New ventures are being sought daily to find new markets for the cannabis industry. This research has led to the World Anti-Doping Agency (WADA) making a significant decision that will impact the field long into the future.
As of 10th October 2017, WADA announced their removal of cannabidiol (CBD) from the list of banned substances, creating an $11 billion industry to the jubilation of Medical Marijuana Inc (OTCMKTS:MJNA).
The $219 million company has significantly researched on this field and was therefore the first entity to announce its willingness to venture into the industry. Over this time, however, their share price has been on a downward trend, as seen in the chart below, signifying other factors driving the company.
In this piece, we will assess the company in a bid to determine drivers of their share price and thus give our view on the future trends in the company’s share price.
An Overview Of Medical Marijuana Inc
Founded in 2009, Medical Marijuana, Inc., is a holding company with subsidiaries that make and sell a range of hemp-based products. Moreover, they are the first publicly held company vested in the cannabis and industrial hemp space in America.
Through its subsidiaries and investment holdings the company focuses on the development, sale and distribution of hemp oil that contains naturally occurring cannabinoids, including cannabidiol (CBD) and other products containing CBD-rich hemp oil.
Company products are formulated for the pharmaceutical, nutraceutical and cosmeceutical industries, including dietary supplements, prescription-based hemp oil for sale in countries that have legalized our hemp oil for the treatment of various illnesses and conditions (such as Brazil and Mexico) and skin care products.
Medical Marijuana, Inc.’s Real Scientific Hemp Oil-X™ (RSHO-X) ™ CBD hemp oil, which is the only product on the market to be recognized by international governments to be completely free of tetrahydrocannabinol (THC), the well-known psychoactive compound in marijuana, is an ideal option for athletes looking to safely incorporate cannabinoids into their regimen.
Medical Marijuana, Inc. CEO Dr. Stuart Titus said:
“This decision by the WADA is on par with what the rest of the medical world and countries around the world are realizing about the therapeutic benefits of CBD and athletes specifically need solutions in the areas of nutrition, relaxation, focus, recovery and repair. For athletes, our first-of-its kind THC-free RSHO-X eliminates the concern of a violation for athletes or anyone else liable to drug tests.”
Finally, in a bid to meet the high demand they have, they have made a move to increase their space in California, tripling the size of their previous site in a move that will lead to the addition of over 20 new employees. This will also allow the Medical Marijuana, Inc. portfolio of companies, such as wholly owned subsidiaries Kannaway® and HempMeds®, to provide more of the highest-quality CBD lifestyle products to customers around the globe.
Their CEO has hailed this move stating that the growth in their subsidiaries is a welcome move for the company as follows:
“We are proud to watch our portfolio of companies expand to larger endeavors as we continue to expand into new and growing markets,” said Medical Marijuana, Inc. CEO Dr. Stuart Titus. “Our portfolio of companies continues to create exciting developments in the cannabidiol (CBD) sector and is on track for a banner year, in terms of gross sales revenue figures. We are very pleased that this fantastic year of growth and expansion will bring new jobs to the area.”
With the above being held, MJNA is well positioned for growth and can only be limited by their financial position. As such, let us assess this position in the next section.
In the most recent quarter, the company made revenues of $5.70 million up from $3.61 million, a 57% increase. This was due to a significant increase in their business operating activities during the period.
However, their net loss position still held during the same period standing at $(2.045 million). This was lower than the previous quarter where the net loss stood at $(2.222 million). Despite this, the market’s reaction to this is quite clear with the share price dipping during and after the period of the loss announcement.
Finally, in more positive news, they made $77.074 million from their investing activities up from $(108.225 million) in the previous quarter significant of better returns on their investments. Leveraging on these investments would prove vital to the company’s financial performance in the long run as they seek to generate income for their growth into new markets into the future.
As can be seen above, the numbers above do not necessarily paint the best picture especially for a company with a market capitalization of $219.6 million. However, given their strategy and ability to enter into new markets, their growth is subject to little limitation.
MJNA is not only positioned for growth but is also financially capable of growth. As such, investors will do well for themselves by investing in a company with a firm outlook and strong financial base to get them to their vision. At current levels, shares of MJNA look to be a bargain.
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Disclosure: We have no position in MJNA and have not been compensated for this article.