***** Medical Marijuana Inc. and AXIM Biotechnologies
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If I were to choose two marijuana stocks right off the bat that I'd rather watch from the sidelines and never buy, it'd be medical cannabis company Medical Marijuana Inc. (NASDAQOTH:MJNA) and cannabinoid-based drug developer AXIM Biotechnologies (NASDAQOTH:AXIM). The reason they're listed together is because Medical Marijuana Inc. owns 22.67 million shares of AXIM, which is about 40% of its outstanding share count. Their futures really are tied together.
The component here that I really don't care for is AXIM Biotechnologies, which is planning to use its cannabinoid-based drug technology via chewing gums and other delivery mechanisms to fight a host of diseases. While listing 16 separate studies on its website, just three of these studies have moved beyond preclinical testing and into human trials. Despite these three clinical studies -- two of which are in phase 2, and the other in phase 1 -- AXIM hasn't demonstrated much in the way of efficacy so far, but somehow, it still commands a market cap north of $320 million. That doesn't make a lot of sense.
What's more worrisome is AXIM's ability to generate capital to run its studies and keep the lights on. In its full-year report, filed in mid-March, AXIM lists $2.11 million in current assets and $7.71 million in current liabilities. It simply doesn't have the funding (as of now) to survive another year, and the company's 10-K explicitly states, "We will not consider taking on any long-term or short-term debt from financial institutions in the immediate future." Essentially, common stock offerings and shareholder loans are its only source of capital, and it expects to spend $12 million just for research and development expenditures in 2018. In short, this is a going concern if I've ever seen one.
Meanwhile, Medical Marijuana Inc. has shown sparks of success with its hemp oil-based products, and it recently recorded a 255% increase in year-over-year sales in its fiscal third quarter. Unfortunately, a sizable chunk of its asset value is tied to AXIM's stock, which I suspect could perform poorly in the years to come.
Furthermore, Medical Marijuana Inc., despite being the first publicly traded pot stock, has an ever-growing accumulated deficit (i.e., aggregate loss since inception) of $82.3 million. Year after year of losses should be more than enough reason for investors to keep their distance
*****ENOUGH SAID*****
MBA = MASTER BULLSHIT ARTIST ENUFF SAID !
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