Medical Marijuana: Positive Growth Prospects and Investment Opportunities

Medical Marijuana Inc (OTC: MJNA) is the first cannabis company to be publicly traded in the United States. It is a diversified holding company that operates the industrial hemp sector and the legal medical cannabis industry.  It was incorporated in 2009 and is comprised of a well-positioned portfolio of cannabis brands that continues to expand and flourish.  

From a broader investment perspective, the market capitalization of MJNA now stands at $207 million -- and this represents a massive discount to the company’s strong net asset values.  As an undervalued company in a growing industry, MJNA is in a place to move higher over the next several years, while other areas of the stock market remain inflated and vulnerable to potential downside.

Following are the business units and subsidiaries of MJNA:

STRONG FINANCIAL OUTLOOK:

1. Revenue Growth & Drivers:

• The Gross Revenue of MJNA has grown by 230% from $1.7 million in Q2 2016 to $5.7 million in Q2 2017. This year has been positive for MJNA as it did see some revenue declines in the past two years.

• For the entire year of 2016, they had revenue of $8 million. In Q1 2017 they had revenues of $3 million while in Q2 2017 they grew to $5 million. Thus the company has been growing at an exponential rate.

• There are strong indications of the revenue increasing much more in the next two reporting quarters for 2017 as Mexico has legalized medical marijuana.  MJNA has subsidiaries in Mexico and so they can look forward to increases its sales from that market.

• There is significant interest income ($1.6 million in Q2 2017) that MJNA is paying for its debts which is having an adverse impact on its profitability. However, if MJNA’s keeps improving on its revenue on subsequent quarters, the interest expense would not matter as much and the company can bring itself into a consistently profitable phase.

• Performance of its subsidiary: Kannaway Inc:

  • Kannaway’s revenue has grown 25 times from March 2016 to August 2017 (with exponential growth seen in the CBD hemp oil industry).

  • Since March 2016, the company has grown its customer base by 500 percent, leading to increases in overall revenues of roughly 1,100 percent.

FAVORABLE REASONS FOR INVESTMENT:

Geographic Penetration:

1. Mexico: MJNA is expanding its footprint in Mexico as it is the first company with CBD (Cannabidiol) products approved by the Mexican Government. HempMeds, subsidiary of MJNA produces a cannabis product that is the only legally approved product and the first to receive a COFEPRIS approval to import cannabis products.

2. Latin America: MJNA has found lot of success in the Latin American market, (especially in Brazil and Paraguay).  The company’s Real Scientific Hemp Oil has already been granted 12 medical registrations in Puerto Rico.  In April 2014, the Brazilian government approved the importation of a drug produced by MJNA (Real Scientific Hemp Oil), which is a CBD Hemp Oil. HempMeds Brazil has received approval for its first three indications (Parkinson's disease, chronic pain and epilepsy).

CBD Pharmaceutical Applications:

MJNA and its subsidiaries are focused on devising treatments for several serious illnesses where there are currently no treatments. Research studies have shown that cannabinoids (THC, CBN, CBC, THCV, CBD, CBG) have a positive impact on the wellness and health of those with cancer or other debilitating ailments.   

Growth Outlook:

Over the last two years, shares of MJNA have moved lower in line with the many of the small cap stocks within the industry.  The company has continued to implement strategies on initiatives, build its brand, and enter new markets. The diversification of the company’s subsidiaries and associates helps in increasing the revenues of the company and thus improving its market share profoundly over the next several years.

Strong Initiatives by Subsidiaries:

The subsidiaries of the company have diversified their footprints in the cannabis market. Following are some initiatives in this regard:

1. MPSI: MPSI is the first logistics and security company serving the cannabis industry. As more and more states in the US look toward legalizing cannabis products, MPSI looks toward expanding its services.

2. AXIM: AXIM Biotechnologies entered into an exclusive agreement to introduce  a new medical product to market, MedChew RX. It has access to intellectual property that will innovate how cannabis-based medicines are manufactured and purchased by patients.

3. Wellness Managed Services: Wellness Managed Services has provided services to 150 dispensaries in Colorado, Arizona, Nevada, and California. The combination and standardization of its services has allowed the company to be the first to offer a franchise-like opportunity to proprietors in the dispensary or collective industry in the states where medical marijuana is legal.

4. Kannalife: Kannalife is currently using its licenses to develop novel therapeutic drugs to treat CTE and hepatic encephalopathy (HE). While CBD from marijuana is tightly restricted, CBD found naturally in hemp is legal in all 50 states.

5. Kannaway: It is the first hemp lifestyle marketing company, with more than 2,000 brand ambassadors to offer cannabidiol hemp botanical products. Kannaway offers several high-quality CBD hemp oil products.

Strong Management Team:

Medical Marijuana, Inc. is led by a management team that is structured in a way that can create strategic value for its shareholders and also continues to execute on its initiatives. The company’s CEO, Dr. Stuart Titus, is a Fellow with both the American Association of Integrative Medicine and the American Academy of Pain Management and was a former clinician holding a Ph.D. in Physiotherapeutics. Blake Schroeder manages company operations and has a capable background after his tenure in nutritional company, which developed an Acai-based nutraceutical and promoted its health benefits throughout the world.

Medical Marijuana Inc. is comprised of a diversified portfolio of companies and brands that continue to flourish as new markets open and existing markets continue to develop.  The current market capitalization of $207 million creates a massive discount when viewed alongside the company’s net asset value of roughly $428.5 million, according to Q2 filings.  As an undervalued company in a growing industry, MJNA stock is in a place to move higher over the next several years.