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Thursday, October 22, 2020

Integrating New Data on Marijuana Company Of America Inc (OTCMKTS:MCOA)

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Marijuana Company Of America Inc (OTCMKTS:MCOA) is a low-priced momentum stock in the cannabis space that continues to regularly feature at the top of the most-traded list on the OTC. The company’s latest catalyst is its announcement that it has entered into a non-binding Letter of Intent, while performing due diligence, to finalize a joint venture agreement with Bougainville Ventures, Inc. The purpose of the JV is housing tenant growers engaging in the cultivation, processing and commercial availability of legal marijuana in the State of Washington.

Traders will note 26% tacked on to share pricing for the stock in the past week. Market participants may want to pay attention to this stock. MCOA has evidenced sudden upward volatility on many prior occasions. Moreover, the stock has witnessed a pop in interest, as transaction volume levels have recently pushed 21% over what the stock has registered over the longer term. Since we last covered the name, MCOA stock has moved -19.9% lower.

Marijuana Company Of America Inc (OTCMKTS:MCOA) trumpets itself as a marijuana marketing and distribution company. It intends to distribute a range of marijuana, CBD, and related products in the United States and internationally.

The company was formerly known as Converge Global, Inc. and changed its name to Marijuana Company of America, Inc. in December 2015. Marijuana Company of America, Inc. was founded in 1985 and is headquartered in Bonsall, California.

According to the Company’s press materials, “MCOA plans to distribute marijuana and products related to marijuana as well as CBD and hemp, using a variety of marketing approaches to distributing on a global basis.”

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The last time we covered the name, the key story was about an eventual uplisting. According to its materials, that process entails a two-year audit of the Company’s financial statements and would be a piece of the puzzle in becoming a fully reporting public company with the intent of uplisting to a higher reporting exchange. “Our goal is to be a fully transparent reporting public company,” said the Company’s CEO, Donald Steinberg.

This new catalyst may support that effort to some extent, as it provides additional strength to the company’s asset base as well as a credible path to future revenues that are on a tangible calendar to post date. The question for the market will be about whether or not this form of the company narrative justifies the current market cap even in the best case scenario. We don’t necessarily have a view on that, but will continue to keep tabs on the story and update our take as this evolves.

According to the release, MCOA will invest up to $1 million in cash in a newly formed entity and receive 50% equity ownership and 50% share in net profits produced by the joint venture. Bougainville Ventures, Inc. will contribute its expertise in establishing facilities related to the production, processing and management for tenant growers utilizing an I-502 Tier 3 license, with leased property, established partnerships, licensing agreements and marketing relationships.

Donald Steinberg, MCOA President and CEO said, “We are looking forward to getting seed in the ground and ramping up this partnership with Andy Jagpal and Bougainville Ventures. This partnership further strengthens our supply chain and enables MCOA to produce the highest quality products at the lowest possible prices.”

“We couldn’t be happier than to have aligned ourselves with the outstanding team at MCOA,” said Jagpal, President of Bougainville Ventures, Inc. “With the management expertise that the highly skilled professionals at MCOA bring, we have insured the certainty of expanding our Washington State Greenhouse Campuses while achieving our revenue and profitability goals.”

Earning a current market cap value of $127.4M, MCOA has virtually no cash on the books, which stands against about $108K in total current liabilities. One should also note that debt has been growing over recent quarters. The company is pre-revenue at this point. We will update the story again soon as developments transpire. For continuing coverage on shares of MCOA stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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