Rapid Fire Marketing Inc. (fka RFMK)

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Will a Crackdown on Medical Marijuana Hit Cannabis Stocks Like RFMK, MWIP & HEMP

http://www.smallcapnetwork.com/Will-a-Crackdown-on-Medical-Marijuana-Hit-Cannabis-Stocks-Like-SPER-RFMK-MWIP-HEMP/s/via/3414/article/view/p/mid/2/id/15/

Will a Crackdown on Medical Marijuana Hit Cannabis Stocks Like SPER, RFMK, MWIP & HEMP
SearchCore (SRER), Rapid Fire Marketing (RFMK), MediSwipe (MWIP) and Marijuana, Inc. (HEMP) provide services to the medical marijuana and cannabis industries.
By John Udovich
Jul 12, 2012 5:17:41 AM PDT | No Comment(s) - Post a Comment Rating StockHQ:MWIP$0.00 $0.00 0.00% CBIS$0.05 $0.00 0.00% MJNA$0.03 $0.00 0.00% RFMK$0.00 $0.00 0.00% HEMP$0.01 $0.00 0.00% SRER$0.51 $0.00 0.00%
John Udovich

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The government is cracking down on California's massive medical marijuana and cannabis industries by targeting Harborside Health Center, which calls itself the largest medical marijuana dispensary in the World, meaning it might be a good time to look at medical marijuana or cannabis stocks like SearchCore (PINK: SRER), Rapid Fire Marketing (PINK: RFMK), MediSwipe (OTC: MWIP) and Marijuana, Inc. (PINK: HEMP) that provide the industry with various services (See my previous article: Does a Crackdown on Medical Marijuana Limit the Growth of Cannabis Stocks CBIS, MDBX & MJNA?). Specifically, Federal prosecutors have filed civil forfeiture actions against Harborside Health Center in Oakland. According to the US attorney for the Northern District of California, the larger the marijuana dispensary operation, the greater the likelihood that the state's medical marijuana laws are being abused (Harborside Health Center says it serves more than 100,000 “patients”). That means there is probably a growth limit for individual medical marijuana dispensaries but what about medical marijuana and cannabis stocks like SearchCore (SRER), Rapid Fire Marketing (RFMK), MediSwipe (MWIP) and Marijuana, Inc. (HEMP) which provide services to such dispensaries?

Starting with SearchCore (PINK: SRER) which was formerly known as General Cannabis, Inc., it combines web properties, digital marketing, custom software and tech based business services for qualified niche markets – namely the medical marijuana and cannabis industries. SearchCore’s major asset would be the website WeedMaps.com, which is apparently well known by marijuana users and its recently launched GrowShops.com for the indoor marijuana growing community. Back in May, SearchCore reported that 1Q2012 revenue rose 78% to $3.6 million while EBITDA came in at $0.9 million verses ($0.1) million and net income (including a pre-tax, non-cash gain) rose from a net loss of $0.1 million to net income of $3.4 million. SearchCore did end the quarter with cash and cash equivalents of $1.4 million, total debt of $7.9 million and non-cash earn-out liability of $15.7 million – meaning its in better shape than many other OTC stocks and certainly any other stock in the medical marijuana or cannabis industry. On Wednesday, SearchCore closed at $0.51 on low trading volume (SRER has a 52 week trading range of $0.38 to $3.40 a share) for a market cap of $42.5 million.

Meanwhile, Rapid Fire Marketing (PINK: RFMK) owns two subsidiaries inBionicCigs.com, a retailer of electronic cigarettes; and Medical Cannabis Management (MCM), a company providing marketing, consulting and management services to the medical cannabis industry in California. Back in April, Rapid Fire Marketing provided an update about its plans to go from a non-reporting OTC company to a fully reporting one along with its plans for growth. Rapid Fire Marketing could use some growth as its reported revenues of $0.05M (2011), $0.06M (2010), $0.05M (2009) and $0.03M (2008) for the past four years; net losses of $1.19M (2011), $4.00M (2010), $0.25M (2009) and $2.91M (2008); and had $0.07M in cash to cover $0.08M in total liabilities. So at least Rapid Fire Marketing is not loaded up on debt but its also probably diluting shareholders to stay afloat. On Wednesday, Rapid Fire Marketing rose 9.09% to $0.0012 (RFMK has a 52 week trading range of up to $0.03 a share) for a market cap of $896,302 but the stock is down 64.7% since the start of the year, down 81.2% over the past year and down 99% since early 2009.

Moving on to MediSwipe (OTC: MWIP), which was formerly known as Cannabis Medical Solutions Inc., it offers a complete line of merchant services for a medical dispensary – presumably a medical marijuana dispensary. However, a quick glance at MediSwipe’s current website does not show mentions of cannabis or medical marijuana but a deeper look does reveal a mention that the chief element of the company’s credit card processing solution is tailored medical marijuana dispensaries. Hence and perhaps MediSwipe is trying to move away from being too closely associated with the medical marijuana industry. On Wednesday, MediSwipe rose 7.69% to $0.0014 for a market cap of $543,252 – less than the value of a Bay Area building housing a medical marijuana dispensary. MediSwipe is also down 63.2% since the start of the year and down 87.8% over the past year.

Finally, Marijuana, Inc. (PINK: HEMP), which has just changed its name to Hemp, Inc., is not involved in the cultivation or marketing of medical marijuana but instead its focused on the peripheral businesses created by the medical marijuana and hemp industries with its major asset being Hemp.com. However, it should be noted that Hemp, Inc. has an unsolicited quote warning on OTCMarkets.com because no firm is making a market in the stock. Nevertheless and on Wednesday, Hemp, Inc. closed at $0.0147 for a market cap of $10.77 million and the stock still has a trading volume of around 100,000 shares per day. Hemp, Inc. is also up 17.6% since the start of the year, up 47% over the past year and up 194% since the start of 2011.

The Bottom Line. Risk adverse investors who are not smoking something would probably want to avoid medical marijuana or cannabis stocks like SearchCore (SRER), Rapid Fire Marketing (RFMK), MediSwipe (MWIP) and Marijuana, Inc. (HEMP) but traders could find a way to get a high off of them.