a loss on settlement of disputed terms of warrant in our condensed consolidated statements of operations and as an increase in common stock on our condensed consolidated balance sheets. On February 10, 2015, we cancelled the Warrant and recorded the $218,788 fair value as an increase to common stock.

Common Stock Issued For Services

On March 2, 2015, we issued 30,000 shares of common stock valued at $42,600, based on the previous trading day’s closing price, as consideration for consulting services from an independent contractor. The $42,600 of share-based compensation expense is included in included in general and administrative expense in our condensed consolidated statements of operations.

On April 23, 2015 we issued 60,000 shares of common stock valued at $47,400, based on the previous trading day’s closing price, as consideration for prepaid accounting fees. The $47,400 is being recognized as share-based compensation expense as services are rendered. During the three and six months ended June 30, 2015, we recorded $26,998 and $41,356, respectively, of share-based compensation expense and included this in general and administrative expenses in our condensed consolidated statements of operations. The remaining $6,044 as at June 30, 2015, is included in prepaid expenses on our condensed consolidated balance sheets and will be recognized in the third quarter of 2015.

On April 23, 2015, we issued 126,500 shares of common stock valued at $99,935, based on the previous trading day’s closing price, as consideration for prepaid corporate finance fees. The $99,935 is being recognized as share-based compensation expense as services are rendered. During the three and six months ended June 30, 2015, we recorded $33,312, of share-based compensation expense and included this in general and administrative expenses in our condensed consolidated statements of operations. The remaining $66,623 as at June 30, 2015, is included in prepaid expenses on our condensed consolidated balance sheets and will be amortized on a straight-line basis over the four month remaining term of the contract.

13

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

Warrants:

The following table summarizes our share warrants outstanding as of June 30, 2015 and December 31, 2014:

	Six Months Ended June 30, 2015
	Number of Shares			Weighted Average Remaining Life (years)		Weighted Average Exercise Price
Warrants outstanding, beginning of period		3,170,044			1.3	$	11.52
Issued		—			—		—
Exercised		—			—		—
Repurchased and cancelled		(170,044	)		2.5		3.00
Expired		—			—		—
Warrants outstanding, end of period		3,000,000			0.8	$	12.00
Warrants exercisable, June 30, 2015		3,000,000			0.8	$	12.00

NOTE 11 – SHARE-BASED COMPENSATION

Share-based Compensation

We recognize share-based compensation expense in cost of revenues and general and administrative expense based on the fair value of common shares issued for services. In addition, we accrue share-based compensation expense for estimated share-based awards earned during 2015 under our 2014 Equity Incentive Plan. Share-based compensation expense for the three and six months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,
	2015		2014
Share-based compensation expense – amortization of shares issued for prepaid services	$	142,310	$	—
Share-based compensation expense – accrual of estimated share-based awards		105,000		—
	$	247,310	$	—

	Six Months Ended June 30,
	2015		2014
Share-based compensation expense – shares issued for services	$	42,600	$	—
Share-based compensation expense – amortization of shares issued for prepaid services		208,747		—
Share-based compensation expense – accrual of estimated share-based awards		210,000		—
	$	461,347	$	—

NOTE 12 –COMMITMENTS AND CONTINGENCIES

Contractual Obligations and Commercial Commitments

On May 6, 2014, we entered into a consultancy agreement with two third party consultants that has a six month term which can be renewed and/or extended by mutual agreement; currently, the renewal of the agreement is under negotiations. The agreement provides for a $50,000 payment at signing, which has been paid, and for three more $50,000 payments (a total of $200,000) and the issuance of 100,000 shares of our common stock upon the achievement of certain goals as set forth in appendix II of the agreement. During the three and six months ended June 30, 2015, we did not recognize any expense applicable to this agreement. During the three and six months ended June 30, 2014, we recognized $50,000 of expense applicable to this agreement and this amount is included in R&D expenses in our condensed consolidated statements of operations. At December 31, 2014, the project was approximately 80% complete.  We then accrued $110,000 to R&D expense, thereby recognizing a total of $160,000 or 80% of the project costs.  At June 30, 2015 and December 31, 2014, $110,000 is included in accrued expenses on our condensed consolidated balance sheets. The value of the 100,000 shares will be recognized upon achievement of the goals, currently anticipated to be during 2015.  The progress has been suspended and it is unknown when they will resume.

14

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

Legal Proceedings

We are involved in disputes and legal actions arising in the normal course of our business. There have been no material developments in legal proceedings in which we are involved during the three and six months ended June 30, 2015.

NOTE 13 –RELATED PARTY TRANSACTIONS

Affiliate Customer

During 2010 Messrs. Blackmon and Verzura have made loans to, or equity investments in, one of our customers and, effective June 30, 2015, Messrs. Blackmon and Verzura have completely divested themselves of those interests. As Messrs. Blackmon and Verzura may have had significant influence on management or operating polices of the customer until June 30, 2015, we have classified sales to this customer as revenues, affiliate, in our condensed consolidated statements of operations and accounts receivable from this customer as due from related parties on our condensed consolidated balance sheets.

Lone Mountain

During the year ended December 31, 2014, we made certain payments on behalf of Lone Mountain during the organizational phase of this venture and we classified these payments as due from related parties on our condensed consolidated balance sheets. As further described in Note 6 above, during the three and six months ended June 30, 2015, we expensed our $40,900 advance to Lone Mountain and included this amount in equity in net loss of unconsolidated affiliate in our condensed consolidated statements of operations.

CRD

On April 20, 2015, we advanced CRD $5,000 and included this amount in due from related parties.

Amounts due from related parties consist of:

	June 30, 2015		December 31, 2014
Affiliated customer	$	—	$	3,112
Lone Mountain		—		40,900
CRD		5,000		—
Total due from related parties	$	5,000	$	44,012

NOTE 14 –DISCONTINUED OPERATIONS

On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to the advanced skin care business. The assets were sold to MySkin Services, Inc. (“MTA”), a business partly owned by Ms. Stoppenhagen in exchange for a $15,000 payable we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on June 30, 2014. See Note 1 for further detail on our change in operations.

15

UNITED CANNABIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (Unaudited)

The following details our loss from discontinued operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues	$	—	$	—	$	—	$	20,684
Operating expenses:
Selling, general and administrative		—		—		—		63,872
Loss on disposal of assets		—		—		—		15,704
Total operating expenses		—		—		—		79,576
Loss from discontinued operations, before income taxes		—		—		—		(58,892	)
Provision for income taxes		—		—		—		—
Loss from discontinued operations, net of income taxes	$	—	$	—	$	—	$	(58,892	)

NOTE 15 – SUBSEQUENT EVENTS

We are in the process of disposing our 25% equity interest in LMP in exchange for a mutual release from all claims against us, LMP and the other LMP members. We expect that this transaction will be complete effective July 7, 2015. This transaction will not impact our condensed consolidated financial statements as we have previously written off our investment in and advances to LMP.

In accordance with ASC 855-10 we have analyzed our operations subsequent to June 30, 2015, to the date these condensed consolidated financial statements were issued, and has determined that, other that as disclosed above, we do not have any material subsequent events to disclose in these condensed consolidated financial statements.  

16

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion will assist in the understanding of our financial position and results of operations. The information below should be read in conjunction with the condensed financial statements, the related notes to the condensed consolidated financial statements and our Annual Report on Form 10-K for the year ended December 31, 2014.

In addition to historical information, this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 regarding our expectations concerning our future operations, earnings and prospects. On the date the forward-looking statements are made, the statements represent our current expectations, but the expectations concerning our future operations, earnings and prospects may change. Our expectations involve risks and uncertainties (both favorable and unfavorable) and are based on many assumptions that we believe to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that our expectations and the forward-looking statements will be correct. Please refer to the our most recent Annual Report on Form 10-K for a description of risk factors that could cause actual results to differ (favorably or unfavorably) from the expectations stated in this discussion. We disclaim any obligation to update any of these forward-looking statements except as required by law.

Overview

United Cannabis Corporation ("we", "our", "us", "UCANN", or “our Company”) a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. on November 15, 2007. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold.

In early 2014 we decided to exit the medical spa management business and change our focus to providing products, services and intellectual property to the cannabis industry.

UCANN was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin, Inc. merged into UCANN, a wholly-owned subsidiary of MySkin, Inc., for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation.

We own distinct intellectual property relating to the legalized growth, production, manufacture, marketing, management, utilization and distribution of medical and recreational marijuana and marijuana infused products.  In our first year of operating in the cannabis industry we have entered into agreements with partners outside of Colorado where we have agreed to provide intellectual property and consulting services and in which we have received an equity interest.  These businesses are located in Nevada, Jamaica and Canada.  We have formalized strategic relationships with several other businesses located in Colorado and California in the cannabis industry and we provide consulting services, product placement services and licenses to our intellectual property in exchange for consulting and licensing fees. We also market and sell proprietary non-cannabis products used in the manufacture of our proprietary Prana medicinals products.

We plan to advance the use of cannabinoids in medicine through research, product development and education.  We are dedicated to improving the lives of patients through the creation of products using only the highest quality genetics, purest extractions and most effective protocols possible.  Our ACT Now Program and patent-pending Prana Bio Nutrient Medicinals provide a comprehensive solution, designed to enable physicians and patients to design, implement and monitor effective cannabinoid therapy protocols.

Results of Operations

Three Months Ended June 30, 2015 Compared to the Three Months Ended June 30, 2014

Revenues, Cost of Revenues and Gross Profits

Revenues, cost of revenues and gross profit were $313,360, $79,963 and 233,397, respectively, during the three months ended June 30, 2015, as compared to $0 during the three months ended June 30, 2014, as our new business did not begin generating revenues or cost of revenues until the third quarter of 2014.

17

Components of revenues, cost of revenues and gross profit consist of:

	Three  Months Ended June 30, 2015
	Revenues		Cost of Revenues		Gross Profits
Non-cannabis products	$	200,000	$	12,852	$	187,148
License fees		50,664		1,000		49,664
Consulting fees		55,000		58,415		(3,415	)
Reimbursable expenses		7,696		7,696		—
Total	$	313,360	$	79,963	$	233,397

Our non-cannabis product revenues consist of sales of proprietary products used in the manufacture of our Prana medicinals products. Our license fees include the recognition of $45,000 of deferred revenue relating to our WeedMD RX Inc. (“WMD”) business arrangement and our consulting fees were generated from two clients that have entered the cannabis industry.  

Sales and Marketing Expenses

Sales and marketing expenses were $0 and $68,158 for the three months ended June 30, 2015 and 2014, respectively. The decrease in sales and marking expenses was due to our focus on serving existing customers in the second quarter of 2015 as compared to our sales and marketing efforts applicable to new products and services in the second quarter of 2014. Our sales and marketing expenses were mainly comprised of third party consulting fees during the three months ended June 30, 2014.

Research and Development Expenses

Research and development expenses (“R&D”) were $0 and $66,053 for the three months ended June 30, 2015 and 2014, respectively. The decrease in R&D was due to our focus on sales of existing products and services in the second quarter of 2015 as compared to our R&D efforts applicable to new products and services in the second quarter of 2014. Our R&D expenses during the three months ended June 30, 2014, were mainly comprised of R&D consulting fees, materials and supplies.

General and Administrative Expenses

General and administrative expenses (“G&A”) were $493,317 and $360,664 for the three months ended June 30, 2015 and 2014, respectively. The $132,653 increase in general and administrative expenses was mainly due to non-cash share-based compensation expense applicable to professional services as further explained below.

G&A expenses consist of:

	Three Months Ended June 30,
	2015		2014		Change
Personnel related expenses	$	202,398	$	182,821	$	19,577
Professional fees		260,055		106,098		153,957
Travel and office related expanses		30,864		71,745		(40,881	)
Total G&A expenses	$	493,317	$	360,664	$	132,653

The $19,577 increase in personnel related costs were comprised of non-cash share-based compensation expense accruals of $105,000 during the second quarter of 2015 as compared to $0 in the second quarter of 2014 offset by an allocation of $58,415 of personnel related costs to cost of revenues during the second quarter of 2015 as compared to $0 in the second quarter of 2014. The remaining $27,008 decrease in personnel related costs was due to a decrease in head count from five people in the second quarter of 2014 to 3 people in the second quarter of 2015.

The $153,957 increase in professional fees were mainly comprised of $141,310 of non-cash share-based compensation expense applicable to investor relations, corporate finance and accounting professional fees incurred during the second quarter of 2015 as compared to $0 of share-based compensation expense applicable to professional fees in the second quarter of 2014. The remaining $12,646 increase in second quarter 2015 professional fees as compared to the second quarter of 2014 were due to increased capital raising efforts and general corporate activities.

The $40,881 decrease in travel and office related expenses during the second quarter of 2015 as compared to the second quarter of 2014 were a result of cash conservation efforts while we focus on current operations.

18

Other Nonoperating (Income) Expense

Our other nonoperating (income) expense, net, was $61,032 during the three months ended June 30, 2015, as compared to $(25) during the three months ended June 30, 2014. During the second quarter of 2015 we incurred interest expense of $20,132 and equity in net loss of an unconsolidated affiliate of $40,900 as compared to $25 of interest income during the same period in 2014.

Six Months Ended June 30, 2015 Compared to the Six Months Ended June 30, 2014

Revenues, Cost of Revenues and Gross Profits

Revenues, cost of revenues and gross profit were $402,190, 107,018 and $295,172, respectively, during the six months ended June 30, 2015, as compared to $0 during the six months ended June 30, 2014, as our new business did not begin generating revenues or cost of revenues until the third quarter of 2014.

Components of revenues, cost of revenues and gross profit consist of:

	Six  Months Ended June 30, 2015
	Revenues		Cost of Revenues		Gross Profits
Non-cannabis products	$	204,425	$	17,374	$	187,051
License fees		112,180		2,000		110,180
Consulting fees		77,175		79,234		(2,059	)
Reimbursable expenses		8,410		8,410		—
Total	$	402,190	$	107,018	$	295,172

Our non-cannabis product revenues consist of sales of proprietary products used in the manufacture of our Prana medicinals products. Our license fees include the recognition of $90,000 of deferred revenue relating to our WMD business arrangement and our consulting fees were generated from two clients that have entered the cannabis industry.  

Sales and Marketing Expenses

Sales and marketing expenses were $1,700 and $74,158 for the six months ended June 30, 2015 and 2014, respectively. The decrease in sales and marking expenses was due to our focus on serving existing customers in the first half of 2015 as compared to our sales and marketing efforts applicable to new products and services in the first half of 2014. Our sales and marketing expenses were mainly comprised of third party consulting fees during the six months ended June 30, 2014.

Research and Development Expenses

R&D expenses were $329 and $76,054 for the three months ended June 30, 2015 and 2014, respectively. The decrease in R&D was due to our focus on sales of existing products and services in the first half of 2015 as compared to our R&D efforts applicable to new products and services in the first half of 2014. Our R&D expenses during the six months ended June 30, 2014, were mainly comprised of R&D consulting fees, materials and supplies.

General and Administrative Expenses

G&A expenses were $493,317 and $360,664 for the three months ended June 30, 2015 and 2014, respectively. The increase in general and administrative expenses was mainly due to the new business we entered into after our change in control.

G&A expenses consist of:

	Six Months Ended June 30,
	2015		2014		Change
Personnel related expenses	$	481,934	$	209,071	$	272,863
Professional fees		513,325		139,548		373,777
Travel and office related expanses		55,190		75,523		(20,333	)
Total G&A expenses	$	1,050,449	$	424,142	$	626,307

The $272,863 increase in personnel related costs were comprised of non-cash share-based compensation expense accruals of $210,000 during the first half of 2015 as compared to $0 in the first half of 2014 offset by an allocation of $79,234 of personnel related costs to cost of revenues during the first half of 2015 as compared to $0 in the first half of 2014. The remaining $142,097 increase in personnel related costs was due to six months of operations in the first half of 2015 as compared to just over three months of operations in our new business during the first half of 2014.

19

The $373,777 increase in professional fees were mainly comprised of $249,347 of non-cash share-based compensation expense applicable to investor relations, corporate finance, engineering and accounting professional fees incurred during the first half of 2015 as compared to $0 of share-based compensation expense applicable to professional fees in the first half of 2014. The remaining $124,430 increase in first half 2015 professional fees as compared to the first half of 2014 were due to increased capital raising efforts and general corporate activities.

The $20,333 decrease in travel and office related expenses during the first half of 2015 as compared to the first half of 2014 were a result of cash conservation efforts while we focus on current operations.

Other Nonoperating (Income) Expense

Our other nonoperating (income) expense, net, was $899,545 during the six months ended June 30, 2015, as compared to $(25) during the six months ended June 30, 2014. During the first half of 2015 we incurred interest expense of $40,043, equity in net loss of an unconsolidated affiliate of $90,900 and a loss on settlement of disputed terms of warrant of $768,602 as described in Note 10 to our condensed consolidated financial statements included in this report as compared to $25 of interest income during the same period in 2014.

Discontinued Operations

On June 30, 2014 we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to the advanced skin care business. The assets were sold to MySkin Services, Inc. (“MTA”), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for a $15,000 payable we owed to Ms. Stoppenhagen and/or MTA.  In addition, MTA assumed all costs associated with these assets starting on March 31, 2014.  

The following chart details our loss from discontinued operations for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues	$	—	$	—	$	—	$	20,684
Operating expenses:
Selling, general and administrative		—		—		—		63,872
Loss on disposal of assets		—		—		—		15,704
Total operating expenses		—		—		—		79,576
Loss from discontinued operations, before income taxes		—		—		—		(58,892	)
Provision for income taxes		—		—		—		—
Loss from discontinued operations, net of income taxes	$	—	$	—	$	—	$	(58,892	)

Liquidity and Capital Resources

Our condensed consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the six months ended June 30, 2015, we incurred losses of $1,656,851 and used $287,800 of cash in our operating activities. As of June 30, 2015, we had a working capital deficit of $1,288,027 and an accumulated deficit of $4,281,818.  Our ability to continue as a going concern depends on our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities when they come due. There is no assurance that these events will be satisfactorily completed.

Net cash used in operating activities for the six months ending June 30, 2015 and 2014, was $287,800 and $594,870, respectively. This decrease was primarily due to cash received applicable to our $295,172 gross profits during the six months ending June 30, 2015 as compared to $0 gross profits during the same period in 2014.

Net cash used in investing activities for the six months ending June 30, 2015 and 2014, was $14,385 and $0, respectively. This increase was due to $14,385 of payments applicable to our trademarks and provisional patents during the current period compared to no investing activities during the six months ended June 30, 2014.

20

Net cash provided by financing activities for the six months ending June 30, 2015 and 2014, was $0 and $900,000, respectively. The decrease was due to $900,000 from the sale of our common stock and warrants during the six months ended June 30, 2014, compared to no cash financing activities during the current period.

Critical Accounting Policies

The preparation of condensed consolidated financial statements and related disclosures in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the condensed consolidated financial statements and accompanying notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. We believe that our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and assumptions. We have identified in Note 2 - "Summary of Significant Accounting Policies" to the condensed consolidated financial statements contained in this Quarterly Report certain critical accounting policies that affect the more significant judgments and estimates used in the preparation of our condensed financial statements.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

Contractual Obligations

Not applicable for smaller reporting companies.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable for smaller reporting companies.

ITEM 4.

CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures: We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended ("1934 Act"), is recorded, processed, summarized and reported, within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act, is accumulated and communicated to our management, including our Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of June 30, 2015, our Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Principal Executive and Financial Officer concluded that our disclosure controls and procedures were not effective.

(b) Changes in Internal Control over Financial Reporting: There were no changes in our internal control over financial reporting during the second quarter ending June 30, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

21

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

We are not a party to any material legal proceedings.

ITEM 1A.

RISK FACTORS.

Not applicable for smaller reporting companies.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On February 10, 2015, we issued 621,000 shares of our common stock to a third party valued at a total of $987,390 based on the closing price of our common stock on the day before the issuance of the shares was approved by the Board of Directors. The shares were issued in settlement of a dispute over the terms of an outstanding warrant. The issuance of these shares was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

On March 2, 2015, we issued 30,000 shares of our common stock to a consultant for consulting services valued at a total of $42,600 based on the closing price of our common stock on the day before the issuance of the shares was approved by the Board of Directors. The issuances of these shares were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

On April 23, 2015, we issued a total of 186,500 shares of our common stock to two consultants for prepaid consulting services valued at a total of $147,335 based on the closing price of our common stock on the day before the issuance of the shares was approved by the Board of Directors. The issuances of these shares were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES AND USE OF PROCEEDS.

None

ITEM 4.

MINES SAFETY DISCLOSURES.

Not applicable to our Company.

ITEM 5.

OTHER INFORMATION.

None

ITEM 6.

EXHIBITS.

Exhibits
31	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Security Exchange Act Rule 13a-14 and 15d-14.
32	Certification of the Company’s Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	XBRL Exhibits

22

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNITED CANNABIS CORPORATION
Date: August 13, 2015	By:	/s/ Earnest Blackmon
		Earnest Blackmon
		Chief Executive Officer and Principal Financial Officer

23

EX-31

EXHIBIT 31

UNITED CANNABIS CORPORATION

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to

Securities Exchange Act Rules 13a-14 and 15d-14

I, Earnest Blackmon, certify that:

1. I have reviewed this quarterly report on Form 10-Q of United Cannabis Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. As the registrant’s Principal Executive Officer and Principal Financial Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and I have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	I have disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 13, 2015	/s/ Earnest Blackmon
	Name: Earnest Blackmon Title: CEO and Principal Financial Officer

EX-32

EXHIBIT 32

UNITED CANNABIS CORPORATION

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18,

UNITED STATES CODE)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of Title 18, United States Code), the undersigned officer of United Cannabis Corporation (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), to the best of the undersigned’s knowledge that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 13, 2015

/s/ Earnest Blackmon

Name: Earnest Blackmon

Title: CEO and Principal Financial Officer

XML

PREPAID EXPENSES (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
PREPAID EXPENSES [Abstract]
Prepaid corporate finance services	$ 83,290
Prepaid investor relations services	6,667	$ 121,500
Other prepaid services and fees	44,543	55,900
Total prepaid expenses	$ 134,500	$ 177,400

XML

DISCONTINUED OPERATIONS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
DISCONTINUED OPERATIONS [Abstract]
Amount of payable owed to former officer and director, exchanged for assets sold		$ 15,000		$ 15,000
Revenues				20,684
Operating expenses:
Selling, general and administrative				63,872
Loss on disposal of assets				15,704
Total operating expenses				79,576
Loss from discontinued operations, before income taxes				$ (58,892)
Provision for income taxes
Loss from discontinued operations, net of income taxes				$ (58,892)

XML

STOCKHOLDERS' DEFICIT (Summary of Stock Options Outstanding) (Details) - Stock options [Member] - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Number of Shares
Stock options outstanding, beginning of period (in shares)
Issued (in shares)	600,000
Exercised (in shares)
Expired (in shares)
Stock options outstanding, end of period (in shares)	600,000
Stock options exercisable (in shares)	600,000
Weighted Average Remaining Life
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2	9 years 6 months
Issued	10 years
Exercised
Expired
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2	9 years 6 months
Stock options exercisable	9 years 6 months
Weighted Average Exercise Price
Stock options outstanding, beginning of period (in dollars per share)
Issued (in dollars per share)	$ 0.70
Exercised (in dollars per share)
Expired (in dollars per share)
Stock options outstanding, end of period (in dollars per share)	$ 0.70
Stock options exercisable (in dollars per share)	$ 0.70

XML

SUBSEQUENT EVENTS (Details)	Jun. 30, 2015	Aug. 14, 2014
Lone Mountain [Member]
Subsequent Event [Line Items]
Equity investment	25.00%	25.00%

XML

STOCKHOLDERS' DEFICIT (Stock Options) (Details) - USD ($)		6 Months Ended		12 Months Ended
	Jan. 09, 2015	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Stock Options [Line Items]
Issuance of stock options		$ 417,664
Stock options [Member]
Stock Options [Line Items]
Number of shares awarded		600,000
Stock options [Member] | Stock Incentive Plan2014 [Member]
Stock Options [Line Items]
Fair value of option (in dollars per share)	$ 0.70
Vesting period	10 years
Issuance of stock options				$ 417,664
Options granted				600,000
Blackmon [Member] | Stock options [Member] | Stock Incentive Plan2014 [Member]
Stock Options [Line Items]
Number of shares awarded	200,000
Verzura [Member] | Stock options [Member] | Stock Incentive Plan2014 [Member]
Stock Options [Line Items]
Number of shares awarded	200,000
Ruby [Member] | Stock options [Member] | Stock Incentive Plan2014 [Member]
Stock Options [Line Items]
Number of shares awarded	200,000

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details)	6 Months Ended
	Jun. 30, 2015 USD ($) Item	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Cash equivalents
Allowance for doubtful accounts	$ 16,625
Bad debt expense	16,625
Shipping and handling costs	1,013
Advertising Costs	$ 1,500
Number of operating segment | Item	1
Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years

XML

ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2015

ACCRUED EXPENSES [Abstract]

Schedule of accrued expenses

	June 30, 2015		December 31, 2014
Accrued consulting fees	$	110,000	$	110,000
Accrued wages and related costs		232,868		433,963
Accrued interest expense		46,875		6,832
Accrued expenses - other		783		—
Total accrued expenses	$	390,526	$	550,795

XML

STOCKHOLDERS' DEFICIT (Schedule of Assumptions on Date of Valuation Utilizing Black Scholes Option Pricing Model for Fair Value of Each Warrants) (Details) - Feb. 10, 2015 - Warrant [Member] - $ / shares	Total
Warrants [Line Items]
Warrants price (on dollars per shares)	$ 1.29
Stock price (in dollars per share)	1.59
Exercise price (in dollars per share)	$ 3.00
Risk free interest rate (as a percent)	1.05%
Expected term (years)	2 years 7 months 6 days
Expected volatility (as a percent)	183.00%
Expected dividends (as a percent)	0.00%

XML

ACCRUED EXPENSES (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
ACCRUED EXPENSES [Abstract]
Accrued consulting fees	$ 110,000	$ 110,000
Accrued wages and related costs	232,868	433,963
Accrued interest expense	46,875	$ 6,832
Accrued expenses - other	783
Total accrued expenses	$ 390,526	$ 550,795

XML

GOING CONCERN (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
GOING CONCERN [Abstract]
Net loss (income)	$ 320,951	$ 494,850	$ 1,656,851	$ 633,220
Net cash used in operating activities			287,800	$ 594,870
Working capital deficit	1,506,644		1,506,644
Accumulated deficit	$ 4,281,818		$ 4,281,818		$ 2,624,967

XML

COMMITMENTS AND CONTINGENCIES (Details) - USD ($)		3 Months Ended		6 Months Ended
	May. 06, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Long-term Purchase Commitment [Line Items]
Research and development			$ 66,053	$ 329	$ 76,053
Research and Development Arrangement [Member]
Long-term Purchase Commitment [Line Items]
Consultancy agreement, term	6 months
Consultancy agreement, initial payment	$ 50,000
Consultancy agreement, additional payments	$ 50,000
Shares issued for consultancy agreement	100,000
Research and development			$ 50,000		$ 50,000
Accrued expenses		$ 110,000		110,000		$ 100,000
Total commitment				$ 200,000
Percentage of completion		80.00%		80.00%
Costs recognized		$ 160,000		$ 160,000

XML

STOCKHOLDERS' DEFICIT (Schedule of Assumptions used for Valuation Utilizing the Black Scholes Option Pricing Model for Fair Value of Each Option) (Details) - Jun. 30, 2015 - Stock options [Member] - $ / shares	Total
Fair value Assumptions [Line Items]
Stock price (in dollars per share)	$ 0.70
Exercise price (in dollars per share)	$ 0.70
Risk free interest rate (as a percent)	1.98%
Expected term (years)	10 years
Expected volatility (as a percent)	173.00%
Expected dividends (as a percent)	0.00%

XML

INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES

6 Months Ended

Jun. 30, 2015

INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES [Abstract]

INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES

NOTE 4 – INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES

On June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WeedMD RX Inc. (“WMD”), a private Canadian company in the cannabis industry, in exchange for future consulting services and use of our intellectual property. The shares represented a 4.29% equity investment in WMD at the time of the investment and we do not have significant influence over the investee. We recorded our investment in these non-marketable equity securities at estimated cost, based on our estimate of the fair value of the securities on the date of the transaction.

The WMD common shares were recorded at $0.50 per share based on WMD's most recent sale of their common shares prior to the date of the transaction (CAD $0.50). The $593,750 cost assigned is classified as investment in non-marketable equity securities on our condensed consolidated balance sheets.

On December 9, 2014, the 3,000,000 WMD warrants expired unexercised and we recorded a $300,000 loss on investment in non-marketable equity securities in our condensed consolidated statements of operations.

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DEFERRED REVENUE (Details) - USD ($)		3 Months Ended	6 Months Ended
	Jun. 09, 2014	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Deferred Revenue Arrangement [Line Items]
Less - current portion		$ (380,000)	$ (380,000)	$ (500,000)
Deferred revenue, net of current portion		473,750	473,750	443,750
WeedMD [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue		653,750	653,750	743,750
Less - current portion		(180,000)	(180,000)
Common shares received in exchange for future consulting services and use of our intellectual property	1,187,500
Warrants received in exchange for future consulting services and use of our intellectual property	3,000,000
Fair value of securities recorded as deferred revenue	$ 893,750
Deferred revenue recognized per month			15,000
Total deferred revenue recognized		45,000	90,000	$ 150,000
Initial revenue recognized period				3 years
FoxBarry [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue		200,000	200,000	$ 200,000
Less - current portion		$ (200,000)	$ (200,000)

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2015

SHARE-BASED COMPENSATION [Abstract]

Schedule of share-based compensation expense

	Three Months Ended June 30,
	2015		2014
Share-based compensation expense – amortization of shares issued for prepaid services	$	142,310	$	—
Share-based compensation expense – accrual of estimated share-based awards		105,000		—
	$	247,310	$	—

	Six Months Ended June 30,
	2015		2014
Share-based compensation expense – shares issued for services	$	42,600	$	—
Share-based compensation expense – amortization of shares issued for prepaid services		208,747		—
Share-based compensation expense – accrual of estimated share-based awards		210,000		—
	$	461,347	$	—

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STOCKHOLDERS' DEFICIT (Tables)

6 Months Ended

Jun. 30, 2015

STOCKHOLDERS' DEFICIT [Abstract]

Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value of each option

Stock price	$	0.70
Exercise price	$	0.70
Risk free interest rate		1.98	%
Expected term (years)		10.0
Expected volatility		173	%
Expected dividends		0	%

Summary of stock options outstanding

	Six Months Ended June 30, 2015
	Number of Shares		Weighted Average Remaining Life (years)		Weighted Average Exercise Price
Stock options outstanding, beginning of period		—		—	$	—
Issued		600,000		10.0		0.70
Exercised		—		—		—
Expired		—		—		—
Stock options outstanding, end of period		600,000		9.5	$	0.70
Stock options exercisable, June 30, 2015		600,000		9.5	$	0.70

Schedule of assumptions on the date of valuation utilizing the Black Scholes option pricing model for fair value of each warrants

Stock price	$	1.59
Exercise price	$	3.00
Risk free interest rate		1.05	%
Expected term (years)		2.6
Expected volatility		183	%
Expected dividends		0	%

Summary of share warrants outstanding

	Six Months Ended June 30, 2015
	Number of Shares			Weighted Average Remaining Life (years)		Weighted Average Exercise Price
Warrants outstanding, beginning of period		3,170,044			1.3	$	11.52
Issued		—			—		—
Exercised		—			—		—
Repurchased and cancelled		(170,044	)		2.5		3.00
Expired		—			—		—
Warrants outstanding, end of period		3,000,000			0.8	$	12.00
Warrants exercisable, June 30, 2015		3,000,000			0.8	$	12.00

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NOTES PAYABLE (Schedule of Notes Payable) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Short-term Debt [Line Items]
Notes payable	$ 775,000	$ 775,000
Note payable [Member] | WeedMD [Member]
Short-term Debt [Line Items]
Notes payable	175,000	175,000
Note payable [Member] | Unrelated third party [Member]
Short-term Debt [Line Items]
Notes payable	$ 600,000	$ 600,000

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RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Jun. 30, 2015

RELATED PARTY TRANSACTIONS [Abstract]

Schedule of amounts due from related parties

	June 30, 2015		December 31, 2014
Affiliated customer	$	—	$	3,112
Lone Mountain		—		40,900
CRD		5,000		—
Total due from related parties	$	5,000	$	44,012

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DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2015

DISCONTINUED OPERATIONS [Abstract]

Schedule of Loss from Discontinued Operations

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues	$	—	$	—	$	—	$	20,684
Operating expenses:
Selling, general and administrative		—		—		—		63,872
Loss on disposal of assets		—		—		—		15,704
Total operating expenses		—		—		—		79,576
Loss from discontinued operations, before income taxes		—		—		—		(58,892	)
Provision for income taxes		—		—		—		—
Loss from discontinued operations, net of income taxes	$	—	$	—	$	—	$	(58,892	)

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GOING CONCERN

6 Months Ended

Jun. 30, 2015

GOING CONCERN [Abstract]

GOING CONCERN

NOTE 3 – GOING CONCERN

Our condensed consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the six months ended June 30, 2015, we incurred losses of $1,656,851 and used cash of $287,800 in our operating activities. As at June 30, 2015, we had a working capital deficit of $1,506,644 and an accumulated deficit of $4,281,818.  Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. There is no assurance that these events will be satisfactorily completed.

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BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details)		1 Months Ended
	Mar. 19, 2014	Mar. 31, 2014 shares	Jun. 30, 2015 shares	Dec. 31, 2014 shares	Jun. 30, 2014 USD ($)	Mar. 26, 2014 shares
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS [Abstract]
Stock split ratio	0.25
Amount of payable owed to former officer and director, exchanged for assets sold | $					$ 15,000
Number of common shares issued in exchange for certain intellectual property		38,690,000
Total number of common shares previously outstanding, cancelled during period						41,690,000
Common stock, shares outstanding			44,857,500	44,020,000		43,620,000

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EQUITY METHOD INVESTMENTS (Schedule of equity method investments) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014	Aug. 15, 2014	Aug. 14, 2014
Schedule of Equity Method Investments [Line Items]
Equity method investments	$ 88,000	$ 138,000
Lone Mountain [Member]
Schedule of Equity Method Investments [Line Items]
Interest owned (as a percentage)	25.00%			25.00%
Equity method investments		50,000		$ 50,000
CRD [Member]
Schedule of Equity Method Investments [Line Items]
Interest owned (as a percentage)	50.00%		50.00%
Equity method investments	$ 88,000	$ 88,000	$ 88,000

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RELATED PARTY TRANSACTIONS (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Related party transaction [Line Items]
Total due from related parties	$ 5,000	$ 44,012
Affiliated customer [Member]
Related party transaction [Line Items]
Total due from related parties		3,112
Lone Mountain [Member]
Related party transaction [Line Items]
Total due from related parties		$ 40,900
CRD [Member]
Related party transaction [Line Items]
Total due from related parties	$ 5,000

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 19,168	$ 321,353
Accounts receivable, net	7,697	6,245
Due from related parties	5,000	44,012
Prepaid expenses	134,500	177,400
Total current assets	166,365	549,010
Intangible assets	19,994	18,210
Investments in non-marketable equity securities	593,750	593,750
Equity method investments	88,000	138,000
Total assets	868,109	1,298,970
Current liabilities:
Accounts payable	127,483	27,424
Accrued expenses	390,526	550,795
Current portion of deferred revenue	380,000	500,000
Notes payable	775,000	775,000
Total current liabilities	1,673,009	1,853,219
Long term liabilities:
Deferred revenue, net of current portion	473,750	443,750
Total liabilities	$ 2,146,759	$ 2,296,969
Stockholders' deficit:
Preferred stock, no par value; 10,000,000 shares authorized; none issued and outstanding
Common stock, no par value; 100,000,000 shares authorized; 44,857,500 (unaudited) and 44,020,000 shares issued and outstanding, respectively	$ 2,915,168	$ 1,538,968
Common stock outstanding, not yet issued; 40,000 shares	88,000	88,000
Accumulated deficit	(4,281,818)	(2,624,967)
Total stockholders' deficit	(1,278,650)	(997,999)
Total liabilities and stockholders' deficit	$ 868,109	$ 1,298,970

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NOTES PAYABLE (Narrative) (Details) - USD ($)		3 Months Ended	6 Months Ended
	Dec. 18, 2014	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	Jul. 07, 2014
Short-term Debt [Line Items]
Accrued interest payable		$ 46,875	$ 46,875	$ 6,832
Note payable [Member] | WeedMD [Member]
Short-term Debt [Line Items]
Debt instrument, face amount					$ 175,000
Debt instrument, interest rate					5.00%
Interest expense		2,181	4,339
Accrued interest payable		8,606	8,606	4,267
Note payable [Member] | Unrelated third party [Member]
Short-term Debt [Line Items]
Debt instrument, face amount	$ 600,000
Debt instrument, interest rate	12.00%
Default rate of interest under the note	18.00%
Debt issuance costs	$ 13,500
Interest expense		17,951	35,704
Accrued interest payable		$ 38,269	$ 38,269	$ 2,565

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BUSINESS ORGANIZATION AND NATURE OF OPERATIONS

6 Months Ended

Jun. 30, 2015

BUSINESS ORGANIZATION AND NATURE OF OPERATIONS [Abstract]

BUSINESS ORGANIZATION AND NATURE OF OPERATIONS

NOTE 1 –BUSINESS ORGANIZATION AND NATURE OF OPERATIONS

On March 19, 2014, we effected a four-for-one stock split of our outstanding shares of common stock. All references to shares of our common stock in our condensed consolidated financial statements refer to the number of shares of common stock after giving effect to the stock split (unless otherwise indicated).

Background and Current Operations

United Cannabis Corporation ("we", "our", "us", "UCANN", or “our Company”), a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. on November 15, 2007. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold.

In early 2014 we decided to exit the medical spa management business and change our focus to providing products, services and intellectual property to the cannabis industry.

On March 26, 2014, we entered into a License Agreement with Earnest Blackmon, Tony Verzura and Chad Ruby pursuant to which Messrs. Blackmon, Verzura and Ruby licensed certain intellectual property to us in exchange for a total of 38,690,000 shares of our common stock.

In connection with this transaction:

• Messrs. Blackmon, Verzura and Ruby licensed to us all of their knowledge and know-how relating to the design and buildout of cultivation facilities, growing/cultivation systems, seed-to-sale protocols and procedures, products, a genetic catalogue including over 150 different strains, an advanced (non-psychoactive) cannabinoid therapy program called "A.C.T. Now", security, regulatory compliance, and other methods and processes which relate to the cannabis industry.

• The territory for this license is the entire world and the license runs in perpetuity. There are no royalty payments under the License Agreement.

• Messrs. Blackmon, Verzura and Ruby were appointed to our board of directors effective April 7, 2014.

• Mr. Blackmon was elected as our President, Mr. Ruby was elected as Chief Operating Officer and Mr. Verzura was elected as Vice President.

• A total of 41,690,000 previously outstanding shares of common stock were cancelled resulting in a total of 43,620,000 shares of common stock outstanding on March 26, 2014.

UCANN was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin, Inc. merged into UCANN, a wholly-owned subsidiary of MySkin, Inc., for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation.

On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to our advanced skin care business since we have entered into a new business and no longer have any use for these assets. The assets were sold to MySkin Services, Inc. (“MTA”), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for the $15,000 payable which we owed to Ms. Stoppenhagen and/or MTA.  In addition, MTA assumed all costs associated with these assets starting on March 31, 2014.

Government Regulation - Marijuana is a Schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of marijuana has been legalized, its use remains a violation of federal laws.

As of June 30, 2015, 23 states and the District of Columbia allow their citizens to use medical marijuana, and four states and the District of Columbia have legalized marijuana for recreational use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical and recreational marijuana. However, there is no guarantee that the current administration will not change its stated policy regarding the low-priority enforcement of federal laws, or that any future administration would not change this policy and decide to enforce the federal laws vigorously.  Any such change in the federal government's enforcement of current federal laws could cause significant financial damage to us.  

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of anti-dilutive securities) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	3,600,000	3,000,000	3,600,000	3,000,000
Warrants to purchase common stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	3,000,000	3,000,000	3,000,000	3,000,000
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	600,000		600,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2015

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Schedule of potentially dilutive securities that have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Warrants to purchase common stock		3,000,000		3,000,000		3,000,000		3,000,000
Stock options		600,000		—		600,000		—
Total potentially dilutive securities		3,600,000		3,000,000		3,600,000		3,000,000

Schedule of significant concentrations in revenues and accounts receivable

Percentage of Revenue:

	Three Months Ended June 30,
	2015			2014
Customer A		64	%		—	%
Customer B		14	%		—	%
Customer C		12	%		—	%

	Six Months Ended June 30,
	2015			2014
Customer A		50	%		—	%
Customer B		22	%		—	%
Customer C		15	%		—	%

Percentage of Accounts Receivable:

	June 30, 2015			December 31, 2014
Customer C		100	%		—	%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of concentration of credit risk) (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Revenue [Member] | Customer A [Member]
Concentration Risk [Line Items]
Concentration risk percentage	64.00%		50.00%
Revenue [Member] | Customer B [Member]
Concentration Risk [Line Items]
Concentration risk percentage	14.00%		22.00%
Revenue [Member] | Customer C [Member]
Concentration Risk [Line Items]
Concentration risk percentage	12.00%		15.00%
Accounts Receivable [Member] | Customer C [Member]
Concentration Risk [Line Items]
Concentration risk percentage			100.00%

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EQUITY METHOD INVESTMENTS (Tables)

6 Months Ended

Jun. 30, 2015

EQUITY METHOD INVESTMENTS [Abstract]

Schedule of equity method investments

	June 30, 2015		December 31, 2014
Lone Mountain Partners, LLC (“Lone Mountain”) – 25% interest	$	—	$	50,000
Cannabinoid Research & Development Company Limited (“CRD”) – 50% interest		88,000		88,000
Total equity method investments	$	88,000	$	138,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2015

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - We prepared these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. While we believe that the disclosures presented herein are adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our annual report on Form 10-K for the year ended December 31, 2014. Operating results for the interim periods presented are not necessarily indicative of the results for the full year.

Principles of Consolidation – Our condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries UC Nevada L.L.C. and UC Colorado Corporation. All intercompany accounts and transactions have been eliminated.

Use of Estimates - The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented.

We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our condensed consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term.

Financial Instruments – We have adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, Financial Instruments, which requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.

The carrying amounts of our short-term financial instruments, including accounts receivable, prepaid expenses, accounts payable, accrued expenses and deferred revenue approximates fair value due to the relatively short period to maturity for these instruments. Investments in non-marketable equity securities are carried at cost. The carrying amount of our notes payable at June 30, 2015, approximates their fair values based on our incremental borrowing rates.

Cash and Cash Equivalents - We consider investments with original maturities of 90 days or less to be cash equivalents. We do not have cash equivalents as of June 30, 2015 and December 31, 2014.

Accounts Receivable – Our accounts receivable consists primarily of trade accounts arising in the normal course of business. No interest is charged on past due accounts. Accounts for which no payments have been received after 30 days are considered delinquent and customary collection efforts are initiated. Accounts receivable are carried at original invoice amount less a reserve made for doubtful accounts based on a review of all outstanding amounts on a monthly basis.

We determine our allowance for doubtful accounts by regularly evaluating individual customer receivables and considering the customer's financial condition and credit history, and current economic conditions. Our allowance for doubtful accounts was $16,625 and $0 as of June 30, 2015 and December 31, 2014, respectively. We recorded bad debt expense, included in general and administrative expenses, of $16,625 during the three and six months ended June 30, 2015. We did not record bad debt expense during the three and six months ended June 30, 2014.

Inventory - Inventory is valued at the lower of cost or market. Cost is determined using standard costs, which approximates the first-in, first-out method.

Prepaid Expenses - Prepaid expenses are primarily comprised of advance payments made to third parties for independent contractors' services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods which approximate the life of the contract or service period.

Property and Equipment – Our property and equipment are recorded at cost. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over an estimated useful life of three to five years. Assets acquired under capital leases are depreciated over the lesser of the useful life of the asset or the lease term. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from our accounts and any resulting gain or loss is reflected in our condensed consolidated statements of operations.

Intangible Assets – Our intangible assets, consisting of trademarks, design mark and provisional patent applications are recorded at cost, and once approved, are amortized using the straight-line method over an estimated useful life of 10 to 20 years.

Investments in Non-Marketable Equity Securities – Our investments in non-marketable equity securities are carried at cost, less write-down-for-impairments, if any. Impairments are based on methodologies, including the valuation achieved in the most recent private placement by the investee, an assessment of the impact of industry and general private equity market conditions, and discounted projected future cash flows. Investments in non-marketable equity securities that expire in less than 12 months, for example stock options or warrants, are classified as current assets; otherwise, we classify investments in non-marketable equity securities as other noncurrent assets.

Long-Lived Assets – Our intangible assets and other long-lived assets are subject to an impairment test if there is an indicator of impairment. The carrying value and ultimate realization of these assets is dependent upon our estimates of future earnings and benefits that we expect to generate from their use. If our expectations of future results and cash flows are significantly diminished, intangible assets and other long-lived assets may be impaired and the resulting charge to operations may be material. When we determine that the carrying value of intangibles or other long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, we use the projected undiscounted cash flow method to determine whether an impairment exists, and then measure the impairment using discounted cash flows.

We have not recorded any impairment charges related to long-lived assets as of June 30, 2015 or December 31, 2014.

Equity Method Investments – Our investments in entities representing ownership of at least 20% but not more than 50%, where we exercise significant influence, are accounted for under the equity method.

Deferred Revenue - We defer revenue for which product or service has not yet been delivered or is subject to refund until such time that we and our customer jointly determine that the product or service has been delivered or no refund will be required.

Revenue Recognition - We recognize revenue in accordance with ASC 605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on our management's judgments regarding the fixed nature of the selling prices of the products and services delivered and the collectability of those amounts.

Revenue for services with a payment in form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue paid for with warrants is measured using the Black-Scholes model.

Revenue from product sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred and collectability is reasonably assured. Generally, our suppliers drop-ship orders to our clients with origin terms. For any shipments with destination terms, we defer revenue until delivery is made to the customer. During 2014 and during the six months ended June 30, 2015, sales returns were not significant and as such, no sales return allowance had been recorded as of June 30, 2015 and December 31, 2014.

Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in total direct client service costs. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are presented in the condensed consolidated statement of operations on a net basis.

Cost of Revenues – Our policy is to recognize cost of revenues in the same manner as, and in conjunction with, revenue recognition. Our cost of revenues includes the costs directly attributable to revenue recognized and includes expenses related to the production, packaging and labeling of our Prana medicinals products and personnel-related costs, fees for third-party services, travel and other consulting costs related to our advisory services.

Shipping and Handling Costs - For product sales, shipping and handling costs are included as a component of cost of revenues. During the three and six months ended June 30, 2015 and 2014, we incurred shipping and handling costs of $1,013 and $0, respectively.

Advertising Costs - All advertising costs are expensed as incurred. During the three months ended June 30, 2015 and 2014, we did not incur any advertising costs. During the six months ended June 30, 2015 and 2014, we incurred advertising costs of $1,500 and $0, respectively.

Research and Development Expenses - Research and development (“R&D”) costs are charged to expense as incurred. Our R&D costs include, but are not limited to, consulting service fees and materials and supplies used in the development of our proprietary products and services.

Sales and Marketing Expenses – Sales and marketing expenses consist primarily of fees for professional and consulting services, promotional events and advertising costs.

General and Administrative Expenses - General and administrative expenses consist primarily of personnel-related costs, fees for professional and consulting services, travel costs, rent, bad debt expense, general corporate costs, and other costs of administration such as human resources, finance and administrative roles.

Share-Based Compensation - We periodically issue shares of our common stock to non-employees in non-capital raising transactions for fees and services. We account for stock issued to non-employees in accordance with ASC 505, Equity, whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete.

We account for stock option grants issued and vesting to employees based on ASC 718, Compensation – Stock Compensation, whereas the award is measured at its fair value at the date of grant and is amortized ratably over the vesting period. Accounting for share-based compensation to employees requires the measurement and recognition of compensation expense for all share-based payment awards made to employees based on estimated fair values. We estimate the fair value of all stock option awards on the date of grant using the Black-Scholes-Merton pricing model, which is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, actual and projected employee option exercise behaviors, risk free interest rates and expected dividends. We also estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from our estimates.

Income Taxes - Income taxes are recorded using the asset and liability method. Under the asset and liability method, tax assets and liabilities are recognized for the tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that enactment occurs. To the extent that we do not consider it more likely than not that a future tax asset will be recovered, we will provide a valuation allowance against the excess.

We follow the provisions of ASC 740, Income Taxes. As a result of the ASC 740, we make a comprehensive review of our portfolio of tax positions in accordance with recognition standards established by ASC 740. As a result of the implementation of ASC 740, we recognized no material adjustments to liabilities or stockholders' deficit.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our condensed consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our condensed consolidated statements of operations.

Commitments and Contingencies - Certain conditions may exist as of the date our condensed consolidated financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or fail to occur.  We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our condensed consolidated financial statements.  If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Net  Loss Per Share - We compute net loss per share in accordance with ASC 260, Earnings per Share. Under the provisions of ASC 260, basic net loss per share includes no dilution and is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic net loss per share) and potentially dilutive securities that are not anti-dilutive.

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Warrants to purchase common stock		3,000,000		3,000,000		3,000,000		3,000,000
Stock options		600,000		—		600,000		—
Total potentially dilutive securities		3,600,000		3,000,000		3,600,000		3,000,000

Other Comprehensive Income (Loss) – We report as other comprehensive income (loss) those revenues, gains and losses not included in the determination of net income.  During the three and six months ended June 30, 2015 and 2014, we did not have any gains and losses resulting from activities or transactions that resulted in comprehensive income or loss.

Segment Reporting – Our Company operates as one segment.

Concentration of Credit Risk - Financial instruments that potentially subject us to credit risk consist of cash. We maintain our cash with high credit quality financial institutions; at times, such balances with any one financial institution may not be insured by the FDIC.

The following tables show significant concentrations in our revenues and accounts receivable (net of allowances for doubtful accounts) for the periods indicated:

Percentage of Revenue:

	Three Months Ended June 30,
	2015			2014
Customer A		64	%		—	%
Customer B		14	%		—	%
Customer C		12	%		—	%

	Six Months Ended June 30,
	2015			2014
Customer A		50	%		—	%
Customer B		22	%		—	%
Customer C		15	%		—	%

Percentage of Accounts Receivable:

	June 30, 2015			December 31, 2014
Customer C		100	%		—	%

Recently Issued Accounting Pronouncements - From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our condensed consolidated financial statements upon adoption.

In May 2014 the FASB issued guidance on revenue from contracts with customers, which implements a five step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for us at the beginning of fiscal year 2018, and early application is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our condensed consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares None in scaling factor is -9223372036854775296	Jun. 30, 2015	Dec. 31, 2014
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract]
Preferred stock, no par value
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, no par value
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	44,857,500	44,020,000
Common stock, shares outstanding	44,857,500	44,020,000
Common stock, not yet issued shares	40,000	40,000

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2015

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 12 –COMMITMENTS AND CONTINGENCIES

Contractual Obligations and Commercial Commitments

On May 6, 2014, we entered into a consultancy agreement with two third party consultants that has a six month term which can be renewed and/or extended by mutual agreement; currently, the renewal of the agreement is under negotiations. The agreement provides for a $50,000 payment at signing, which has been paid, and for three more $50,000 payments (a total of $200,000) and the issuance of 100,000 shares of our common stock upon the achievement of certain goals as set forth in appendix II of the agreement. During the three and six months ended June 30, 2015, we did not recognize any expense applicable to this agreement. During the three and six months ended June 30, 2014, we recognized $50,000 of expense applicable to this agreement and this amount is included in R&D expenses in our condensed consolidated statements of operations. At December 31, 2014, the project was approximately 80% complete.  We then accrued $110,000 to R&D expense, thereby recognizing a total of $160,000 or 80% of the project costs.  At June 30, 2015 and December 31, 2014, $110,000 is included in accrued expenses on our condensed consolidated balance sheets. The value of the 100,000 shares will be recognized upon achievement of the goals, currently anticipated to be during 2015.  The progress has been suspended and it is unknown when they will resume.

Legal Proceedings

We are involved in disputes and legal actions arising in the normal course of our business. There have been no material developments in legal proceedings in which we are involved during the three and six months ended June 30, 2015.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 13, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	United Cannabis Corp
Entity Central Index Key	0001436161
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		44,897,500
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2015

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2015

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 13 –RELATED PARTY TRANSACTIONS

Affiliate Customer

During 2010 Messrs. Blackmon and Verzura have made loans to, or equity investments in, one of our customers and, effective June 30, 2015, Messrs. Blackmon and Verzura have completely divested themselves of those interests. As Messrs. Blackmon and Verzura may have had significant influence on management or operating polices of the customer until June 30, 2015, we have classified sales to this customer as revenues, affiliate, in our condensed consolidated statements of operations and accounts receivable from this customer as due from related parties on our condensed consolidated balance sheets.

Lone Mountain

During the year ended December 31, 2014, we made certain payments on behalf of Lone Mountain during the organizational phase of this venture and we classified these payments as due from related parties on our condensed consolidated balance sheets. As further described in Note 6 above, during the three and six months ended June 30, 2015, we expensed our $40,900 advance to Lone Mountain and included this amount in equity in net loss of unconsolidated affiliate in our condensed consolidated statements of operations.

CRD

On April 20, 2015, we advanced CRD $5,000 and included this amount in due from related parties.

Amounts due from related parties consist of:

	June 30, 2015		December 31, 2014
Affiliated customer	$	—	$	3,112
Lone Mountain		—		40,900
CRD		5,000		—
Total due from related parties	$	5,000	$	44,012

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:
Revenues, non-affiliates	$ 313,360		$ 397,765
Revenues, affiliate			4,425
Total revenues	$ 313,360		402,190
Cost of revenues	(79,963)		(107,018)
Gross profit	$ 233,397		295,172
Operating expenses:
Sales and marketing		$ 68,158	1,700	$ 74,158
Research and development		66,053	329	76,053
General and administrative	$ 493,316	360,664	1,050,449	424,142
Total operating expenses	493,316	494,875	1,052,478	574,353
Loss from operations	$ (259,919)	(494,875)	$ (757,306)	(574,353)
Other (income) expense:
Interest (income)		$ (25)		$ (25)
Interest expense	$ 20,132		$ 40,043
Equity in net loss of unconsolidated affiliate	$ 40,900		90,900
Loss on settlement of disputed terms of warrant			768,602
Total other (income) expense	$ 61,032	$ (25)	899,545	$ (25)
Loss from continuing operations	$ (320,951)	$ (494,850)	$ (1,656,851)	(574,328)
Net loss from discontinued operations				(58,892)
Net loss	$ (320,951)	$ (494,850)	$ (1,656,851)	$ (633,220)
Basic and diluted net loss per share:
Continuing operations	$ (0.01)	$ (0.01)	$ (0.04)	$ (0.02)
Discontinued operations				0.00	[1]
Net loss per share	$ (0.01)	$ (0.01)	$ (0.04)	$ (0.02)
Basic and diluted weighted-average common shares outstanding:	44,850,363	43,620,000	44,630,287	32,592,376

[1] Denotes loss of less than $0.01 per share.

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ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2015

ACCRUED EXPENSES [Abstract]

ACCRUED EXPENSES

NOTE 7 – ACCRUED EXPENSES

Our accrued expenses consist of:

	June 30, 2015		December 31, 2014
Accrued consulting fees	$	110,000	$	110,000
Accrued wages and related costs		232,868		433,963
Accrued interest expense		46,875		6,832
Accrued expenses - other		783		—
Total accrued expenses	$	390,526	$	550,795

The $110,000 accrued consulting fees at June 30, 2015 and December 31, 2014, represent fees owed to consultants working on a research and development project that is approximately 80% complete. See Note 12.

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EQUITY METHOD INVESTMENTS

6 Months Ended

Jun. 30, 2015

EQUITY METHOD INVESTMENTS [Abstract]

EQUITY METHOD INVESTMENTS

NOTE 6 – EQUITY METHOD INVESTMENTS

Our equity method investments consist of:

	June 30, 2015		December 31, 2014
Lone Mountain Partners, LLC (“Lone Mountain”) – 25% interest	$	—	$	50,000
Cannabinoid Research & Development Company Limited (“CRD”) – 50% interest		88,000		88,000
Total equity method investments	$	88,000	$	138,000

Lone Mountain

On August 14, 2014, we acquired a 25% membership interest in Lone Mountain Partners, LLC, (“Lone Mountain”) for $50,000 and a commitment to provide future services, including, but not limited to, assisting with the application to obtain licenses to operate a medical marijuana entity in Nevada and to provide  standard operating procedures, security protocols, extract processing and equipment design, cultivation and processing center management, staffing and assistance with ongoing management of Lone Mountain. During the second half of 2014, we advanced Lone Mountain $40,900 for license application fees. As of December 31, 2014, Lone Mountain did not have any operations or operating activities. We accounted for our $50,000 cash contribution as an equity method investment and the $40,900 advance as amounts due from related parties on our condensed consolidated balance sheets.

During the six months ended June 30, 2015, Lone Mountain incurred operating losses in excess of $400,000. We recognized our 25% share of these losses up to the carrying amount of our equity method investment and advances to Lone Mountain and included this total $90,900 loss in equity in net loss of unconsolidated affiliate in our condensed consolidated statements of operations.  

CRD

On August 15, 2014, we acquired a 50% interest in Cannabinoid Research & Development Company Limited (“CRD”), a Jamaican company, in exchange 40,000 shares of our common stock valued at $88,000 based on the previous day's closing price of our stock. We also committed to provide expertise on design-build, genetics, cultivation, production, processing, productizing, labeling, packaging, marketing, branding and distribution of products, as well as use of our intellectual property in the operations of CRD. As of June 30, 2015, CRD did not have any operations or operating activities. We accounted for this $88,000 as an equity method investment on our condensed consolidated balance sheets. As we have not yet issued the 40,000 shares, the $88,000 is classified as common stock not yet issued on our condensed consolidated balance sheets.

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PREPAID EXPENSES (Tables)

6 Months Ended

Jun. 30, 2015

PREPAID EXPENSES [Abstract]

Schedule of prepaid expenses and other assets

	June 30, 2015		December 31, 2014
Prepaid corporate finance services	$	83,290	$	—
Prepaid investor relations services		6,667		121,500
Other prepaid services and fees		44,543		55,900
	$	134,500	$	177,400

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DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2015

DISCONTINUED OPERATIONS [Abstract]

DISCONTINUED OPERATIONS

NOTE 14 –DISCONTINUED OPERATIONS

On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to the advanced skin care business. The assets were sold to MySkin Services, Inc. (“MTA”), a business partly owned by Ms. Stoppenhagen in exchange for a $15,000 payable we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on June 30, 2014. See Note 1 for further detail on our change in operations.

The following details our loss from discontinued operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues	$	—	$	—	$	—	$	20,684
Operating expenses:
Selling, general and administrative		—		—		—		63,872
Loss on disposal of assets		—		—		—		15,704
Total operating expenses		—		—		—		79,576
Loss from discontinued operations, before income taxes		—		—		—		(58,892	)
Provision for income taxes		—		—		—		—
Loss from discontinued operations, net of income taxes	$	—	$	—	$	—	$	(58,892	)

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STOCKHOLDERS' DEFICIT

6 Months Ended

Jun. 30, 2015

STOCKHOLDERS' DEFICIT [Abstract]

STOCKHOLDERS' DEFICIT

NOTE 10 – STOCKHOLDERS' DEFICIT

Stock Options

On January 9, 2015, we awarded 200,000 stock options to each of Messrs. Blackmon, Verzura and Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.70 per share during the ten year term of the option.

We calculated the fair value of each option to be approximately $0.70 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation:

Stock price	$	0.70
Exercise price	$	0.70
Risk free interest rate		1.98	%
Expected term (years)		10.0
Expected volatility		173	%
Expected dividends		0	%

At December 31, 2014, the fair value of these 600,000 options totaling $417,664 was included in accrued expenses on our condensed consolidated balance sheets and on January 9, 2015, the option grant date, we increased common stock and decreased accrued expenses by this amount to account for the issuance of these options on that date.

The following table summarizes our stock options outstanding as of June 30, 2015 and December 31, 2014:

	Six Months Ended June 30, 2015
	Number of Shares		Weighted Average Remaining Life (years)		Weighted Average Exercise Price
Stock options outstanding, beginning of period		—		—	$	—
Issued		600,000		10.0		0.70
Exercised		—		—		—
Expired		—		—		—
Stock options outstanding, end of period		600,000		9.5	$	0.70
Stock options exercisable, June 30, 2015		600,000		9.5	$	0.70

Common Stock Issued For Warrant Outstanding

On February 10, 2015, we issued 621,000 shares of our common stock valued at $987,390 based on the previous day's closing price, to Typenex Co-Investment, LLC ("Typenex") in exchange for the return of Warrant #1 to Purchase Shares of Common Stock (the “Warrant”) that we issued to Typenex on August 13, 2014, as part of a financing arrangement.

On February 10, 2015, we calculated the fair value of the Warrant to be $218,788, or approximately $1.29 per underlying share, utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation:

Stock price	$	1.59
Exercise price	$	3.00
Risk free interest rate		1.05	%
Expected term (years)		2.6
Expected volatility		183	%
Expected dividends		0	%

The Warrant gave Typenex the right to purchase 170,044 shares of our common stock on the issuance date and provided for adjustments to the number of shares underlying the Warrant upon occurrence of certain events including subsequent sales of our common stock. Our repurchase of the Warrant resulted in Typenex forgoing its potential right to receive shares in excess of the original 170,044 shares underlying the Warrant on the original issuance date. On February 10, 2015, we recorded the $768,602 fair value of the common shares issued in excess of the $218,788 fair value of the Warrant reacquired as a loss on settlement of disputed terms of warrant in our condensed consolidated statements of operations and as an increase in common stock on our condensed consolidated balance sheets. On February 10, 2015, we cancelled the Warrant and recorded the $218,788 fair value as an increase to common stock.

Common Stock Issued For Services

On March 2, 2015, we issued 30,000 shares of common stock valued at $42,600, based on the previous trading day's closing price, as consideration for consulting services from an independent contractor. The $42,600 of share-based compensation expense is included in included in general and administrative expense in our condensed consolidated statements of operations.

On April 23, 2015 we issued 60,000 shares of common stock valued at $47,400, based on the previous trading day's closing price, as consideration for prepaid accounting fees. The $47,400 is being recognized as share-based compensation expense as services are rendered. During the three and six months ended June 30, 2015, we recorded $26,998 and $41,356, respectively, of share-based compensation expense and included this in general and administrative expenses in our condensed consolidated statements of operations. The remaining $6,044 as at June 30, 2015, is included in prepaid expenses on our condensed consolidated balance sheets and will be recognized in the third quarter of 2015.

On April 23, 2015, we issued 126,500 shares of common stock valued at $99,935, based on the previous trading day's closing price, as consideration for prepaid corporate finance fees. The $99,935 is being recognized as share-based compensation expense as services are rendered. During the three and six months ended June 30, 2015, we recorded $33,312, of share-based compensation expense and included this in general and administrative expenses in our condensed consolidated statements of operations. The remaining $66,623 as at June 30, 2015, is included in prepaid expenses on our condensed consolidated balance sheets and will be amortized on a straight-line basis over the four month remaining term of the contract.

Warrants:

The following table summarizes our share warrants outstanding as of June 30, 2015 and December 31, 2014:

	Six Months Ended June 30, 2015
	Number of Shares			Weighted Average Remaining Life (years)		Weighted Average Exercise Price
Warrants outstanding, beginning of period		3,170,044			1.3	$	11.52
Issued		—			—		—
Exercised		—			—		—
Repurchased and cancelled		(170,044	)		2.5		3.00
Expired		—			—		—
Warrants outstanding, end of period		3,000,000			0.8	$	12.00
Warrants exercisable, June 30, 2015		3,000,000			0.8	$	12.00

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DEFERRED REVENUE

6 Months Ended

Jun. 30, 2015

DEFERRED REVENUE

DEFERRED REVENUE

NOTE 8 – DEFERRED REVENUE

Our deferred revenue consists of:

	June 30, 2015			December 31, 2014
Deferred revenue – WeedMD	$	653,750		$	743,750
Deferred revenue - FoxBarry		200,000			200,000
Less – current portion		(380,000	)		(500,000	)
Deferred revenue, net of current portion	$	473,750		$	443,750

As described in Note 4 above, on June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WMD in exchange for future consulting services and use of our intellectual property. We recorded the $893,750 fair value of these securities as deferred revenue and we recognized $150,000 of this amount as revenue during the period July 1, 2014 through December 31, 2014, based upon our initial three year estimate of the service period involved. Based on recent discussions with WMD, we now expect to deliver the remaining consulting services and use of our intellectual property to WMD on a relatively consistent monthly basis during the four year period January 1, 2015 through December 31, 2018. Accordingly, we are now recognizing $15,000 of deferred revenue per month and during the three and six month periods ending June 30, 2015, we recognized a total of $45,000 and $90,000, respectively, of revenue applicable to this arrangement. At June 30, 2015, we expect to recognize $180,000 of the remaining $653,750 WMD deferred revenue during the next twelve months and accordingly, we have classified the $180,000 as a current liability on our condensed consolidated balance sheets.

On December 28, 2014, we entered into a royalty and consulting services agreement with FoxBarry Farms, LLC (“FoxBarry”) whereby we received a $200,000 prepaid royalty payment from FoxBarry. We will recognize deferred royalty revenue based on actual applicable sales as defined in the agreement. During the three and six months ended June 30, 2015, we did not recognize any deferred revenue related to this agreement. We have classified the $200,000 as a current liability on our condensed consolidated balance sheets as we expect to recognize this amount during the next twelve months.

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NOTES PAYABLE

6 Months Ended

Jun. 30, 2015

NOTES PAYABLE [Abstract]

NOTES PAYABLE

NOTE 9 – NOTES PAYABLE 

Our notes payable consist of:

	June 30, 2015		December 31, 2014
Note payable - WeedMD	$	175,000	$	175,000
Note payable – unrelated third party		600,000		600,000
Total notes payable	$	775,000	$	775,000

On July 7, 2014, we issued a $175,000, unsecured demand promissory note bearing interest at 5% to WeedMD for cash used in our business development activities. Interest expense during the three and six months ended June 30, 2015, applicable to this note was $2,181 and $4,339, respectively, and accrued interest payable at June 30, 2015 and December 31, 21014, was $8,606 and 4,267, respectively.

On December 18, 2014, we issued a $600,000 unsecured promissory note bearing interest at 12% to an unrelated third party. The principal and accrued interest are due on the earlier of December 17, 2015, or  upon the closing of certain capital raising transactions as described in the note. The default rate of interest under the note is 18%. Debt issuance costs of $13,500 were immediately recognized as interest expense as, at the time, we expected to close on a capital raising transaction in early 2015.  Interest expense during the three and six months ended June 30, 2015, applicable to this note was $17,951 and $35,704, respectively, and accrued interest payable at June 30, 2015 and December 31, 2014, was $38,269 and $2,565, respectively.

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SHARE-BASED COMPENSATION

6 Months Ended

Jun. 30, 2015

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION

NOTE 11 – SHARE-BASED COMPENSATION

Share-based Compensation

We recognize share-based compensation expense in cost of revenues and general and administrative expense based on the fair value of common shares issued for services. In addition, we accrue share-based compensation expense for estimated share-based awards earned during 2015 under our 2014 Equity Incentive Plan. Share-based compensation expense for the three and six months ended June 30, 2015 and 2014 is as follows:

	Three Months Ended June 30,
	2015		2014
Share-based compensation expense – amortization of shares issued for prepaid services	$	142,310	$	—
Share-based compensation expense – accrual of estimated share-based awards		105,000		—
	$	247,310	$	—

	Six Months Ended June 30,
	2015		2014
Share-based compensation expense – shares issued for services	$	42,600	$	—
Share-based compensation expense – amortization of shares issued for prepaid services		208,747		—
Share-based compensation expense – accrual of estimated share-based awards		210,000		—
	$	461,347	$	—

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Intangible Assets) (Details)	6 Months Ended
	Jun. 30, 2015
Minimum [Member]
Intangible Assets [Line Items]
Estimated useful life	10 years
Maximum [Member]
Intangible Assets [Line Items]
Estimated useful life	20 years

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SHARE-BASED COMPENSATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
SHARE-BASED COMPENSATION [Abstract]
Share-based compensation expense - shares issued for services			$ 42,600
Share-based compensation expense - amortization of shares issued for prepaid services	$ 142,310		208,747
Share-based compensation expense - accrual of estimated share-based awards	105,000		210,000
Share-based compensation	$ 247,310		$ 461,347

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy)

6 Months Ended

Jun. 30, 2015

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Basis of Presentation

Basis of Presentation - We prepared these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. While we believe that the disclosures presented herein are adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our annual report on Form 10-K for the year ended December 31, 2014. Operating results for the interim periods presented are not necessarily indicative of the results for the full year.

Principles of Consolidation

Principles of Consolidation – Our condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries UC Nevada L.L.C. and UC Colorado Corporation. All intercompany accounts and transactions have been eliminated.

Use of Estimates

Use of Estimates - The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented.

We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our condensed consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term.

Financial Instruments

Financial Instruments – We have adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, Financial Instruments, which requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.

The carrying amounts of our short-term financial instruments, including accounts receivable, prepaid expenses, accounts payable, accrued expenses and deferred revenue approximates fair value due to the relatively short period to maturity for these instruments. Investments in non-marketable equity securities are carried at cost. The carrying amount of our notes payable at June 30, 2015, approximates their fair values based on our incremental borrowing rates.

Cash and Cash Equivalents

Cash and Cash Equivalents - We consider investments with original maturities of 90 days or less to be cash equivalents. We do not have cash equivalents as of June 30, 2015 and December 31, 2014.

Accounts Receivable

Accounts Receivable – Our accounts receivable consists primarily of trade accounts arising in the normal course of business. No interest is charged on past due accounts. Accounts for which no payments have been received after 30 days are considered delinquent and customary collection efforts are initiated. Accounts receivable are carried at original invoice amount less a reserve made for doubtful accounts based on a review of all outstanding amounts on a monthly basis.

We determine our allowance for doubtful accounts by regularly evaluating individual customer receivables and considering the customer's financial condition and credit history, and current economic conditions. Our allowance for doubtful accounts was $16,625 and $0 as of June 30, 2015 and December 31, 2014, respectively. We recorded bad debt expense, included in general and administrative expenses, of $16,625 during the three and six months ended June 30, 2015. We did not record bad debt expense during the three and six months ended June 30, 2014.

Inventory

Inventory - Inventory is valued at the lower of cost or market. Cost is determined using standard costs, which approximates the first-in, first-out method.

Prepaid Expenses

Prepaid Expenses - Prepaid expenses are primarily comprised of advance payments made to third parties for independent contractors' services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods which approximate the life of the contract or service period.

Property and Equipment

Property and Equipment – Our property and equipment are recorded at cost. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over an estimated useful life of three to five years. Assets acquired under capital leases are depreciated over the lesser of the useful life of the asset or the lease term. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from our accounts and any resulting gain or loss is reflected in our condensed consolidated statements of operations.

Intangible Assets

Intangible Assets – Our intangible assets, consisting of trademarks, design mark and provisional patent applications are recorded at cost, and once approved, are amortized using the straight-line method over an estimated useful life of 10 to 20 years.

Investments in Non-Marketable Equity Securities

Investments in Non-Marketable Equity Securities – Our investments in non-marketable equity securities are carried at cost, less write-down-for-impairments, if any. Impairments are based on methodologies, including the valuation achieved in the most recent private placement by the investee, an assessment of the impact of industry and general private equity market conditions, and discounted projected future cash flows. Investments in non-marketable equity securities that expire in less than 12 months, for example stock options or warrants, are classified as current assets; otherwise, we classify investments in non-marketable equity securities as other noncurrent assets.

Long-Lived Assets

Long-Lived Assets – Our intangible assets and other long-lived assets are subject to an impairment test if there is an indicator of impairment. The carrying value and ultimate realization of these assets is dependent upon our estimates of future earnings and benefits that we expect to generate from their use. If our expectations of future results and cash flows are significantly diminished, intangible assets and other long-lived assets may be impaired and the resulting charge to operations may be material. When we determine that the carrying value of intangibles or other long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, we use the projected undiscounted cash flow method to determine whether an impairment exists, and then measure the impairment using discounted cash flows.

We have not recorded any impairment charges related to long-lived assets as of June 30, 2015 or December 31, 2014.

Equity Method Investments

Equity Method Investments – Our investments in entities representing ownership of at least 20% but not more than 50%, where we exercise significant influence, are accounted for under the equity method.

Deferred Revenue

Deferred Revenue - We defer revenue for which product or service has not yet been delivered or is subject to refund until such time that we and our customer jointly determine that the product or service has been delivered or no refund will be required.

Revenue Recognition

Revenue Recognition - We recognize revenue in accordance with ASC 605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on our management's judgments regarding the fixed nature of the selling prices of the products and services delivered and the collectability of those amounts.

Revenue for services with a payment in form of stock, warrants or other financial assets is recognized when the services are performed. The value of revenue paid for with warrants is measured using the Black-Scholes model.

Revenue from product sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred and collectability is reasonably assured. Generally, our suppliers drop-ship orders to our clients with origin terms. For any shipments with destination terms, we defer revenue until delivery is made to the customer. During 2014 and during the six months ended June 30, 2015, sales returns were not significant and as such, no sales return allowance had been recorded as of June 30, 2015 and December 31, 2014.

Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in total direct client service costs. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are presented in the condensed consolidated statement of operations on a net basis.

Cost of Revenues

Cost of Revenues – Our policy is to recognize cost of revenues in the same manner as, and in conjunction with, revenue recognition. Our cost of revenues includes the costs directly attributable to revenue recognized and includes expenses related to the production, packaging and labeling of our Prana medicinals products and personnel-related costs, fees for third-party services, travel and other consulting costs related to our advisory services.

Shipping and Handling Costs

Shipping and Handling Costs - For product sales, shipping and handling costs are included as a component of cost of revenues. During the three and six months ended June 30, 2015 and 2014, we incurred shipping and handling costs of $1,013 and $0, respectively.

Advertising Costs

Advertising Costs - All advertising costs are expensed as incurred. During the three months ended June 30, 2015 and 2014, we did not incur any advertising costs. During the six months ended June 30, 2015 and 2014, we incurred advertising costs of $1,500 and $0, respectively.

Research and Development Expenses

Research and Development Expenses - Research and development (“R&D”) costs are charged to expense as incurred. Our R&D costs include, but are not limited to, consulting service fees and materials and supplies used in the development of our proprietary products and services.

Sales and Marketing Expenses and General and Administrative Expenses

Sales and Marketing Expenses – Sales and marketing expenses consist primarily of fees for professional and consulting services, promotional events and advertising costs.

General and Administrative Expenses - General and administrative expenses consist primarily of personnel-related costs, fees for professional and consulting services, travel costs, rent, bad debt expense, general corporate costs, and other costs of administration such as human resources, finance and administrative roles.

Share-Based Compensation

Share-Based Compensation - We periodically issue shares of our common stock to non-employees in non-capital raising transactions for fees and services. We account for stock issued to non-employees in accordance with ASC 505, Equity, whereas the value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete.

We account for stock option grants issued and vesting to employees based on ASC 718, Compensation – Stock Compensation, whereas the award is measured at its fair value at the date of grant and is amortized ratably over the vesting period. Accounting for share-based compensation to employees requires the measurement and recognition of compensation expense for all share-based payment awards made to employees based on estimated fair values. We estimate the fair value of all stock option awards on the date of grant using the Black-Scholes-Merton pricing model, which is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, actual and projected employee option exercise behaviors, risk free interest rates and expected dividends. We also estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from our estimates.

Income Taxes

Income Taxes - Income taxes are recorded using the asset and liability method. Under the asset and liability method, tax assets and liabilities are recognized for the tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that enactment occurs. To the extent that we do not consider it more likely than not that a future tax asset will be recovered, we will provide a valuation allowance against the excess.

We follow the provisions of ASC 740, Income Taxes. As a result of the ASC 740, we make a comprehensive review of our portfolio of tax positions in accordance with recognition standards established by ASC 740. As a result of the implementation of ASC 740, we recognized no material adjustments to liabilities or stockholders' deficit.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our condensed consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our condensed consolidated statements of operations.

Commitments and Contingencies

Commitments and Contingencies - Certain conditions may exist as of the date our condensed consolidated financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or fail to occur.  We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our condensed consolidated financial statements.  If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Net Loss Per Share

Net  Loss Per Share - We compute net loss per share in accordance with ASC 260, Earnings per Share. Under the provisions of ASC 260, basic net loss per share includes no dilution and is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share takes into consideration shares of common stock outstanding (computed under basic net loss per share) and potentially dilutive securities that are not anti-dilutive.

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Warrants to purchase common stock		3,000,000		3,000,000		3,000,000		3,000,000
Stock options		600,000		—		600,000		—
Total potentially dilutive securities		3,600,000		3,000,000		3,600,000		3,000,000

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss) – We report as other comprehensive income (loss) those revenues, gains and losses not included in the determination of net income.  During the three and six months ended June 30, 2015 and 2014, we did not have any gains and losses resulting from activities or transactions that resulted in comprehensive income or loss.

Segment Reporting

Segment Reporting – Our Company operates as one segment.

Concentration of Credit Risk

Concentration of Credit Risk - Financial instruments that potentially subject us to credit risk consist of cash. We maintain our cash with high credit quality financial institutions; at times, such balances with any one financial institution may not be insured by the FDIC.

The following tables show significant concentrations in our revenues and accounts receivable (net of allowances for doubtful accounts) for the periods indicated:

Percentage of Revenue:

	Three Months Ended June 30,
	2015			2014
Customer A		64	%		—	%
Customer B		14	%		—	%
Customer C		12	%		—	%

	Six Months Ended June 30,
	2015			2014
Customer A		50	%		—	%
Customer B		22	%		—	%
Customer C		15	%		—	%

Percentage of Accounts Receivable:

	June 30, 2015			December 31, 2014
Customer C		100	%		—	%

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements - From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our condensed consolidated financial statements upon adoption.

In May 2014 the FASB issued guidance on revenue from contracts with customers, which implements a five step process of how an entity should recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for us at the beginning of fiscal year 2018, and early application is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact that the adoption will have on our condensed consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing reporting.

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DEFERRED REVENUE (Tables)

6 Months Ended

Jun. 30, 2015

DEFERRED REVENUE

Schedule of deferred revenue

	June 30, 2015			December 31, 2014
Deferred revenue – WeedMD	$	653,750		$	743,750
Deferred revenue - FoxBarry		200,000			200,000
Less – current portion		(380,000	)		(500,000	)
Deferred revenue, net of current portion	$	473,750		$	443,750

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STOCKHOLDERS' DEFICIT (Common Stock Issued For Services and Warrants) (Details) - USD ($)				3 Months Ended		6 Months Ended		12 Months Ended
	Apr. 23, 2015	Mar. 02, 2015	Feb. 10, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Stockholders Equity [Line Items]
Loss on settlement of disputed terms of warrant						$ (768,602)
Warrants cancelled						(218,788)
Issuance of Stock and Warrants for Services or Claims						$ 42,600
Number of Shares
Warrants outstanding, beginning of period (in shares)						3,170,044
Issued (in shares)
Exercised (in shares)
Repurchased and cancelled (shares)						(170,044)
Expired (in shares)
Warrants outstanding, end of period (in shares)				3,000,000		3,000,000		3,170,044
Warrants exercisable (in shares)				3,000,000		3,000,000
Weighted Average Remaining Life (years)
ClassOfWarrantsOrRightsOutstandingWeightedAverageRemainingContractualTerm						9 months 18 days		1 year 3 months 18 days
Issued
Exercised
Repurchased and cancelled						2 years 6 months
Expired
ClassOfWarrantsOrRightsOutstandingWeightedAverageRemainingContractualTerm						9 months 18 days		1 year 3 months 18 days
Warrants exercisable						9 months 18 days
Weighted Average Exercise Price
Warrants outstanding, beginning of period (in dollars per share)						$ 11.52
Issued (in dollars per share)
Exercised (in dollars per share)
Repurchased and cancelled (in dollars per share)						$ 3.00
Expired (in dollars per share)
Warrants outstanding, end of period (in dollars per share)				$ 12.00		$ 12.00		$ 11.52
Warrants exercisable (in dollars per share)				$ 12.00		$ 12.00
Independent Contractor [Member]
Stockholders Equity [Line Items]
Number of shares of common stock issued for services		30,000
Value of shares of common stock issued for services		$ 42,600
Issuance of Stock and Warrants for Services or Claims		$ 42,600
Accounting Service Provider [Member]
Stockholders Equity [Line Items]
Number of shares of common stock issued for services	60,000
Value of shares of common stock issued for services	$ 47,400
Issuance of Stock and Warrants for Services or Claims				$ 26,998		$ 41,356
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized				6,044		$ 6,044
Investment Banking Service Provider [Member]
Stockholders Equity [Line Items]
Amortization term						4 months
Number of shares of common stock issued for services	126,500
Value of shares of common stock issued for services	$ 99,935
Issuance of Stock and Warrants for Services or Claims				33,312		$ 33,312
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized				$ 66,623		$ 66,623
Warrant [Member]
Stockholders Equity [Line Items]
Fair value of warrants			$ 218,788
Typenex Co Investment Llc [Member]
Stockholders Equity [Line Items]
Number of shares of common stock issued			621,000
Value of shares of common stock issued			$ 987,390
Typenex Co Investment Llc [Member] | Warrant [Member]
Stockholders Equity [Line Items]
Number of warrants repurchased			170,044
Loss on settlement of disputed terms of warrant			$ (768,602)
Warrants cancelled			$ 218,788

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EQUITY METHOD INVESTMENTS (Narrative) (Details) - USD ($)		3 Months Ended		6 Months Ended
	Aug. 15, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Aug. 14, 2014
Schedule of Equity Method Investments [Line Items]
Equity method investments		$ 88,000		$ 88,000	$ 138,000
Due from related parties		5,000		5,000	44,012
Equity in net loss of unconsolidated affiliate		$ (40,900)		$ (90,900)
Lone Mountain [Member]
Schedule of Equity Method Investments [Line Items]
Interest acquired (as a percentage)		25.00%		25.00%			25.00%
Equity method investments					50,000		$ 50,000
Operating Losses				$ 400,000
Advances to affiliate					40,900
Due from related parties					40,900
Equity in net loss of unconsolidated affiliate				$ 90,900
CRD [Member]
Schedule of Equity Method Investments [Line Items]
Interest acquired (as a percentage)	50.00%	50.00%		50.00%
Equity method investments	$ 88,000	$ 88,000		$ 88,000	$ 88,000
Shares of common stock issuable for acquisition of interest	40,000
Common stock not yet issued		$ 88,000		$ 88,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating activities:
Net loss	$ (1,656,851)	$ (633,220)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Bad debt expense	$ 16,625
Loss on sale of assets of discontinued operations		$ 15,704
Share-based compensation expense	$ 461,347
Value of non-marketable equity securities recognized as revenue	(90,000)
Equity in net loss of unconsolidated affiliate	90,900
Loss on settlement of disputed terms of warrant	768,602
Changes in operating assets and liabilities:
Accounts receivable	(18,077)
Due from related party	(1,888)	$ 10,774
Prepaid expenses	(18,512)
Accounts payable and accrued expenses	160,054	$ 11,872
Net cash provided by (used in) operating activities	(287,800)	$ (594,870)
Investing activities:
Purchase of intangible assets	(14,385)
Net cash provided by (used in) investing activities	$ (14,385)
Financing activities:
Proceeds from issuance of common shares and warrants		$ 900,000
Net cash provided by (used in) financing activities		900,000
Net increase (decrease) in cash	$ (302,185)	305,130
Cash, beginning of period	321,353	32,414
Cash, end of period	$ 19,168	$ 337,544
Supplemental schedule of cash flow information:
Cash paid for interest
Cash paid for income taxes
Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock for repurchase of warrant	$ 218,788
Cancellation of warrant	(218,788)
Issuance of common stock in settlement of disputed terms of warrant	768,602
Issuance of common stock for services	189,935
Issuance of stock options	$ 417,664
Investment in non-marketable equity securities for deferred services		$ 893,750
Conversion of note payable, related party, into common stock		$ 50,000

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PREPAID EXPENSES

6 Months Ended

Jun. 30, 2015

PREPAID EXPENSES [Abstract]

PREPAID EXPENSES

NOTE 5 – PREPAID EXPENSES

Prepaid expenses consist of:

	June 30, 2015		December 31, 2014
Prepaid corporate finance services	$	83,290	$	—
Prepaid investor relations services		6,667		121,500
Other prepaid services and fees		44,543		55,900
	$	134,500	$	177,400

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NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2015

NOTES PAYABLE [Abstract]

Schedule of notes payable

	June 30, 2015		December 31, 2014
Note payable - WeedMD	$	175,000	$	175,000
Note payable – unrelated third party		600,000		600,000
Total notes payable	$	775,000	$	775,000

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INVESTMENTS IN NON-MARKETABLE EQUITY SECURITIES (Narrative) (Details)			6 Months Ended
	Dec. 09, 2014 shares	Jun. 09, 2014 shares	Jun. 30, 2015 USD ($) $ / shares	Jun. 30, 2015 CAD / shares	Dec. 31, 2014 USD ($)
Schedule of Cost-method Investments [Line Items]
Investments in non-marketable equity securities			$ 593,750		$ 593,750
WeedMD RX Inc. (''WMD'') [Member]
Schedule of Cost-method Investments [Line Items]
Common shares received in exchange for future consulting services and use of our intellectual property | shares		1,187,500
Warrants received in exchange for future consulting services and use of our intellectual property | shares		3,000,000
Equity investment		4.29%
Common shares, price per share | (per share)			$ 0.50	CAD 0.50
Investments in non-marketable equity securities			$ 593,750
Warrants expired | shares	3,000,000
Loss on investment in non-marketable equity securities			$ 300,000

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2015

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

NOTE 15 – SUBSEQUENT EVENTS

We are in the process of disposing our 25% equity interest in LMP in exchange for a mutual release from all claims against us, LMP and the other LMP members. We expect that this transaction will be complete effective July 7, 2015. This transaction will not impact our condensed consolidated financial statements as we have previously written off our investment in and advances to LMP.

In accordance with ASC 855-10 we have analyzed our operations subsequent to June 30, 2015, to the date these condensed consolidated financial statements were issued, and has determined that, other that as disclosed above, we do not have any material subsequent events to disclose in these condensed consolidated financial statements.