Shares of Medical Marijuana Inc (OTCMKTS:MJNA) are reacting to news that the company just announced it has launched a new high-cannabidiol (CBD) formulation of its popular Active Relief Roll-On topical product. We still aren’t fans of this dilution monster (that has spent over a decade on the pink sheets doing reverse splits and never providing audited financials), but it’s worth considering how they are approaching the CBD space after the last year of imploding performance across the industry.
“In addition to their many potential wellness benefits, topical CBD products have expanded the world’s acceptance of hemp and cannabinoids,” said Dr. Stuart Titus, CEO of Medical Marijuana, Inc. “People have a general understanding that applying a lotion isn’t going to get you high or impact your cognitive function, they’re more willing to try CBD topical products than something they might have to take orally and from there may become curious to learn what it really is and does.”
Medical Marijuana Inc (OTCMKTS:MJNA) casts 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.
MJNA’s 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
MJNA 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, sportswear and more.”
According to company materials, “Our mission is to be the premier cannabis and hemp industry innovators, leveraging our team of professionals to source, evaluate and purchase value-added companies and products while allowing them to keep their integrity and entrepreneurial spirit. We strive to create awareness within our industry, develop environmentally friendly, economically sustainable businesses, while increasing shareholder value.”
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As noted above, MJNA just announced that it has launched a new high-cannabidiol (CBD) formulation of its popular Active Relief Roll-On topical product.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action MJNA shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -18% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. What’s more, the listing has benefitted from a jump in recent trading volume to the tune of topping 130% above its longer-run average levels.
“It’s no secret that the CBD topical market has exploded over the past two years,” said Todd Morrow, President of HempMeds. “We are optimistic that this new formulation of a product that consumers already love will fare well in the $4 billion U.S. CBD market, of which 17% of sales come from topical products.”
Now commanding a market cap of $58.8M, MJNA has a significant war chest ($6.5M) of cash on the books, which compares with about $10.8M in total current liabilities. One should also note that debt has been growing over recent quarters. MJNA is pulling in trailing 12-month revenues of $76.3M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 5.3%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $MJNA stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $MJNA, either long or short, and we have not been compensated for this article.