MaryJane Group Inc (OTCMKTS:MJMJ) Struggles to Hold Gains

After a three-day roller coaster ride on the charts, MaryJane Group Inc (OTCMKTS:MJMJ) is making another push up. On Friday the company’s stock put on nearly 29% to stop at $0.0058 per share. Volume returned to a humbler 51 million – a quarter of Wednesday’s 219 million shares traded.

The reason for the original pop that brought MJMJ in the spotlight was a press release dated Jun 9. The company announced opening the first “cannabis resort” in the U.S. – the CannaCamp. This seems to be the new name for the Wilderness Trail Ranch near Durango, CO. Formerly a family-operated hospitality business, the ranch has been transformed into a location especially suited to accommodate cannabis lovers. With the promise of a “cannabis concierge” on location and gourmet meals, the pricing becomes nearly justifiable. If you want to make a booking for two, for a single night, that will cost you $828.

It should be noted that marijuana will not be sold on site in the CannaCamp but the concierge will provide advice and special rates from nearby dispensaries partnered with the company.

This is all great and could pan out favorably for MJMJ in the long run. However, there is no real way to estimate how much of the revenue generated stays with the company and what part goes to the owners of the ranch under the terms of their agreement.

There is also the very serious matter with MJMJ‘s share structure. The company’s current number of outstanding shares is the core of the issue. Between March and June this year, MJMJ went from 21 million outstanding common shares to 126 million, as per a Schedule 13G dated June 8. However, two days later, on June 10, the company registered 219 million shares in daily volume, indicating that total outstanding shares may have ballooned quite a bit from the 126 million just days ago. The initial 500% dilution in the space of three months is disturbing enough. If MJMJ‘s outstanding shares have taken a further hike, this percentage becomes even scarier.

MJMJ upped its authorized shares from 200 million to 1 billion in May, so the sky is the limit when it comes to diluting further.