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The Interesting Thing to Me
is that this request was made in the first place. MJNA was asking for an injunction to:
Yep, and I'm in four of them.
But there is only one "Official" corporate group and it has less than 1,120 members. The only numbers you need to pay attention to are HempMedsPx sales numbers and I promise you that no matter how weak those numbers are from Q2 the Q3 numbers will be worse.
But with MJNA's filing history we might need to wait a long ass time before they admit this.
The Kannaway Corporate Facebook Group
As of today has 1,116 members. I'm willing to admit that not every active Kannaway B.A. is on facebook (but most are) but I will also point out that not every B.A. who is active on facebook cancels their membership in the private group when they stop paying their monthlies.
Track that with Alexa and Google Trends numbers and you will see a past it's sell by date opportunity. Please note the Q2/14 sales numbers didn't exactly turn the world on it's ear and the Q3 numbers will be a fraction of Q2.
Kannaway is not dead but they are close to Monty Python Parrot Sketch territory. Can they be turned around? Not as long as the only thing they keep trying to do is the exact same things that got them where they are today.
You Could Be Right, You Could Be Wrong
but unless you can show us where MJNA has reached an agreement with another CBD supplier or has begun producing their own they are still dependent on a company they are almost at war with to provide all the products they sell.
This is not speculation.
And until this situation changes I can't see good things of the share price.
And BTW, I laughed my ass off when the report claimed Kannaway has 50K active affiliates. They're only exaggerating that number by a factor of 25 to 50.
What Ever You're Smoking Didn't Come From MJNA
They don't sell the fun stuff.
Fact: MJNA are suing and being sued by their primary CBD Oil supplier. Before Doc K jumps my butt on this I acknowledge that Cannavest is not mentioned by name in these suits but almost all the primary stakeholders in CANV are involved.
Suing and being sewed by your primary product supplier is not being "11 steps ahead" in a chess game. Telling your shareholders you lined up a new source of CBD Hemp Oil and no longer are under the thumb of the people suing/being sewed by you would sorta be like a good next chess move only MJNA was NOT able to report that.
For as much of CANV's products as they sold last quarter they did so at a net loss and that's before factoring in the fact that they no longer have a preferential pricing agreement in place with the people who sell them the CBD Oil they sell to everyone else.
So please, tell me what you think Michelle and/or MJNA is doing which puts them "11 steps ahead with no shortage of options in case the inevitable happens"? Their Q2/14 report didn't mention a SINGLE option, perhaps you could be so kind as to tell me what the other 10 are?
It isn't Just the Numbers
and I agree, if the numbers would make them look good the report would have been out more than a month ago. But there are more pressing questions MJNA is holding silent about.
Up until last month MJNA's HempMeds division held a master distributorship contract with Cannavest. All of the "Award Winning CBD Rich Hemp Oil(TM)" that HempMeds/MJNA has ever sold was first sold to them by Cannavest. In the copious flow of press releases MJNA has been trying to fill the void of silence that their failure to file created, Hempmeds is repeatedly referred to as a "Master Distributor" but not for Cannavest but rather for MJNA.
HempMeds is still selling Cibdex, RSHO and other Cannavest products but they have not disclosed if all they are doing is running through previously purchased inventory or if they are still buying from Cannavest albeit under less favorable financial terms. They're now selling doggie treats but they have issued no formal statement as to where the CBD in the new aNew product line come from.
This is not a small question. Last we knew MJNA did not produce their own CBD oil, they buy it from someone else. The folks they used to buy it from are no longer favorably disposed to MJNA (yes the lawsuits don't mention CANV by name, only almost all of their major stakeholders). Does MJNA have a new CBD supplier? If so, who are they? And have any tests of the new oil been made public?
Hard to say, they're more than a month late with filing their quarterlies and none of their press releases has broached these topics.
Sure There's a Penalty for Late Filing
The stock price was north of .15 prior to their failure to file and it's south of .13 today. And that's without knowing what the report (when it's filed) will say.
Just as an aside Doc but do you remember when you used to be able to, with some honest claim to pride say that at least this wasn't the type of company that streamed out self promotional press releases to try to paper over their other failings? The more things change the less they stay the same. And a lot has changed since Q1/14.
Completely ludicrous and frankly ridiculous rumors of "Up Listing" aside MJNA is not required to file reports. But their failure to voluntarily do so is a distinct lack of endorsement which is reflected in the market place. The real question isn't "when will they file" it's "what will they say when they do file."
Call me a cynic (I've been called worse) but if the report is going to say good things about them they wouldn't have waited more than a full month past the time their extension to file gave them to get that good news out to their investors.
Good Analysis of Wake Up Now
Len Clements is about as Pro-MLM as anyone so what he writes can't be dismissed as (yet another) industry basher. He seems less than enthused with Wake Up Now:
http://www.insidenm.com/articles/inside-wake-up-now/
Honest Question
Where is this coming from?
Just Going by What the Article Says
It claims the price per mg of CBD in the Charlotte’s Web Hemp Oil is 5 cents. Compare that to HempMeds least expensive product, 1,500 mg of CBD for $439 or about 29 cents per mg. So yea, close to 1/6th the price.
Perhaps a Larger Point Being
that once the regulatory hurdles have been navigated CBD oil production from industrial hemp paste (the MJNA model) will be at a crippling economic disadvantage to their soon to be legalized competitors. Federal legalization is coming and it will erase the market niche MJNA operates in.
The question then becomes, do you believe MJNA is a well enough run company to transition with the changing marketplace and prosper against a growing number of competitors in what will be a very lucrative (post legalization) CBD market?
You're Talking About a 2004 Court Decision
I'm talking about the farm bill passed into law in 2014.
Times change.
The is No Doubt that is an Activist Move, loudly and deliberately marching into a potential regulatory issue. That is why the Stanley's are (for now) only selling to people on their list and I ~think~ that if they get their "test case" they would prefer it to be in a medical MJ state. My point is that they can win and generate a lot of brand recognition in the process.
As to your .3% question, I don't have tons of time this morning but I did find one supporting cite:
It is a Gamble, But a Winnable One
First off, the Charlotte’s Web Hemp Oil has significantly less THC than RSHO. It's under the .3% threshold for hemp based food products while RSHO has been tested at 1+%. So yes, we're are in a gray area but so is RSHO.
But you also have to look at the optics. Imagine a news story, a kid with debilitating epilepsy in Wisconsin, the kid's mom imports an effective treatment from a company in Colorado. A treatment with a level of THC so low that the product would be legal if it was classed as a food, but the local cops or the state AG is wasting tax payer money on prosecuting the family for illegal drugs.
Yes that could happen but I doubt it would happen much more than once.
To me the important thing here is that they are selling the Charlotte’s Web Oil for almost 1/6th of the price (per MG of CBD) that HempMeds is selling theirs for. And I've seen "cannabis for the cure" type activists complain that even at that price they think people are being over charged.
No But they Are getting Sued
by a major CANV shareholder and in exchange are counter suing ~just about~ every significant stake holder in Cannavest. In a sperate suit Cannavest is suing one of if not the largest customers HempMeds has (General Hemp/Kannaway). But no, Cannavest is not suing MJNA (directly).
I know Doc knows this but for those following along at home all of the "Award Winning" CBD Rich Hemp Oil(TM) that MJNA and HempMeds has ever sold came from Cannavest. The contract that gave MJNA/HempMeds preferential pricing and a Master Distributorship on Cannavest's CBD Oil was terminated last month by Cannavest.
HempMeds has announced new products but they have not announced where they will be getting their CBD oil from.
Bit of a leap
I see some common sourcing and concepts between the aNew line and Kannaway products (Kannway has Chinese Bi-Bong herbals, Hempmeds has Korean Boyak herbals) but it isn't all that easy to gain momentum with a new MLM.
The leadership behind Kannaway are not "Top Shelf" MLM field leaders but they do have track records. They hired Troy Dooly as a consultant and while his star has started to dim he is still a bankable personality in the industry. But if MJNA/HepMeds tried to start Kannaway 2.0 (or Hemp Network 3.0) that would be stabbing Kannaway et al in the back and it would garner a lot of negative coverage in the MLM industry.
But I do see where you're coming from as to the ad hoc/hackneyed product offering. And it does look like a MLM job but that's because too many MLM companies are started by people who just wish to sit at the apex of their own pyramid and once they have a partnership in place are left to scramble out there and try to find something to sell as a product. Last month HempMeds was the Master distributor for Cannavest, today they are the exclusive Master Distributor for MJNA. Looks like MJNA did the same sort of "Me Too" Alibaba dot com white label license product search more typical of crappy MLMs than leaders in a product category revolution.
Massive Dilution
Read the stickies.
It Would Be Very Interesting
to know if HempMeds is or is not still using Cannavest CBD oil and if not, where are they getting it?
It's Probably Close to Nothing
Mr. Beard lost a UDRP (Uniform Domain-Name Dispute-Resolution Policy) hearing to Kannaway (link). He registered Kanaway (count the n's) .org and .info and went on to "attempt() to sell the disputed domain names to Complainant for commercial gain."
It's been a while since I've read Kannaway's distributor agreement but I know you're not allowed to use "Kannaway" or even "KWay" in a domain registration but that's the sort of issue that usually gets you a nastygram from the compliance department not a lawsuit. I didn't look all that close but Mr. Beard dosent really have a MLM background but does look a wee bit slippery. He registered those domains in March and was trying to sell them by June, a whole lot of "Hemp Lifestyle" lemmings went over the cliff in that time frame, perhaps Mark was just a bit more disaffected than most. The good news for Mr. Beard is that if there is anything more to Kannaway's lawsuit against him, it may be a moot point by next years trail date. Kannaway is about 50/50 to being alive by then.
It's Interesting that They'd Mention
a trademark they neither own nor likely have permission to use.
Sure it Can
Peter Woodward and Michael Llamas were charged in the Loomis deal but they were also listed as founders in North American Companies (comma) LLC. Now North American was not named in the indictment but search that company name in conjunction to Llamas shows no shortage of consumer complaints.
And who was listed as a VP and corporate counsel for North American Companies? None other than Michelle Sides.
Is the Comma Part of the Name?
Every company mentioned in the complaint is styled with a comma, even Cannavest, a Delaware Company. But hey, if there is a difference between "Kannaway" and "Kannaway," then maybe the one with the comma isn't the malodorous dumpster fire that "Kannaway" is.
My point on the California General Hemp (,?) registration is that Michael Llamas is most defiantly involved. Something that has to this point been repeatedly denied.
The California Reregistration for General Hemp
Link to the Cannavest Complaint
Had a friend dropbox it me. Anyone interested can read it here:
https://www.dropbox.com/s/ewisej6jh8jqdjr/CANVvKWay1.pdf?dl=0
That or Mr. Llamas is Other than Honest
The Argument Made in the Complaint
Mentions 15 USC 1060 (a)(4)
Looks like the KWay License
was signed on February 27th and the sale of the TM to Cannavest came on March 12th. Less than two weeks later. At that time it's hard to claim that CANV "should have known, it's more like Micheal Llamas should have told them.
Llamas is the one at fault here. Kannaway was operating under a good faith belief that they had a license to use the Trademark. Unless Llamas can prove that he disclosed the Kannaway license at time of sale then Cannavest would seem to have a solid claim here.
Oh, one interesting nugget from the complaint. Llamas signed the license agreement between HDCC, General Hemp and Kannaway not only as the managing member of HDCC he also signed the agreement as a managing member of General Hemp. Yet one week later a press release claimed that Stuart Titus was the "sole owner" of General Hemp.
Well, on February 27th Micheal Llamas had the authority to sign contracts for General Hemp. I wonder if that soon to be convicted felon is still part owner of Kannaway?
I Read the Complaint
It is pretty much a trademark issue over Cannabis Beauty Defined. Micheal Llamas licensed the name to Kannaway then two weeks later sold the TM to Cannavest. Cannavest is claiming to not have known about the license at the time of the sale.
The lawsuit reeks of bad blood. I find it hard to believe that Cannavest did not know Kannaway was using the mark prior to sending legal notice on July 30th. Kannaway did not formally reply until after another demand was issued and did so on August 18th.
Given the timeline (after the Roen v MJNA suit and countersuits and the revocation of the HempMeds contract) it's hard to see this as anything other than another flair up in the very real war between MJNA et al v. CANV et al.
Cannavest is asking, in addition to KWay stopping the use of the trademarks, for "not less than" $100K in damages, treble damages and all legal expenses.
Now we know why Kannaway introduced a new skin care line which largely duplicates the Cannabis beauty Defined line.
Thanks for the catch Doc
Teach me to post late on Saturdays.
Rev!ve
The Ingredients tab reads:
Oh yeah, PR in PR
They did get some press coverage on the island but demographically speaking I don't see Puerto Rico being a growth market for fairy sprinkles of CBD in over priced products.
No prices are yet posted for the new Kannactive skin care line. Looks like we might have to wait till October 1st for that. Kinda annoying, I had to track down an active Kannaway affiliate link to get the price list and it's getting harder by the day to find active Kannaway affiliate links.
The whole Puerto Rico strategy is misguided, it only treats a symptom and not the disease. Unless they recruit an actual downline on the island the average KWay affiliate will not see a dime from sales made there. And that is the real problem, the average affiliates are losing, not making money.
But the top level "leaders" are getting the new Puerto Rican leader teams slotted under them. This does serve a purpose. Billy Funk for example is one of the "face time" people in Kannaway videos. He isn't exactly lining up his "Plan B" MLM company, he's high enough up the food chain that Kannaway might enforce the non compete clause in his contract if he left inartfully. No, but he and two other semi former Kannaway leaders are flogging "Limitless Marketing Movement" which arguably isn't a MLM program which sells MLM and marketing training. Functionally it still amounts to an income stream to supplement (or potentially replace) his Kannaway involvement but if he's smart he's sticking to an affiliate model instead of MLM so it would be harder (and more expensive) for KWay to slap him with that non compete. But, if they stick an up and coming Puerto Rican recruiter into Billy Funk's downline then he has less of a reason to want to leave. And if Billy left, 20 to 50 people leave with him so there's a reason to keep him around.
For the record I have no direct information indicating Billy is getting his downline fluffed, again I'm just using him as an example. But this is how off shore expansion in MLM works. The best I can say is it seldom hurts the rank and file domestic affiliate but it sure as heck doesn't help them either.
Kannaway, want to help the rank and file members? First off when you do one of these high profile events don't charge the affiliates for the live stream. Not only let them watch it for free set up back office links so they can view it on demand. Let them, hell encourage the field force to use those videos as a recruiting tool.
[Minor point of humor: They cut the price of the Puerto Rico livestream down to $19.95 which is far less than their previous events. Bowing to market pressures. And yesterday, a day before the event, they dropped the price to $4.95. They didn't do that because too many people ordered the steam.]
But the real way to fix Kannaway (if such a thing is still possible) is to find retail value in their price points. The comp plan is all about signing up new brand ambassadors and incentivizing them to buy the most expensive product pack available. Now that works great (for a while) to the people on the crest of the wave but all the people underneath them drown. If Kannaway actually had retail value to the point where an affiliate could make money (after expenses) by selling products to people outside the comp plan then thy would have something they do not have today. Sustainability.
I Don't Think of it as Disagreement
Your (admitted) speculation is fascinating. It fits the facts we have on hand, my only point is we may not have one or more significant pieces to this puzzle yet.
You frame the commonalities well. Cannavest is not a party, that eliminates a great number of potential causes of action. Roen initiated the first suit and MJNA counter sues naming not only Roen but almost every other significant stake holder in CANV. The fact that the one thing they all hold in common is substantial amounts of CANV stock becomes the single best guess as to the underlying cause of the dispute.
If that assumption proves to be warranted (and again, it fits the facts we have) then you're in a far better position to interpret potential motives from than I am. The only "not quite sure how that fits" aspect for me is that MJNA either has (had) legal right to dispose of their CANV shares or they didn't.
I'm the first to recognize that sometimes parties enter into lawsuits for stupid reasons. I was delighted last year when two groups of internet ponzi schemers who once collaborated, later competed wound up suing each other. In the midst of a civil complaint one side accuses the other of running an illegal scheme only for the other side to point out that the person raising the allegation, when both parties worked together, was the one who designed that scheme in the first place. Comedy gold.
I'm not in any way insinuating anything that untoward is going on between Roen and MJNA but I am waiting for a few more puzzle pieces to fall into place before guessing what the picture looks like. If however your speculation proves to be correct Det, my already considerable respect for you will most justifiably increase.
Retail Site Found
Just a followup to my last comment, CANV is working on their own direct to customer retail website:
http://www.pluscbdproducts.com/
Still not up and running but a work definitely in progress.
And while not yet built, the have also reserved:
http://www.pluscbdvape.com/
MJNA has a competitor.
Find Myself Pretty Much Agreeing with Doc
There just isn't enough info here to begin to speculate. The fact that Roen is the original moving party would seem to be significant but absent either the documents or other information it's hard to say of what.
From the docket report MJNA was served with the initial complaint on June 25th. Their still to be filed Q2 report covers up to June 30th. Would they be obliged to disclose this contingency whenever they do get around filing?
I noticed that Cannavest has their PlusCBDOil website up and running. For the moment at least it looks more B2B than consumer related, you can buy CBD oil by the kilogram. That isn't going to replace HempMeds sales anytime soon. I haven't really been looking, perhaps they are working on a separate retail platform.
But it's starting to look like the sale of CANV products that Hempmeds was (is) providing just might be the only value MJNA provides to CANV. Between the contract termination and now the lawsuits which do not include Cannavest but only in a narrow legal sense but do involve almost all of CANV's majority share holders, MJNA might be CANV's least favored customer.
I wonder if it will be easier for CANV to replace MJNA as a customer than it will be for MJNA to replace CANV as a supplier.
Perhaps not MJNA v. CANV Per-say
But look at the list of third party defendants.
*Bart Mackay: Director at CANV
*Mai Dun Limited LLC: Basically Bart again and along with Mercia Holdings and General Hemp pretty much the partnership that bought Foreclosure Solutions Inc which went on to become Cannavest.
*Mercia Holdings LLC: Bart Again and see above.
*Mik-Nik Trust: Pretty much Mike Mona III and likely his sister.
*Mike Mona Jr. and III
It is true that Cannavest is not listed but between the shares held by the people and entities that are, we are pretty much talking about the controlling interest in CANV.
I share Doc K's lament that the case files aren't readily available. These suits could significantly alter the landscape for both companies.
More "Old" News
If you hadn't seen it yet:
http://www.forbes.com/sites/nathanvardi/2014/03/26/high-times-inside-the-pot-stock-bubble/
Yea, But there's Really No Reason for That
MJNA has nothing to do with MJ and if pot were legal on a federal level tomorrow MJNA wouldn't just be competing with penny pot stocks, they'd be face to face with Monsanto level companies.
MJNA (HempMeds) lost their exclusive relationship with Cannavest. It ~seems~ they ~might have~ lined up an alternative CBD supplier but no word (at all) who that might be.
Closing in on a month past the date their Q2/14 filings were due ask a question. If those reports have glowing things to say about the bottom line do you think they might have been published already?
The Guy Raises Some Common Complaints.
But he also gets some facts wrong, the price of Kannakick for example. Some people have a hard time speaking extemporaneously but I get the feeling he isn't the sharpest tool in the shed.
I'm not sure if I believe Kannaway products were the reason for his failed drug test. The cheap and dirty tests can show positive from enough CBD but I doubt Kannaway products have enough CBD in them to make that happen. Also, he (kinda) described his failed test in terms of a random test for a job he already had. If it had been me I'd have taken the products to show the HR person who told me of the failed test and asked to be retested with a better screening tool. Unless it was a legit result and he's just using Kannaway as an excuse for his own consumption.
But his complaints about the comp plan are valid. The core focus is on purchasing your way to bonuses and that's financial suicide for 90+% of participants.
He's also right about mid to high level affiliates cross recruiting for other companies. They see what's going on and are already building "Plan B." It's sorta cute that he complains about cross recruiting while pitching another company, and not a good one at that.