Medical Marijuana Inc (OTCMKTS:MJNA) is due for a major bounce back at the back of strengthening fundamentals, after plunging to one-year lows. The stock is down by more than 50%, in what is turning out to be a replica of last year’s price action activity.
Medical Marijuana Price Analysis
Last year, the stock took a similar hit and consequently plunged from highs of $0.20 a share to the $0.06 level. However, upon hitting the critical support level, the stock did bounce back to the $0.17 handle. The $0.06 handle has essentially merged as a critical support level from where the stock could rally after the recent sell-off.
Recent developments support a rally, back to the top. For starters, the company is fresh from reporting record revenues for Q3 having also achieved significant milestones when it comes to business operations. The company is also fresh from receiving permits through its subsidiary that paves the way for it is to pursue cannabis opportunities in Mexico.
Its Subsidiary has also unveiled a new hemp-based CBD cannabidiol Pure Liquid Flavored Trio. Its other subsidiary HempMeds has also announced a new line of liquid hemp products further strengthening the company’s product line.
While the company appears to be firing on all cylinders when it comes to business operations, the same cannot be said about the stock. The stock is currently flirting with a critical support level from where it could bounce back and rally back to this year’s highs.
A sell-off followed by a close below the $0.06 level could leave the stock susceptible to declines, back to two year’s lows of $0.04 a share. However, above the $0.06 level, the stock remains well positioned to make a run for this year’s highs of $0.17 a share.
What Does Medical marijuana Do?
Medical Marijuana cast itself as an investment holding company operating in the medical marijuana and industrial hemp markets. The company specializes in the production of patented and proprietary cannabinoid-based products. The company also licenses its proprietary testing, genetics as well as labeling and packaging methods to the medicinal cannabinoid industry.
Record Q3 Revenues
Medical marijuana is due for a bounce back on reaffirming its growth metrics and long-term prospects. The company is fresh from delivering impressive financial results depicted by the largest revenue in the company’s history.
Revenues of $16.8 million in Q3 represented a 116% year-over-year increase. Revenue for the first nine months of the year, on the other hand, came in at $42.1 million representing a 146% increase. Gross profit in the quarter surged 140% leading to a net ordinary income in excess of $600,000.
“In Q3, we saw incredible international expansion and released numerous exciting new products. As we continue our momentum in Q4, we will aim to increase shareholder value through further development of our subsidiaries and their product lines,” said Medical Marijuana, Inc. CEO Dr. Stuart Titus.
Business Operations Milestones
In addition to robust financial results, Medical Marijuana has achieved significant stride in strengthening its business operations. The company has received five new permits that pave the way for it to export its cannabidiol products to Mexico.
The permits should allow the company to expand the market reach of its products in pursuit of more revenues. Its HempMeds subsidiary has also opened a new office in Brazil, further affirming the company’s international expansion drive.
Product Line Expansion
In a bid to cater to the growing need for cannabis products, Medical Marijuana is increasingly expanding its product pipeline. Its subsidiary HempMeds has released two new liquid hemp products Green Label Liquid Hemp Oil 2 oz. and RSHO™ Gold Label Liquid Hemp Oil 2 oz. The unveiling of the two products comes on the company experiencing tremendous success with its 4-ounce and 8-ounce liquid hemp oil products.
Medical Marijuana other subsidiary Dixie Botanicals has also released a new line of flavored cannabidiol vaporizer (vale) liquids. The new CBD product line seeks to provide users an opportunity to consume CBD in a quick and efficient way.
There is no doubt that Medical Marijuana is experiencing robust growth if Q3 financial results and business operation milestones are anything to go by. Robust revenue growth affirms the company’s growth strategy key to generating long-term value.
While the stock has underperformed for the better part of the year, it may be a matter of time before it bounces back on investors taking note of the solid underlying fundamentals.
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Disclosure: We have no position in MJNA and have not been compensated for this article.