It seems the goal of the name change from Medbox Inc (OTCMKTS:MDBX) to Notis Global Inc is for the company to get a fresh start. However, that's kind of hard to do when MDBX has such a horrible share structure. As of January 8, MDBX had 240 million shares outstanding, up from just 35 million in May. As a result of the dilution, shares of MDBX have been taken to the woodshed and long term shareholders decimated.The one saving grace that the company has is the coming Green Rush. We think 2016 is going to be a banner year for the cannabis industry. Roughly 14 states could legalize marijuana this year, adult-use cannabis or possibly both, either at the ballot box or through state legislatures. While it’s doubtful all those states will be successful, there’s a good chance at least a handful will legalize in 2016. No other single year has offered such incredible promise in terms of the sheer volume of states that could legalize, thanks to other pioneering marijuana markets and growing support for cannabis in general.MDBX describes itself as a leader in the rapidly emerging cannabis sector, provides specialized services to operators of dispensaries, cultivation centers, manufacturers and research facilities in those states where approved. Through trusted clients and affiliates, the company promotes efficient, consistent, high quality products that are priced right, readily available and safely packaged.In January, MDBX purchased a two-story, 7,500 square-foot retail property in San Diego, which will house a medical marijuana dispensary, scheduled to open in May of this year. MDBX will assist with the build-out of the property and will consult with the dispensary operator, Rise Industries, Inc., on compliance, training and related matters. MDBX will be paid a fee for its services, expected to approximate half of the dispensary's annual profits. The purchase price of the building was $937,369. The City of San Diego awarded MDBX a Conditional Use Permit (CUP) in September 2015, granting the company a license for the operation of the dispensary. The CUP is one of eleven to be awarded thus far.
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MDBX's Portland, Oregon-based dispensary client, Blue Sky of Portland, was named the top marijuana dispensary in The Leafly List for the second consecutive month in the state of Oregon. The Leafly List index score is a proprietary statistic created by Leafly to measure the performance of medical cannabis dispensaries and retail cannabis locations, looking at a number of metrics, including quality, service, and atmosphere of the location. MDBX provides on-going consulting to Blue Sky of Portland, and was initially retained to help establish the dispensary, obtain the state license, consult on compliance and permitting, and assist with the design and build-out of the location.MDBX also has a deal with Whole Hemp Company in Colorado. The terms of the agreement call for MDBX to receive 50% of the sales of hemp and cannabis crops grown on a dedicated 40-acre parcel of land on Whole Hemp’s Colorado Springs farm and on approximately 10 acres of land on the Medbox farm in Pueblo, Colorado. MDBX will also build 10,000 square foot greenhouses on its Pueblo property and Whole Hemp Company will pay for their construction. Next year, the two companies plan to cultivate hemp on 1,000 acres of Colorado farmland owned by Whole Hemp. Overall, the deal looks to be a win-win for MDBX and Whole Hemp.These deals are a continuation of the MDBX strategy. The company’s goal is to provide specialized services to operators of dispensaries, cultivation centers, manufacturers and research facilities in those states where approved. Whole Hemp fits this mold is that they are a premier grower of industrial hemp and manufactures phyto Cannabinoid rich hemp oil (PC-rich) that can be used in many commercial applications.
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Disclosure: We have no position in MDBX and have not been compensated for this article.
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