Todor Pichurov

Medical Marijuana, Inc. (PINK:MJNA) Closes in Double-Digit Red

by Todor Pichurov February 22, 2013
60MJNA_chart.pngYesterday was another red chart day for Medical Marijuana, Inc. (PINK:MJNA, MJNA message board). The stock slipped 23% down on nearly 36 million shares traded and closed at $0.222, 50% down from the high it reached during its more even mid-February march.

MJNA's most prominent public face, Tripp Keber, Dixie Elixirs managing director and MJNA board member, appeared on iCannabis Radio, addressing the recent allegations levied against the company and talking about the steps being taken to officially address the issue. It cannot be pinpointed with complete certainty whether the accusations thrown at MJNA alone drove the price down but the bottom line, as Mr. Keber pointed out, is that the company had about $200 million shaved off its market cap in a matter of days.

The prolonged slip is no doubt a disconcerting sight for all MJNA shareholders. At the same time, those who are long on the stock and believe it has the potential to recover and go higher had an excellent opportunity to load more shares by the bucket. This may have taken place but it could have been in amounts that could not offset those scrambling in panic.

To recap, MJNA have been taking steps to improve investor confidence and uplist to OTC by issuing an audited quarterly and a full-year report including future guidance. There was one somewhat disturbing highlight nested in the yearly update that had the potential to raise some eyebrows. MJNA previously announced the sale of the entire PhytoSphere hemp oil inventory for the sum of $35 million, with the first $4.5 million installment already paid up. The yearly update detailed that payment was being made with the stock of the purchasing entity, CannaVEST Corp, f.k.a. Foreclosure Solutions, an OTC traded company, currently bearing the FCLS ticker and expecting a symbol reassignment in the immediate future, whose shares are valued at $5.00.

08MJNA_logo.gifVirtually all shares of CannaVEST were held beneficially by three entities as of December 31, 2012, as per the furnished Schedule 13D forms. They came to own the shares by acquiring them from FCLS's former sole director and officer and other shareholders through a stock purchase agreement dated November 2012, for the sum of $375 thousand. The money was loaned to each of the buyers by Mr. Stuart Titus, associated with one of the three purchasing entities. While CannaVEST still operated as Foreclosure Solutions prior to the acquisition, the company had not generated revenue and had $163 in total assets. In order to fulfill its payment obligation for the hemp oil using only shares and following the first installment model, CannaVEST would have to issue a little over 6 million new shares, diluting its stock by about 75%.

Where MJNA is headed remains to be seen. The ongoing price drop seems to be scaring investors away but the future will show how things will play out.

Comments 7

1. Guest
December 06, 2014, 02:41PM

Quotes sick

2. Guest
February 24, 2013, 11:34AM

Quotes i have never seen any OTC stock attack by all the social media -seeking alpha ,HotStocked,sbwire ,.....if this thing can survive it will go over $1.00

3. Guest
February 24, 2013, 11:31AM

Quotes i have never seen any OTC stock attack by all the social media -seeking alpha ,HotStocked,sbwire ,.....if this thing can survive it will go over $1.00

4. Guest
February 23, 2013, 08:35AM

Quotes I bought this as a fun investment. If I lose the money, that's OK, I didn't invest that much, and I'll hold the money longer than if I was in Vegas. :-)

5. Guest
February 22, 2013, 01:28PM

Quotes for the original comment, I would say that a purchase is justified if we expect to see an increase in earnings that would yield a lower P/E ratio.

This is obviously the FP/E ratio - or forward price to earnings, but any estimation on future earnings are highly speculative at this point.

Unfortunately the volatility is in large part due to the uncertainty of the companies early critical decisions and its optimistic but still yet proven future growth in its revenue.

The only approach I can see to owning this stock is in its speculative and novel nature - if legalization efforts continue we could see a nice short to mid term appreciation. Other than that we need to ask ourselves if in the event of full legalization is MJNA best suited to take advantage of that in the coming years? All very important questions that need to be asked before investing in a share of a stock like this.

6. Guest
February 22, 2013, 10:53AM

Quotes Question for anyone out here: how do we justify purchasing, even in a dip, MJNA when its P/E is so high? (65 right now)

7. Guest
February 22, 2013, 10:41AM

Quotes Glad I'm not the only shareholder who noticed that stock for pay verbiage, absolutely stupid.

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