Medical Marijuana Inc (MJNA)

[GDorn]

Maybe the 42% Increase

in Kannaway's sales were over the same period in the previous year.


It is somewhat difficult to get accurate information on MLM company sales, very few are publicly traded and MLM is the very definition of a "fake it till you make it" industry. The closest thing we have to any sort of real numbers on Kannaway come from the laughable Houlihan Capital fairness opinion. First off the document makes it clear that all the numbers contained in it were provided by Kannaway/MJNA and that Houlihan made no effort on their part to audit or authenticate them and even still, the numbers are far from good.

Page 25 lists $420,720 as the 2014 EBITDA (420 Yay). Page 15 has an incomplete monthly income statement which indicates that Kannaway has been bleeding money since July. That chart doesn't include the months of November or December but when you add up the revenue numbers Kannaway seems to have lost about $40K more by year end.

The only substantial point mentioned in the report that could even begin to justify it's irrational exuberance was that "two individuals" were being added to the Kannaway sales team who were expected to bring with them a "combined sales network of approximately 85,000 people." I know who one of those "individuals" is, Robert Dean and a bunch of years ago he was a very heavy hitter but he's gone on a serial MLM ship jumping spree that has destroyed almost all of his credibility and sales network. He has also been almost completely absent from Kannaway's promotional media which is pretty much the exact opposite of what would be happening if he was performing as expected.

One last note, we don't know the actual supply chain details here, did Kannaway buy raw materials from HempMeds and formulate their own products or did MJNA sell them finished products for retail? More of an accounting issue than anything at this point but if it's the latter it means that most of the profits to be realized were already on MJNA/HepMeds balance sheet and the Kannaway purchase will add very little, if any additional profits to MJNA's share holders.