Medbox Inc (OTCMKTS:MDBX) Scores Permit, Drops Regardless

After Medbox Inc (OTCMKTS:MDBX) finished last week with a bang, putting on 33% in two sessions, Monday trading pushed the price back down. MDBX slid over 17% by the closing bell, despite the upbeat press release that went up on Friday.

On Friday morning, before the opening bell, MDBX announced that the city of San Diego awarded the company a conditional use permit, effectively giving it license to operate a medical marijuana dispensary. The PR further states that MDBX made an escrow payment for the property where the dispensary is to be located and the buildout is forthcoming.

This is great news, considering how having a company-operated dispensary is considered a holy grail of sorts in the penny pot stock world. Another OTC company that is doing this sort of thing and building out its own dispensaries, only in Nevada, is Terra Tech Corp (OTCMKTS:TRTC). One difference is that Terra Tech went through a long, difficult ordeal to secure the licenses back in the summer of 2014 and still has not announced the completion of its dispensaries buildout, while MDBX secured a permit seemingly out of thin air, even though the application documentation is stamped with the date Feb 10, 2015.

Despite this significant announcement, considering the almost legendary revenue generation potential of dispensaries, the market was far from thrilled. On the day the news went up, MDBX shifted over 5.5 million shares but ultimately closed just 3.5% up. Then the drop on Monday happened.

This announcement comes on the heels of the news that MDBX is starting the buildout of its hemp cultivation facility in the state of Colorado. Considering this accumulation of good news and the inability of the stock to sustain its price after each spike of excitement might indicate that shareholder confidence in the company is too deeply shaken after the undeniably abysmal chart performance of the stock over the last ten months.