Amigula Inc. (AMJL)

[dapoopa]

My thoughts on the Forbes article

I think the guy who wrote the Forbes article is technically correct about Amigula's licensing status, but he makes no mention of the fact that the licensing issue is an ongoing process that has yet to be resolved by the authorities. It should be resolved, one way or another, with passage of Bill C-10 and subsequent amendments to Health Canada's medical cannabis regulations. Having said that, for the time being the licensing issue is clearly in a grey legal area.

The Wired article on the company http://www.wired.com/news/business/0,1367,61300,00.html?tw=wn_tophead_1 also goes into detail about this issue. In the meantime, I have heard of no law or securities enforcement actions against the company's management, which is of course a positive sign. In fact, the longer the company survives the better its chances appear.

Barron's recently mentioned that Amigula has already contracted with 50 licensed growers and is seeking $7 million in private equity funding in addition to the money Warren Eugene donated from his own pocket (I have seen two figures -- $500,000 and $5 million Canadian). The law as it currently stands does seem unclear about whether these growers can then contract among themselves or with a holding company like Amigula. So Eugene is stepping into this legal void and forcing the issue. Risky, sure, but for him it appears to be a chance worth taking.

It should be noted that Amigula did perform a reverse split into Medical Cannabis Inc., which does have a license. Whether this license can be transferred is another grey legal area that must be resolved. My guess is that Amigula is lobbying Health Canada and the Canadian parliament to define their license status in precise terms as part of Bill C-10. Those investing in this stock should be aware that this process could be slow and take months to resolve.

Meanwhile the stock is trading and seeing increasing volumes each week. The company is open to criticism that it may have put the cart before the horse with its listing, but the fact that their listing was approved by the Toronto TSX Venture exchange and haven't been de-listed does mean something. If the Canadian authorities rule against Amigula, it would definitely be a negative, but I imagine they would then appeal. On the other hand, a positive ruling would be a huge catalyst for the share price. Whatever the outcome, the company probably has some effective lawyers and lobbyists who are working to iron out these ambiguities.

The guy who wrote the Forbes article also mentioned the SEC, but Amigula is a Candian company and is not listed on any U.S. exchanges yet, so it seems the SEC has no jurisdiction here. The Canadian securities authorities are another thing, but I have yet to hear that they are taking any action. I suppose everyone is simply waiting to hear the fate of Bill C-10, which is currently being considered by the parliament. The details in that piece of legislation should make or break this company.

Meanwhile, the market seems to have shrugged off these licensing concerns. The stock price jumped 50% on Thursday and added a bit more yesterday on record volumes. This is a sign of faith in the company's business model, which may help when it comes time for management to seek listings in other countries. I wonder if some of the larger buyers may know more about the company's licensing status than the rest of the market.

BTW I emailed that article to Warren Eugene but have yet to hear back from him. I'll let the board know if he replies.

In the meantime you can follow my further thoughts on this stock's investment case through the following links:

http://www.cannabisworld.org/vbportal/foru...15&pagenumber=1

http://www.overgrow.com/edge/showthread.php?t=429417

http://www.marijuana.com/420/showthread.ph...ghlight=Amigula