Medical Marijuana Inc (OTCMKTS:MJNA) is a pink sheet, highly speculative penny stock residing in the marijuana space. MJNA has generally underperformed other stocks in the space over the past several years despite branding itself through its press releases as a top-tier player in the space. The company just came out with a press release clearly trying to stoke further enthusiasm, announcing that the second quarter of 2017 generated the largest revenue quarter in the Company’s history. According to the release, additionally, MJNA celebrated the largest-ever single month of revenue in June 2017 as well as the largest sales month and quarter for wholly owned subsidiary Kannaway.
Now, it’s important to acknowledge the reality here: this is still a pink sheet company (the least trustworthy designation a publicly traded company can have), and these are not financial results in the sense of an audited, sound report filed with the SEC. Instead, when an unaudited pink sheet stock “reports” financial data, it’s a bit like your next door neighbor telling you about the number and size of the fish he caught on his weekend fishing trip. With that said, here is what the company claims: a gross revenue increase from $1,660,633 in Q2 2016 to $6,131,415 in Q2 2017, a quarter-over-quarter increase of 269% making it the largest quarter in the Company’s history.
Medical Marijuana Inc (OTCMKTS:MJNA) bills itself as an investment holding company that operates in the medical marijuana and industrial hemp markets. Its products range from patented and proprietary based cannabinoid products to seed and stalk or isolated high-value extracts manufactured and formulated for the pharmaceutical, nutraceutical, and cosmeceutical industries.
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Its subsidiary, Kannaway, LLC, is a network sales and marketing company specializing in the sales and marketing of hemp-based botanical products. Kannaway currently hosts weekly online sales meetings and conferences across the United States, offering unique insight and opportunity to sales professionals who are desirous of becoming successful leaders in the sale and marketing of hemp-based botanical products.
The company licenses its proprietary testing, genetics, labeling and packaging, tracking, production, and standardization methods for the medicinal cannabinoid industry. It engages in the research and development of cannabinoid-based pharmaceuticals; and marketing and distribution of cannabidiol hemp oil-based products.
In addition, MJNA provides management support and services to cooperatives, collectives, health and wellness facilities, and medical clinics; and consulting and securities services to businesses and individuals in the legal cannabis industry. Further, it focuses on the treatment of pain and other medical disorders with the application of chewing gum-based cannabis/cannabinoid medical products.
As noted above, MJNA has made some bold and technically unsubstantiated claims of making big money in its latest press release. If it seems like we are being harsh with all of these qualifications and cautionary statements, we feel that is our responsibility to the reader. These dynamics are often not noticed by more amateur traders on the OTC. And it’s worth it to us to make sure we draw attention to things like this. If you check MJNA’s filings, you will find no submitted and audited 10-Q associated with statements like this:
“The Company also saw year-to-date and year-over-year revenue increase from $3,177,103 to $9,651,088 an increase of 203%.” If this is actually true, look at the action in the stock… Wouldn’t you expect to see a stock that is faring better than -40% over the past 6 months.
If this is actually true, look at the action in the stock… Wouldn’t you expect to see a stock that is faring better than -40% over the past 6 months.
Note, we are not saying MJNA is putting out fraudulent financial claims. Since they are not even pretending to release audited financial numbers, it is clearly up to market participants to include a grain of salt when digesting MJNA financial releases.
That’s why OTCmarkets.com makes clear that the company’s designation is “Pink Sheet” and that its financial claims are fully Unaudited. It’s a simple “Buyer beware” designation.
But just think about it this way: If you are a shareholder of MJNA, and if these results are actually true and factual, then what a terrible disservice the company is doing to you by not simply graduating from the lowly ranks of the unaudited pink sheet stocks. What a shame they don’t take the step with filings of audited numbers.
Can you imagine how the share price of Medical Marijuana Inc (OTCMKTS:MJNA) would sprint higher? It might be trading at many times its current price if it were to signal to the market that it was willing to play by the traditional rules of the game and file its results through the proper channels for a publicly traded company. But, for some remarkable and mysterious reason, the company refuses to take that step, even after all these years, particularly given the fact that, according to their own claims, they can certainly afford auditing. For continuing coverage on shares of $MJNA stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!
Disclosure: we hold no position in $MJNA, either long or short, and we have not been compensated for this article.