Medical Marijuana Inc (MJNA)

[GDorn]

Cannavest v Kannaway Lawsuit Update

I didn't have time previously to give this the attention this deserves but things have gotten uglier between MJNA and the company that produces every single drop of award winning CBD Rich Hemp Oil™ MJNA has ever sold.

To back up for a bit, here is Cannavest's First Amended Complaint against Kannaway/Micheal Llamas/General Hemp/HDDC:

CNAV v Kannaway FAC

Here is Kannaway/Micheal Llamas/General Hemp/HDDC's motion to dismiss:

Mot to Dismiss

And the court's dismissal of the above:

Motion Denied

OK, that brings us up to this week where there was something of a flurry of filings. Perhaps the most interesting is Kannaway/Llamas et al's Counterclaim against Cannavest:

Counterclaim

In which we learn that Micheals Llamas and Mona used to be the very bestest of friends, Mona is Llamas' only child's GodFather which is appropriate because Mona is a violent man who hangs out with organized crime figures (presumably besides Llamas). Llamas is claiming the transfer of the Cannabis Beauty Defined trademark was done under threat and duress and that Mona didn't even pay him the dollar he was promised:



I find it interesting that Llamas states that if Cannavest stops selling MJNA hemp oil they'll go out of business in a counterclaim in a lawsuit against Cannavest. Yea, that's a real healthy business relationship right there.



Mona the Second is a Badd Mann.™ If the victims of Llamas' (alleged) frauds will cry him a river over the abuse he's suffered is not yet known. I can't speak the the factual basis of the counterclaim, that's for a court to decide but it looks very much like MJNA needs to find someone else to sell them Hemp Oil if they haven't already.

Next we have the Declaration of Michelle Sides in which we find out that she is a "Principle" in Kannaway and that Kannaway is worth like eleventy billion dollars (my exaggeration is smaller than hers). The best laugh line (and there is competition for the title) is that if the Cannabis Beauty Defined trademark isn't returned Kannaway's value will be diminished and that Micheal llamas may no longer be willing to let MJNA shareholders pay him for it. Also of note, Michelle claims Kannaway's Cannabis Beauty Defined products are selling like hotcakes but she also claims they have almost six months worth of inventory sitting on a shelf somewhere.

The following is an exhibit in support of Michelle's declaration [Link] The fact that a document like this, not only completely unaudited but also horribly formatted is being submitted to the court should be less than encouraging for the MJNA faithful but it's contents, in so far as they can be discerned and credited are less encouraging still. It purports to be an accounting of all Cannibis Beauty Defined product sales to the 16th of this month.

Some people have doubted me when I've tried to convey just how few tumble weeds are left in Kannaway's ghost town but now i have some sales numbers to back me up. MJNA is claiming (or pretending) to have sold $3.6 million in Cannabis Beauty Defined products to date but look at their holiday sales results:



Again the formatting sucks, blame Michelle not me. "Green Friday" was Kannaway's post Thanksgiving "Black Friday" event and were offering deep discounts on a product pack at a $199 retail price point and at almost $1.5K in total sales they really didn't blow the doors off but in fairness that came right on the heels of the Thanksgiving day sale when they sold 24 bottles of salve. I can't find the retail price point for the special "Holiday Packs" but from early November when they went on sale up to Christmas they sold $4.4K in "For Her" packs and $0 "For Him" (and I thought they were going to have a hard time selling expensive face cream to guys). These were their special holiday promotions in addition to their normal product sales and please be clear that all of their holiday sales combined for a little bit less than nine grand (!!!!!).

Next up we have the Houlihan Capitol's Strictly Private and Confidential don't show this to anyone or they'll know what a joke it is and don't forget you can file documents to the court under seal "Fairness Opinion" . They do make it clear however what information they were relying on the make their determination:



Of course Cannavest has responded to the above [Link] The issue being argued is amount of bond to be posted by Cannavest to compensate Kannaway in the event a preliminary injunction is granted and they were later to lose the lawsuit. CANV (big surprise) disputes Kannaway's facts and figures, Kannaway asks for a $30 million dollar bond, Cannavest suggests ten grand.

Some interesting reading, a few declarations supporting Cannavest's arguments:
Joseph Dowling
Phillip Samouris
Objections the Michelle's evidence


This, all of this is a very messy public divorce between two rather seedy companies and it's getting into scorched earth territory. MJNA is and will be spending a lot of time and money prosecuting and defending this and it's other lawsuits. As important until MJNA discloses they they found someone else to sell them CBD oil please remember they are trying to destroy the company who is trying to destroy them (and who sells them CBD oil).

Last but certianly not least Micheal Llamas/General Hemp is trying to sell Kannaway to MJNA's shareholders (bag holders?) for $80 million dollars in sock (common shares sold at a 25% discount). Kannaway isn't worth ANYTHING near that amount but Llamas has his frauud trial next month and may need money. Also, if Cannavest prevails in the trademark suit Llamas would be on the hook for perhaps half of the judgement, unless he can get MJNA to buy Kannaway from him first.