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You Didn't See This in The Fins
http://finance.yahoo.com/news/medical-marijuana-inc-shareholder-letter-113000670.html
"To date MJNA received in the 4th quarter a $4.5m dollar payment in CannaVest stock payment towards its licensing obligation, and as disclosed in subsequent filings, the Company has also received $4.5m and a $1.5m payment in stock from CannaVest, for a total stock payment of $10.5m towards licensing and partial inventory."
Short? No Way
Shorting a true penny stock under .50 is just stupid. The downside potential for profit is ridiculously low unless you short a ton but then you have a lot of weight to move which makes covering all that more difficult. The potential to get burned on the upside is far too great.
I did short in February at .45 and closed at .29 but let me tell you that was a grand waste of time. Heres how it went down:
I have a significant amount of shares with ETrade and they wouldn't even let me borrow against my holdings for the short position. I contacted Merrill Lynch to see if I could open a short position in that account but could not as I didn't hole shares with them and they do not own shares in MJNA to borrow against. I had to transfer the shares into my Merrill Lynch account, then short against them. What a waste of time not to mention I got ribbed for playing MJ stocks by some of my close friends at ML in NY. I just said they were jealous because the firm can't invest in MJ stocks just yet.
Bearish Candlestick - Hanging Man
There was a good technical bounce off the 200EMA as bulls took control before the bears got too frisky. I don't like the looks of the hanging man. If you are trading short term, tomorrow is a crucial day to signal a top or signal a reversal of the recent downtrend. The past few days technical trading has been clouded due to PRs and fsuch but barring any significant fundamental events, MJNA should trade based on technicals over the next few days.
http://stockcharts.com/h-sc/ui?s=MJNA&p=D&yr=0&mn=3&dy=0&id=p18157297708
I Don't Know Specifics
I don't have any specific details, I am doing an "armchair analysis".
Wrigley's is most definitely involved in caffeinated gum:
http://www.chicagotribune.com/business/breaking/chi-caffeine-gum-wrigleys-caffeine-gum-spurs-fda-review-20130430,0,7747283.story
It sounds silly but the gum industry is incredibly cut throat. Take a look at the Wiki page for all the crazy acquisitions:
http://en.wikipedia.org/wiki/Gum_industry
Cadbury even bought long time gum maker, Adams Chewing Gum for $4.2billion. Thats trading some serious dough for chewing gum!
Not Sure If I'm an Expert
You don't think it would be wise to sell CanChew to Wrigley's for $250m for both THC and non-THC/CBD varieties of gum? It would relieve MJNA of clinical costs and provide a far more easy to report income since Wrigley's could pay in cash or far more liquid equity than CANV. MJNA management could possibly negotiate a royalty for future sale.
Just speculating man, thats all
The Gum Industry
http://en.wikipedia.org/wiki/Gum_industry
I have worked closely with Wrigley's, Cadbury and Hershey in a certain capacity and let me tell you these guys have dough to spend.
Here's how this could get really awesome for MJNA and CanChew. The gum industry is estimated at $19b, that nineteen billion dollars. R&D is a major part of the industry and companies spend enormous sums finding new flavors, textures and additives to freshen their product line.
CanChew has already done the R&D. They've already developed the product. And even better, they have an entirely new, non-intoxicating, medically beneficial additive in CBDs. Folks, CBDs are not "Flavor crystals" or gelatin inside gum gimmicks. CBDs are legitimate medicinal compounds.
This is great stuff. Not only will consumers chew that sh*t up, but gum makers like the ones listed above could very easily start nibbling at MJNA for licensing or buying the CanChew. If Wrigley's bought CanChew not only could MJNA gain some serious, credible revenue but it may be possible to get royalties.
I am hoping to do a full report on CanChew in the near future.
A Great Comment Regarding Analysts
This was posted on a private A@PL board I have been on since 2006. The comment is in response to a Phillip Elmer Dewitt article about how flawed even professional analysis can be. It has some great perspective on market comments and gives insight into many of the attacks against MJNA. Ironically, it talks about WR Hearst, a major anti-MJ activist who used fear, ignorance and media influence to spread his lies.
"You are spot on with your article. I have been investing for 40 years. I have concluded over the past few years that the vast majority of analysts are nothing but whores in search of the street corner with the brightest light. Any rumor that can get their articles hits is worthy of peddling whether the rumor has any basis in fact or not. What has happened to honest journalists/analysts who vet their sources before publishing something that ultimately is nothing but a pure fabrication and worse yet impact the markets? What facts were brought to light last year as hedge funds sold shares of Apple en masse while small investors were left holding the bag? Small investors relied on the likes of Jim Cramer who attributed the selling to year-end tax planning by the hedge funds to capture gains at lower 2012 tax rates. He implied after the beginning of the year that shares would be bought back only to back peddle when the buying never happened. But that’s OK. CNBC makes sure to have legal disclaimers to protect their yellow journalism.
I question CNBC in particular. It seems that their raison d’etre is to be the modern day William Randolph Hearst of business “news”. Maybe, instead of leading the nation to war, they can sensationalize to the point that we have a major stock market crash. What value is there in interviewing the likes of John Sculley to comment on Apple? This is the same guy that drove Steve Jobs out of Apple and destroyed Apple to the point it was on life support. What value is there in interviewing Bob Nardelli for his opinion on business issues? This is the man who failed Home Depot and destroyed Chrysler. Why would anyone want to hear the opinions of Henry Blodget? He touted stocks in public only to “allegedly” disparage the same stocks in internal Merrill Lynch e-mails. The “allegations” led to Blodget being charged with civil securities fraud, his agreement to be permanently banned from the securities industry and the payment of millions in fines. Apparently his “ban” doesn’t include commenting on the securities industry as CEO and Editor-in-Chief of Business Insider and contributor to so-called “reputable” business publications.
If it doesn’t exist, you should start a blog that critiques analysts by name. At a minimum someone needs to identify to the small investor those analysts who are consistently wrong. Ideally it would be wonderful to have an investigative journalist determine whether these guys are just incompetent or have an ulterior motive for their articles. Hopefully such a blog could lead to enough of a public outcry that these clowns can be held legally and financially accountable for their actions (wishful thinking, I know!).
Thanks again for a great article."
I Watch Deadliest Catch So I'm a Crab Expert
That is an analogy for Alan Brochstein's MJNA analysis.
He has never:
Called MJNA to discuss his concerns with a representative
Visited a dispensary carrying Dixie products
Visited a facility producing Dixie products
Used or talked to a user of Dixie products
Attended HempCon, Cannabis Cup or any other marijuana trade expo
Called a state or government official to discuss official legal outlook of marijuana
These are just of few of the most basic measures professional analysts take to understand an operation. His analysis is pure conjecture at best
Lil Market Updraft
Level II lighting up.
For Sure NMariner
Medical
Recreational
Industrial
Locked up by MJNA.
Medical is probably around a $10-100b market
Recreational could be as much as $50b nationwide, worldwide as much as $150b (according to 2005 UN study)
Industrial is who knows how many billions of dollars, paper, plastics, construction materials, supplements, food, textiles......we could be looking at $500b
Three Pillars of the Marijuana / Hemp Industry
1. Medical
2. Recreational
3. Industrial
I am not going to provide links but if you want to see where I pull most of the figures discussed below, you will find the links and a lot more information in this blog I wrote. This is just an expansion on some of the points discussed there.
(http://seekingalpha.com/user/8529191/instablog).
Medical
Epilepsy, cancer, arthritis, autism, depression, insomnia are just a few of the conditions that can be treated with cannabis. The irony here is now that states are passing "medical" marijuana laws which directly contradicts DOJ Schedule I status. Unfortunately, since the US government long banned testing of the medical benefits of cannabis, effectually saying there are no benefits, it has only been a few years since proper clinical testing has begun. Anyone who has regularly used cannabis for medicinal purpose, or knows people suffering from terminal illness who use it for treatment and relief, can tell you about the medical benefits.
But thats probably not why you're reading this. Lets remove the sentimental reasoning and look at how this could relate financially. Epilepsy, cancer, arthritis, autism, depression and insomnia are each individually billion dollar markets. Cancer treatment alone is estimated around $80. Epilepsy, depression, arthritis and insomnia are all treated with incredible strong, addiction forming drugs with terrible side effects including death. Cannabis is 100%, undeniably non-lethal. Once again, each of those markets are $10b empires.
The medical value of cannabis could easily be in the $100s of billions. THC and CBDs crossover so many different conditions unlike so many other conditions that can only be treated by one specific drug. I find it insane that big pharma companies are not all over this right now!
So how does this effect MJNA? Who knows but the company is in an excellent position being the industry leader in THC and CBD delivery. Dixie brands has an extensive product line up offering measure doses. CanChew is also another division of MJNA specializing in CDB delivery. There is potential for Dixie or CanChew to license extraction processes or products or even be bought out by a pharmaceutical company. If you were to invest in the marijuana industry based on medical criteria, companies like CBIS have made concerted efforts to expand the drug, but the absolute leader is Medical Marijuana Inc.
Recreational
Obviously the legal implications here are the biggest roadblock. Colorado and Washington have paved the way, successfully voting for recreational legalization. The legislation is in the works but from what is being reported, Colorado must implement Amendment 64 by 2014. The United Nations estimates the worldwide cannabis market to be roughly $150b. According to a 1998 NORML crop report, an estimated street value of $43b worth of cannabis was produced in the US alone and that is 1998 numbers not adjusted for inflation! And those both those figures are for primarily "recreational" use.
Cleary, despite many country's best efforts to combat marijuana by using the mightiest forces of police, militaries, politicians and legislators, there is a strong demand for cannabis. And once again, MJNA meets those demands with Dixie products. One often overlooked fact is the likelihood of new or casual users to prefer drinkable or edible forms of THC delivery, especially if they are not tobacco users. Because of the legal status of marijuana, major liquor conglomerates cannot even enter the market, giving Dixie a running start on the industry. Like big pharma, Dixie and MJNA could license their products or be bought out.
Industrial
While the medical and recreational markets hold enormous promise, it is perhaps the industrial market for hemp that holds the most potential. Hemp has been used for over 10,000 years with documented use in the MIddle East in ancient times. George Washington passed legislation in Virginia requiring by law that citizens grow hemp. The industrial use of hemp is not only proven throughout history but special interests and greedy industrialists have marginalized it over the past century.
It is nearly impossible to estimate the value of hemp as an industrial product because the uses are so vast. Textiles, oils, fuels, building materials, plastics, food, paper products, foods, supplements.....the list could go on for paragraphs. The potential is so vast that putting a dollar value on it can be mind boggling. MJNA has access to international supplies of hemp on a massive scale and the HempMeds subsidiary is making progress in this sector.
It is rare that one product can crossover so many different business sectors. In fact, marijuana and hemp are in a category of their own because the uses are so varied. MJNA is uniquely positioned in each of these sectors; medical, recreational and industrial. The potential is enormous and could quickly propel MJNA's revenues into the billions of dollars. Of course, there are risks involved such as traditional investment risks, as well as risk regarding the existing prohibition. The investment risks are inherent and dependent upon the individuals personal finances. The legality issues of cannabis are evolving and full federal legalization, or at the very least a "states right to choose" approach seems to be the most likely direction.
The ball is rolling. The question is will it roll right past you, or will you hop on an go for a ride?
Hey IPWT, I Agree
Totally dude. I'm just trying to keep a lid on my excitement and not get crazy. I think the last 2Q of 2013 are going and the whole 2014 is going to be a barn burner.
$40b Market Cap is Possible
It would take a "wildest dreams" scenario, such as major medical advancements. The mere hinting of successful CBD trials for epilepsy or cancer cell reduction or autism.....this could pull a DNDN. Ironically, DNDN went from 5 to 25 in a month, but since the Provenge drug has been released, the pps is back down to 5.
I'm Happy
I can understand why you might not be happy if you bought above .30 but not everyone is in that position. I'm back up over 1000% in a few moths time, my shares have been long been paid for and I added at .18
I'm pretty pleased with management. Michelle's letters answered some questions and hopefully the company follows through.
I've had the same rejection
Forgive me but someone asked me about SA's rejection reasoning but I couldn't reply because I reached my 15 post daily limit.
I don't remember the exact verbiage, but I was rejected twice for my post that was stickie here "Black Markets Come to Light"
First rejection said I needed to provide links and as a first time contributor, I should look for a more suitable topic because the stocks I discussed were highly subjective to manipulation. I found that laughable because several new SA contributors have discussed MJNA and the site had just released Infatalis and the other hack's pieces.
So I added links to support any specific claims. I added disclaimers about volatility, risks, yadda, yadda. I cut out anything too speculative and was rejected again.
This time because my personal profile was too limited in information. You mean like Infatalis who must clearly be using his birth name and not a pseudonym.
SA is a joke
I doubt that Ashraf
I seriously doubt you are going to publish another article about MJNA right now. Hopefully by now you have at least made contact with an attorney just to discuss any potential liability in this situation and if you did, they would undoubtedly tell you to cease any further inflammatory writing at this time as a precaution.
You, and the other hacks, and the entire SA website need to understand what constitutes free speech and what constitutes willful, malicious words. "I believe this company is involved in fraudulent activity" is far different from "don't need to do this to detect obvious penny stock fraud" (referring to my asking about your DD research methods).
Now I'm not yet making claims as to stock manipulation or "other" compensation as your intent from these articles, but the timing is awfully suspect considering you were limited to writing about tech until MJNA skyrocketed and had the pleasure of being "analyzed" by you.
Good luck. Let me just tell you, if you continue to write factless articles without any serious DD like the questions I posed to you in prior messages, you will never get past these $1000 hack blogs you write.
Alan You Have Alleged Fraud
You did not merely call to attention the account on the reports you alleged it was some sort of fraud and recommended people stay away from the company or not trust management (granted you did so in a much more graceful and calculated manner by "alleging" for the most part). But you did make a comment as to how management has not confirmed fraud, or something to the effect that I screen grabbed and forwarded to management.
However Ashraf and especially Infatalis have made direct, unquestionable accusations of fraud. I have forward about 10 statements from Ashraf alone that are grounds for libel. The article from Infatalis is a "smoking gun" for libel, to use your favorite term.
It's all a matter how MJNA wants to proceed but there are most certain plenty of grounds to file a claim.
Thomas I Have the Same Problem with SA
I wrote an article that was stickied here. SA rejected it.
Then I posted an instablog last night, and they published it only to remove it by this morning.
The blog was a critical look at the industry. I offered personal disclosure about myself as well as several stern warnings about using caution committing capital to MMJ stocks, followed by several paragraphs detailing the reasons for caution.
My advice, don't feed the animals. Stop visiting that website entirely because every time you do, they make money
Examinous Its Called Defamation
Libel is the first claim that comes to mind. Essential what we have here is a party making a claim of fraud against another party, USING A THIRD PARTY MEDIUM, causing damages as a result. That is textbook libel.
Infatalis, libeled Ms. Sides by falsely identifying her as a criminal in a widely distributed publication, causing potential financial damages to the company as well as punitive damages to her reputation. It is clear as day. Infatalis disclosed a short position so the libel could carry other circumstances such as financial fraud.
Ashraf has repeatedly called the company a fraud in no uncertain terms (terms which I have screen grabbed and forwarded to MJNA management as well as reviewed with family who are lawyers). He has done so in a "third party publication" and again caused damage to not only the company but the auditor Mr. Imbimbo, and the lawyer who signed off on the reports, Mr. Corrigan.
The only question here is does SA commit the time and capital to follow up on a claim. For $1500 or so, MJNA's counsel could send a stern letter to SA and the authors, threatening to bring a suit. It would be costly to retain counsel for such matters, so MJNA needs to decide if a settlement is worth the effort. The restitution could range from injunctions against SA and the authors, banning them from publishing info about the company for a certain time frame, or worse, the website could be shut down. Restitution could also come in financial penalties, such as fines and authors handing over any income from the writings.
And that is just from the defamation claim. If there are any other improprieties such as financial fraud, conspiracy to commit fraud, using media to perpetrate financial fraud.......this could get interesting real fast.
I almost want to hire a PI to look into this. I did once before to track a Yahoo poster who threatened my life numerous times back in 2005 as the result of some exchanges on the AAPL Yahoo board. Turns out the guy was a complete loner, loser in NJ so I let it go but its amazing what you can find out when you pay people to do it for you.
Seeing Through the Smoke
Once again, I have been deleted from SA. I posted this instablog last night. It was published. But has now been removed? Sketchy stuff. That website is a JOKE! Threatened by my blogs
Seeing Through The Some
The past few months have been a most interesting time for the expanding quasi-legal marijuana and hemp markets. Several publicly traded stocks like MJNA, MDBX and NTRR have seen explosive growth over the past 6 months and the result has been a barrage of press, message board activity and public interest. In an effort to put some perspective on the recent hype, I'd like to offer some insight as a seasoned financial market participant with almost 2 decades of experience in the cannabis industry.
Personal Disclosure
First let me get the personal disclosures out of the way in order to clarify my experience. I have been a market participant, professionally and personally for over 15 years. Without getting into too much detail, I have worked at Merrill Lynch in NY and have been involved with proprietary trading firms in Los Angeles, aka dark pools, as well as personally trading and investing for over 10 years. Currently, I am not professionally involved in finance, as I found managing other people's money to be unfulfilling. Ironically, my current work in the film/TV business has me managing budgets and OPM, albeit in a more creative fashion and I am still well compensated for the work.
In addition to the financial background, I have extensive experience with cannabis from cultivation to distribution to consumption. Again, without specific details, I have been around cannabis for more than half my life and I have been a medical user since 2003 when California passed legislation allowing cannabis to be sold at complaint retail locations. My reasons for using cannabis vary, but by no means do I fit into the typical "Jeff Spicoli" type "stoner". I am in excellent physical condition. I work 12 to 24 hours per day on a regular basis. I rarely drink alcohol. Aside from the occasional instance, I rarely use other recreational drugs but I never use anti-depressants or other legal medication except for maybe antibiotics.
For the last bit of personal disclosure, I have long positions in MJNA, ERBB, CBIS and SKTO. While my displacement is long, I understand the tenuous nature of these equities and would only recommend buying them with discretionary funds. The cannabis market and the companies involved are in their infancy, therefore making investing extremely risky. The opportunity to make a lot of money is equal to the potential to lose it all, so please invest only what you can stand to lose.
Now that that is out of the way, hopefully you have stuck around to read the cannabis market analysis.
Historical Background of Hemp and Cannabis
Every single major culture across the world, past and present, has used cannabis and hemp. The earliest appearance of cannabis is from ancient Chinese texts from over 4000 years ago. Since then Greeks, Romans, Mongolians, Persians, European and American cultures have documented use of cannabis for medicinal, spiritual, and social purposes. Also, many of these cultures used hemp for textiles, building material and food. The first use of hemp can be documented as far back as 10,000 years ago. Contrary to popular myth, the US Constitution was not drafted on hemp paper but the first US flag certainly was made from hemp, as were the Union soldier's uniforms during the Civil War. In fact, George Washington enacted legislation requiring Americans to grow hemp and Virginia actually threatened imprisonment for failure to grow hemp. Schoolbooks were even made of hemp prior to 1880. According to a 1938 issue of Popular Mechanics, hemp was a "billion dollar crop". See the following links to better understand historical uses of cannabis and hemp referenced above:
http://www.hort.purdue.edu/newcrop/ncnu02/v5-284.html
http://www.psychologytoday.com/blog/the-teenage-mind/201105/history-cannabis-in-ancient-china
http://en.wikipedia.org/wiki/Cannabis_(drug)
http://www.lewrockwell.com/spl2/reason-hemp-is-illegal.html
Unfortunately, the past decade has been particularly cruel to cannabis and hemp, especially in the United States. Starting at the turn of the 19th century, wealthy private interests and public legislative bodies in the US embarked on several decades' worth of disinformation and lies in a successful effort to prohibit cannabis and hemp. Perhaps the most well know opponent of marijuana was William Randolph Hearst whose overwhelming influences via his interests in media lead to shaping the negative social opinions. Hearst was instrumental in outlawing cannabis by using racism and ignorance. In a more sinister capitalist maneuver, in order to protect business interests, Hearst is alleged to have lobbied heavily for the outlaw of hemp. Read more about Hearst and other prohibitionists devious ways of creating negative public perception regarding hemp and marijuana.
http://marijuanacannabis.wordpress.com/2008/12/10/quotes-from-the-people-that-made-marijuana-illegal/
Current Status of Hemp and Cannabis in the United States
By now, most people are aware of the extent of marijuana and hemp prohibition in the USA. Currently, federal law prohibits cultivation, distribution and use of cannabis and also outlaws the production of hemp by way of the Marijuana Tax Act and Controlled Substances Act (among other legislation). Below are links to the official government position on hemp and marijuana.
http://www.fda.gov/regulatoryinformation/legislation/ucm148726.htm
http://www.justice.gov/dea/druginfo/ds.shtml
What most people are not aware of is the changing status of cannabis, both for medicinal and recreational use. As the medical marijuana (MMJ) movement has gained some notice across the US, most Americans, especially those in non-medically approved states, have no idea the extent of the MMJ growth. So far, 18 states have enacted medical marijuana measures with 2 states, Colorado and Washington passing state amendments allowing for recreational legality.
Residing in California, I can attest to the explosive growth of the MMJ market. At one point Los Angeles had more MMJ dispensaries than Starbucks. The city has made significant strides to curb further expansion of dispensaries and the number of shops has since decreased. However, the demand for cannabis has not. In 2003, when I first became a MMJ patient according to legal standards, having a MMJ recommendation was rare. Today, I am proudly one of many.
Of course, there are many detractors of MMJ in California as well, typically entities that receive some sort of financial compensation for their anti-marijuana persuasion. Ironically, in 2010 when CA had full recreational legalization on the ballot, it was the MMJ community that fought against it because they were afraid of losing the tight grip they held on the cannabis market. Sadly, the measure for recreational use did not pass but the medical status has not changed.
Since 2003, CA residents can receive a doctor's recommendation allowing entrance into a retail establishment to buy a variety of cannabis products, from flowers or buds to drinks, food and candies. Most importantly, patients can access medicines that fit their specific needs. There is endless advertisement for erection pills, pain medication and mood altering drugs, all with potentially lethal side effects. Traditional drug providers, doctors and advertisers (and pharmaceutical sales reps, pharmacies...) make billions pushing drugs onto patients with little concern, much less knowledge towards long term side effects. Today, many doctors are like auto mechanics looking for every opportunity to sell you something you may not actually need. Having used cannabis for almost 2 decades, I can tailor my use to my needs with limited if any side effects, but absolutely no fear of death from overdose or an adverse reaction.
Marijuana and Hemp Markets - Investment Opportunity
The developing medical status of marijuana has gained momentum nationwide giving way to legal investment opportunities. Today, there are a handful of publicly traded companies involved in the cannabis industry. It is important to stress that while these companies are involved in the traditionally black markets marijuana, as of right now, investing or trading the equities present absolutely zero legal risk to individuals. Unfortunately, the same does not apply to financial institutions that are unable to profit from potentially illegal activity and therefore cannot be involved with the cannabis industry. Yet.
Despite the lack of revenue for development, the industry is flourishing, as it already exists on a long established black market. According to a 2005 United Nations World Drug Report, the estimated worldwide market for cannabis is $141.8 billion, with an estimated 164 million users. The UN Report can be accessed at the following link (as well as the specific pages with the estimates);
http://www.havocscope.com/global-marijuana-market-value-and-users/
Additionally, a 1998 crop report by NORML estimated the annual US crop production of marijuana had a street value of more than $43 billion. Marijuana growers drew approximately $15 billion "on the wholesale market."
http://norml.org/component/zoo/category/norml-report-on-us-domestic-marijuana-production
Keep in mind those are 1998 and 2005 figures, and both US and worldwide estimates are for underground black markets of cannabis. Regardless, those numbers indicate an enormous market. Despite being illegal, marijuana is the number one cash crop in many states according to the NORML report.
Cannabis is now changing from black markets to grey and even white markets. There are three major sectors where the cannabis industry is gaining footholds;
Medical - Cannabis has long been used as a medicine. Today's medical uses include stress and pain relief, insomnia, lack of appetite, and glaucoma. Unfortunately, clinical testing for cannabis has been banned for decades, but current legal testing is showing promise treating a variety of conditions; cancer cell reduction, epilepsy treatment, Parkinson's treatment, burn relief. Cannabinoids (CBDs) are being tested in ways previously unheard of and the compounds are extracted with or without the psychoactive, intoxicating elements of THC, depending on the treatment. The potential for revenue in the treatment of the conditions listed above are in the untold tens of billions.
Recreational - There is no doubt of the sizable market for recreational use as evidenced by the black market figures above. But those numbers only tell a part of the story. Pending the federal legal status and reaction to Colorado and Washington's legalization effort, the market could explode. Recreational legalization will pave the way to possible sales of cannabis in a variety of outlets. The legal liquor industry produces roughly $140 billion annually (http://www.alcoholpolicymd.com/pdf/AMA_Final_web_1.pdf). Just a small piece of that market would bring a lot of revenue to cannabis related interests. There is also speculation about "pot tourism" and other residual industires that could spring up from recreational use.
Industrial - Hemp is finally being grown in the US after decades of being outlawed. The uses of hemp are practically unlimited including; paper, nutritional supplements, construction material, textiles, plastics, fuels. The industrial market potential is likely greater than both the medicinal and recreational uses combined. Obviously the possible revenue figures are specualtive but the few uses listed above are enough to draw billions of dollars in revenue.
There are several positive economic impacts on domestic state and national levels. The positive economic impacts include increased tax revenue from seed to sale. The tax revenues come from production, distribution and consumption. The increasing cannabis and hemp market not only offer tax revenue, but also may also greatly benefit employment. Barren farmland could be brought back to use.
Risks of Investment
Obviously, the legal status of hemp and cannabis is a major concern for investment. Aside from the legal status, there are other concerns going forward. Many of the publicly traded companies are not fully SEC reporting entities. Despite ongoing efforts to become fully compliant, the companies discussed below are inherently risky being "penny stocks" on OTC and pink sheet exchanges. The financial reports of these cannabis-based businesses are not as thorough as those of corporations traded on the NYSE or NASDAQ. I strongly recommend potential investors do plenty of due diligence before committing any capital and do not recommend buying MMJ stocks on margin, using only discretionary income for any transactions.
The cannabis market is a "high barrier to entry" market despite various erroneous reports. The federal legality is probably the largest obstacle. There are also other competitive interests whose very existence depends on prohibition. Privatized prisons, police departments, rehabilitation centers, textile manufacturers are just a few of the groups drawing revenues from outlawing marijuana and hemp. The liquor and pharmaceutical industry are also highly threatened by a competitive legal intoxicant that can be grown in the consumer's backyards or closets. Drug cartels are also not happy to see a major product be taken from their realm. Cannabis is also fighting nearly a century of systematic propaganda including people like Ronald Reagan's drug czar who is quoted saying marijuana use leads to homosexuality.
Another barrier to entry is the media. There has been rampant speculation regarding officers at many of the companies. Some of the accusations have merit, however, there are many Fortune 500 companies with executives that have spotted legal and professional histories. Should this be a concern, I would recommend contacting the companies with any questions to get an answer directly from the source.
Many of the wild aspersions cast recently, by one financial website in particular, lack any credible journalistic merit. The authors of these articles have admittedly not contacted the very companies in which they seek to expose for fraud, leading to poor journalism at the absolute least. These authors have also disclosed they have only been following the MMJ field since the explosion in February 2013. None of them have done any traditional analysis performed by even the most amateur analysts such as channels checks, site visits, or contacting management. The only investigation these "journalists" have performed is rooted in search engines and company PRs, something that can easily be performed by any individual with an internet connection and computer.
Medical Marijuana Inc - MJNA
MJNA is perhaps the most recognizable name in the MMJ field, not just because of the name but because of the recent press attention described above. MJNA is at its core an "umbrella" company, holding interests in various entities in the MMJ field. The company does not physically produce cannabis but it does have interests in hemp production. In conjunction with subsidiaries, MJNA does draw revenue from THC based products with limited legal risk. The company has taken strides to mitigate legal jeopardy, but the potential cannot be overlooked.
In February 2013, MJNA went parabolic, skyrocketing from .02 to .50 in a few weeks. Part of the reason for the boost is because the company is reporting significant growth and profit, as well as plans for expansion pending the legal status of cannabis in several states. Unfortunately the parabolic gains were unsustainable and the stock has since retraced to a low of .12 as of the end of April. In March, I posted on the InvestorsHub message board that .18 was a likely upcoming share price with a strong base at .09. As of now, I would be a large buyer if the stock continues below .10 (AGAIN ONLY WITH DISCRETIONARY FUNDS).
MJNA has a market capitalization of barely $100m at the current share price of .12. According to MJNA's earnings reports, the company projected $47m in revenue for 2013. For a highly speculative stock, showing YOY growth, trading just over 2x forward earnings seems pretty cheap. Going off 2014 projected earnings, MJNA is actually trading well below estimates.
There has been some heated debate about the legitimacy of MJNA's earnings report, mostly via opinion-based articles that have not been corroborated with the company. The question you must ask yourself is do you believe management, the auditors and lawyers who are legally obligated to report the truth? Or do you believe opinion-based journalism who's only sources are web searches, with no sources or even contact with the company?
Tranzbyte Corporation - ERBB
ERBB is highly speculative and the one company that faces the most legal peril due to their association with 2 dispensaries in Colorado. Altitude Organics is ERBB's outlets for selling THC based products. Tranzbyte also has a subsidiary, ProximaRF, developing MRI machines and other radio frequency devices. ERBB recently announced the Altitude Organix Network and entry into the popular medical vending machine market.
Of course, ERBB does not have financial reports making this stock nothing short of a lottery ticket. Part of the reason I believe ERBB cannot report earnings is beacuse the company is profitting from MMJ and does not want to paint a traget on the company for the Feds to take aim. However, having discussed revenues with current dispensary owners here in Los Angeles, I have invested in ERBB. Colorado is a test market for recreational use and ERBB is the only publicly traded stock with actual medical marijuana dispensaries. The Amendment 64 task force has also recommended allowing existing medical dispensaries to stay open while new recreational sales dispensaries may have to wait before establishing a location, giving ERBB a jump on sales. At a meager share price of less than .01 and a market cap, I have been buying in 100,000 share lots on a weekly basis.
Cannabis Science - CBIS
CBIS is hemorrhaging money and has not made money since inception. CBIS had a parabolic run back in March 2012, blasting off from .01 to .24 in just a few weeks. The rise was predicated by an announcement that CBIS had anecdotal evidence of their product being used to reduce skin cancer ailments. Unfortunately, the excitement was premature and the stock quickly retraced.
Currently, the company is facing insolvency and buying the stock may not be wise until a little more clarity is provided. Having said that, CBIS is approaching cannabis from a clinical direction, working with the NIH and FDA for clinical trials. CBIS also has a presence in Europe and is working hard to be compliant with their medical standards.
PHOT, SKTO, MDBX and the rest
PHOT is an interesting stock as it manufactures and sells equipment related to cannabis cultivation. Obviously as the industry booms, residual interests such as PHOT should theoretically expand as well. The company is SEC compliant and is fully legal to sell goods in all 50 states.
MDBX is a conundrum. At its peak, MDBX's market cap was nearly $2 billion but the CEO wisely came forth to say the valuation was too high. Since then the stock has dropped and the business model is still unclear.
SKTO is not a stock I really follow. It has gained momentum recently as the company announced a foray into medical marijuana. NTRR is another stock in a similar situation. I will be taking a closer look at these equities in the future.
Conclusion
In the end, the cannabis market is growing like a weed. It is truly exciting to be able to legally invest in the marijuana and hemp markets. Many of the companies involved are highly speculative investments, but have excellent potential to become premiere providers to the public demand for cannabis and hemp. The legal status of cannabis and hemp may be tenuous but society tends to progress rather than digress as it has with so many other wrongly imposed legislation such as slavery, women's suffrage, civil rights, abortion.......For myself, I am willing to commit capital in an effort to profit from the dismantling of outdated cannabis prohibition.
SA Finally Published My Take, Instablog Of Course
Not all of us can achieve the spectacle that has become their "professional" writers but at least I got my .02 on the table and it didn't even cost me a penny. Check it out for a hard nosed look at the industry and MJNA:
http://seekingalpha.com/instablog/8529191-nopancakemix/1807051-seeing-through-the-smoke-cannabis-market-analysis
Absolutely
For $1500 a lawyer can draft a letter to Seeking Alpha and the authors notifying them of intent to file a claim. This can be done as a shake out move or to bring the parties to the negotiating table. Typically most lawyers take 33% of any settlement, as much as 45% if they go into litigation/mediation plus expenses. Good counsel will cost roughly $400-800/hour, and $1200-3500/hour in court on an a la carte basis.
The question becomes is the settlement worth the pursuit or is the ruling likely to be profitable. A class action usually only make the lawyers money but with such a small estimate of investors to bring suit, a sizes settlement wouldn't be spread too thin.
MJNA has clear grounds of slander, libel and slander with intent to gain financially
As for MJNA, what would the restitution be;
Damages compensatory to market cap losses,
Injunction on authors
Injunction on SA
Possible fines paid by SA
Possible recovery of any funds paid to authors
Possible restriction or barring of authors from financial reporting.....
It could be very interesting
Again Very CERTAIN Claim of Fraud
"I originally just thought this was a case of irrational exuberance, but it turns out to have been driven/manipulated by the insiders themselves"
So no official response from the company to several salacious articles by hack authors constitutes fraud? Good thing you're not a lawyer because that sort of goes against the whole innocent before proven guilty. You've already moved past the trial of MJNA officers and convicted them before they are even arrested.
And your AAPL calls are a joke. You got bearish in January 2013 when the stock had already lost nearly 250 pps! That's laughable. Most analysts were bearish way before then and I posted about bearish positions on AAPL Sanity on IV in November.
Late to the game on both MJNA and AAPL. Not really helpful if you want to make money trading but perfect timing if you want to draw attention to obnoxious hack articles of which are your real source of income.
Possible Reason for MJNA Price Supression
Today's ArcView meeting of investors brings potential new money to the table. It is wild speculation, but it is possible some of the bid whacking from the past few days is an effort to drag the price low for some serious buying. With 33m shares traded, that's a mere $3m. Buy a million share lot at .30 for $300k, bid whack the hell out of it til .08, sell at a loss and use the loss as a tax write off, then hold an investors conference to raise capital and start a buying spree, bringing the cost basis down on any leftover shares and building an investment fund in return. Trust me, I've seen similar stuff done with other stocks.
Uhhhh, Awesome!
I can't wait to order some! Of course, I'm waiting until MJNA officially announces the release just in case some jokers set up a fake site to collect credit card info.
Guys, this could be enormous. The gum market is insane and marketing alone for Wrigley's is a multi-hundred million dollar foray. This could easily be an product that could be on shelves at Whole Foods, Trader Joes and other health stores like One Bode.
Exciting!
Alan or Ashraf Please Clarify Reseach on MJNA
1. Have you ever called MJNA to discuss these matters with a representative from the company?
2. Have you ever done channel checks with Dixie vendors, Phytosphere vendors or any of the entities related to MJNA in an effort to better understand revenues?
3. Have you ever done a site visit to any Dixie vendors or other interests of MJNA to view products?
4. Have you ever conducted interviews with federal or state government officials regarding the official positions on marijuana?
5. Have you ever conducted interviews with patients or users of MMJ, CBD products distributed my MJNA and their interests, especially customers who regularly use their products?
That is just a start but having admittedly only been following MJNA and MMJ since February 2013, I would like to hear what qualifies you to cast such aspersions against the the company and the industry. Saying you know fraud when you see it doesn't cut it because I could say the same about you and I have heard people call Apple a fraud since I first invested in 2005.
Alan if you are wrong
You have outright called MJNA a fraud, as has Ashraf. Effectually, by calling the report a fraud, you have also implicated Mr. Imbimbo and Mr. Corrigan who presented and signed off on the report.
Hopefully iHub won't delete this message because it is neither a personal attack nor is it unrelated to MJNA. I have had several posts deleted recently for being "off topic" yet MJNA was mentioned no less than twice in every paragraph I put forth.
I come from a family of lawyers who will be the first to admit proving fraud and libel is not as easy as everyone may think, but here is my take:
1. There are plenty of lawyers willing to bill for not only looking into possible libelous or slanderous insinuations by you and Ashraf, but also for aggressively pursuing legal options. It really is a matter if the officers of MJNA want to commit time and money to pursue said options and of course, like you say, provided they are not guilty of the accusations you have made.
2. Infatalis is undoubtedly in potentially serious legal jeopardy. He disclosed he had financial interest in a negative response to his article, the same article which erroneously labeled Michelle Sides as a convicted criminal, potentially resulting in a selloff of the stock. Not only is that a clear cut case of slander against Ms. Sides, but he could be found libel for potential damages to her reputation as well as the Company's.
3. If shareholders could get their act together, there are also plenty of grounds to bring suit against Seeking Alpha for publishing slanderous information. Considering SA supposedly edits articles, they should have fact checked before. In fact, should Michelle or MJNA bring a successful suit against any of the aforementioned characters, I would definitely expect a shareholder suit to follow
Thanks Doc K and TStarr
Gentlemen,
Doc, that was great information you shared via PM. It directly addressed my concerns of which have been addressed with IR but unrequited.
TStarr I wish I could PM but I don't have a subscription and alas cannot. Maybe I will eventually get one, but as my posts continue to get removed, especially the rebuttals to Ashraf, so I doubt I'd pay money for an account with that happening.
Here is my brief analysis of the CA medical marijuana market. I'd much rather do this via PM but the cats already out of the bag.
I heard recently that LA is thinking of passing some restrictive measures regarding the amount of shops the city can have. It was a 3 part measure and 1 of 3 measures would be passed; the first part would limit the amount of shops to 153, and I don't really remember the limits of part 2 and 3. The CA medical market is in its adolescence. Back in 2003, everyone was amazed by my medical card, now everyone has a card. There is plenty of demand and there is just as much supply.
Brands are popping up everywhere, "Hubby Bars", "Tainted Goods"....The brands are popular but they are not very professional as many of them are made in people's homes. This leads to one of the big questions regarding the Health Department as many of the edibles are not created in sanitary environments. Unfortunately, Dixie's brand is not present in any of the dispensaries I frequent. I have asked 2 shop owners about Dixie and while they had "heard" of it, they have had other patients ask about the brand.
Thanks TStarr
I realize my frankness can be off putting but know this;
I am an "investor" in this company. I have paid my shares off and I'd like to see it skyrocket. I am also a shareholder in several other MJ equities which are all paid for, CBIS last March during the run from.01-.21 and ERBB on the recent run to .019.
While I'd like to see it shoot the moon, I also know stocks/markets pretty well and understand the fundamental metrics that make billion $ market caps. I use technical analysis for short term trades and fundamental analysis for long term investing.
I also know hack frauds when I see them because I have relatives who write for major publications and I work in a creative field. I know PR and
Most important, I have almost 2 decades of experience with cannabis, from cultivation to distribution to consumption. I have friends dying from cancer who use it to relieve pain and stress. I also have friends who use it daily to manage migraines, stress, hyperactivity, sleeplessness.....or just to help assit creatively, or make a movie more enjoyable....and I have my own reasons as a medical patient in CA since 2003.
I'm a pretty regular dude, just like you.
I shorted at .45 because it went parabolic
The gains were not sustainable. It has nothing to do with confidence. I short A*PL all the time, shorting the equity and call options. I typically don't buy puts, and more often short them for good entry points, It has nothing to do with faith but it was hedging.
And the borrowing of shares was a nightmare. I have a large position in my ETrade trading account which is paid for in cash but they wouldn't let me borrow against it to short so I had to transfer it to my Merrill account because my broker there is a close friend/old boss. I got plenty of sh*t from him until he saw my cost basis.
What "Professional" Analysis
So you finally admit that you have never once called management to discuss the validity of the business? That's some hard hitting "journalism" there! I would think as an "author" researchinging a subject, your first order of business would be to call the very business you are writing about. See real authors, such as those who write for Fortune or Fast Company actually meet with company representatives before releasing no less than 5 articles about the company in barely over a month.
And it is not MJNA's responsibility to prove you wrong, just as it is not worth Apples time to answer every article about supply chain problems, product shortages or suicidal employees at factories they share with 5 other electronics manufacturers.
You and Alan are some real virtual Woodward and Bersteins, investigating from your computers without actually reaching out to gather evidence from the source, the very subject of your article, MJNA. Yet another example of how awful the state of jounprnalism is in this world.
Managements Stumbles
Last week, I aired these concerns via email with management and IR with no response as of yet. I will follow up with a phone call next week.
1. Failed to provide clarity on the $4.5m stock grant from CANV acquisition of Phytosphere, listed as $4.5m under the revenue portion of the earnings report. Technically, CANV shares are NOT income as the profits are not realized until the shares are sold. CANV is illiquid, trading 300 shares per day, therefore it is impossible to sell $4.5 worth of CANV on the open market, meaning the revenues have not been booked. At this time, the $4.5m should likely be listed as assets, not income.
2. Failed to respond to outright allegations of fraud. The SA articles have labeled MMI, management, directors, lawyers, and auditors as frauds for their reporting of the items above. To quote Ashraf directly in one of his replies to another SA author, "Perry, your website attempting to pump the stock will not blind the world to the obvious fraud that MJNA is trying to pull." Those are NOT mixed words and are a direct accusation.
Management has failed to address these two key issues, completely eroding shareholder confidence. My initial impression of MJNA was that this company was wisely entering the cannabis industry by positioning itself as an umbrella company licensing out goods and services. At this point in time, I don't see MJNA as a fraud, but they are appearing incompetent as to running a publicly traded company.
If there is no significant, credible and actionable measures taken by MJNA, I will be dumping the 100,000 shares I purchased at .18 along with my original holdings with a basis of .03.
Don't Start Calling Bottoms Yet
The past few weeks, we've heard it all, bottoms, support, yadda, yadda......32, 30, .28, .25. .21......
.18 is where it was headed and it was in the charts after the 2nd failed attempt at .50 due to a gap and the parabolic movement at .18. The 66% Fibonacci retracement is at .18 and the parabolic rise was unsustainable minus any fundamental anomaly. My confirmation of the .18 target was on March 29 when MJNA was at .25 after the intraday trading put up a bearish engulfing candlestick on the chart. I don't think much of TA but there are a occasionally indicators like the gap at .18, followed by the candlestick, it was inevitable .It's kind of weird that a penny stock is moving so technically sufficient, but that is the first step to being a high volume, liquid equity.
I nibbled here and there with the occasiional short position. Let me tell you shorting this stock is a grand waste of time. ETrade wouldn't allow me to short despite having a a large share position to borrow against and the highest margin stauts meaning I can sell uncovered calls and short stocks that I don't own (ETrade covers the borrowing of shares shorted). I had to go through my broker at Merrill Lynch (former boss during my internship and long time friend) where the firm required me to transfer the shares because the firm would not borrow, nor did they own the MJNA shares to short on my behalf. Here's the kicker, my broker stated that ML had restrictions that do not allow the firm to purchase equity in marijuana related businesses. He couldn't say if the firm was ready to invest capital in the future pending legalization but he said he would not be surprised if dark pools were doing buying on their behalf. Needless to say, I got my balls busted for playing a penny stock, paid a premium to short it through my broker ($125 in and out of trade, not bad but more the $15 with ETrade), and I made the recent drop more digestible.
This week there was strong support with high volume at .18, signaling capitulation. Despite my bullish disposition I don't dare call the upside potential in share price. There are far too many factors at play. I would expect a slight technical bounce off the 200EMA and back to a normal std dev, aka Bollinger range but if the 200EMA fails, .09 is the next number to watch out for since it was the latest support before popping to .18 then skyrocketing to .50. Sure its way oversold but when there are unanswered charges of fraud against a company, those indicators are meaningless. I added to my position like I said I would $18,000, or 100k @.18, I have another $18,000 I'm willing to commit but will hold off in case we see .09
I'd much rather miss out on the chance to get extra shares at .09 and just see the stock go to $1 but I'm in no hurry and I got some cash to spend.
You need a JD in BS to interpret
So basically Congress is setting up a committee that will discuss MJ and in a year present a report. All that time and manpower wasted for a bureaucratic committee to ponder national policy on MJ. The formal committee just paints targets on which Senators and Reps to lobby for anti-MJ causes that draw revenue from MJ prohibition, such as prisons, police, DEA.....
Meanwhile the cannabis industry spreads like a weed, springing up in new state after new state. Hopefully this issue can be handled civilly, perhaps even without having to reach the highest court.
ENOUGH Already
I went ahead and pulled all the legally questionable statements the SA tag team has written about MJNA, statements where they make clear, undeniable claims of fraud from MJNA. I forwarded several pages on to Stuart Smith, Michelle's and my lawyer as well.
It is one thing to make opinionated statements regarding a company, but it is another thing when these statements are made as if factual and then published in a public forum where the author is paid. That is when it is borderline illegal and slander, libel come into play
420Investor Mites Appear Indoor Too
Even if you grow indoor from seed those little buggers still appear, hydro, soil, aero......I find insect soap was always useful.
Good Read re Colorado Legalization
http://www.aspentimes.com/article/20130425/NEWS/130429901/1077&ParentProfile=1058
Boom! Done! KO for iamblackbeltman
An excellent point by point rebuttal!
These guys are Internet sleuths who ONLY do their investigative reporting through a web search. I seriously doubt either of them have ever visited with a director of MJNA, much less done a channel check at one of the 500 outlets in CO that sell Dixie products.
MJNA really needs to respond because the company, it's directors, auditors and lawyers are being calls frauds.
Technical Bounce Off .18
I'll be lucky if this post stays up for more than 30 seconds as my past few rants have been deleted almost immediately.
This is a clean technical bounce off the 200EMA. Not much more. The volume is increasing, the selloff here hasn't been too steep and this is how support is built contrary to the endless calls of technical support at .32, .30, .29, .25, .23.........And yes, I got my 100,000 @.18, and will still buy at .09 should it arrive. Devoid of any catalysts, I would not be surprised if MJNA continues to drip lower throughout the year, as that seems to be the annual pattern with MJ stocks.
This has nothing to do with the ridiculous SA articles from the the bulldog and his lapdog partner. Their opinions regarding financials (opinions that have now been repeatedly beat to death with no new info over 5 articles now) are irrelevant because it is ultimately the SEC's reaction that matters. I have repeatedly stated I am more inclined to believe the Company, the lawyers and the auditors than hack "authors" because the latter has no financial or legal obligation to be compliant. The only thing that disappoints me is MJNA's, as well as Mr. Imbimbo's and Mr. Corrigan's lack of response to some of these articles. They are outright being called frauds and there are several potentially libelous claims, yet nothing seems to be done. Spend some of those profits and file some paperwork to SA and the other monkeys.
Future Events to Watch For
May 15 or sooner MJNA is supposed to provide the full year audited financials. This is a good step towards uplisting off the pinks.
AG Holder or the government making an official response regarding cannabis.
End of 2013 Colorado must put in place laws regulating Amendment 64, allowing for recreational use statewide.
2014 is an election year. It is very possible that money begins to pour into marijuana legalization on federal and state levels. For that to happen, over the next year and a half, there will be a lot of exposure for marijuana. George Soros and Peter Lewis (Progressive Insurance CEO/founder) poured millions into recreational legalization in CA when it was last on the ballot in 2010. Ironically it was the medical MJ movement that lobbied the hardest against recreational legalization because it would loosen the firm grip they have on the market.
Time will tell if MJNA is a good investment, not a SA "author", not me, not you.
$10 per 1000 views
Bottom line:
Do you trust management, lawyers, accountants who not only have personal, professional, and financial motives to report accurately, but they have a legal obligation to do so?
Or
Do you trust a hack writer making chump change for their keystrokes and has no financial or legal responsibility to perform in a credible manner?