Medical Marijuana, Inc. (OTCMKTS:MJNA) Slips Further as Pot Sector Recoils
Last Thursday marked the beginning of a collective cringe that was felt across the entire marijuana sector of the OTC. Medical Marijuana, Inc. (OTCMKTS:MJNA) was among those who suffered a nasty blow as well, closing down in double digits, for the first time in the last two months. On Friday the price dropped another 4.7% to a close of $0.219 per share.
MJNA published its annual report a while back. The lukewarm reception of the figures reported was hardly the only factor pressing the price down. The ticker’s 11% drop on Thursday happened on the very same day when Growlife, Inc. (OTCBB:PHOT) was suspended by the SEC.
We have always encouraged our readers to tread very carefully when looking at pot stocks and do their own, extensive research. Still, in the mind of many traders, PHOT was one of the most stable, well-established and reliable players in the field. The company has been around for a longer while that most of those who decided to switch to marijuana in the second half of 2013 and early 2014. It also had one of the better balance sheets in the sector but even though it was only recently highlighted as a ‘legitimate company’ in a video piece on pot penny stocks, it was suspended less than 24 hours later by the SEC.
The suspension blindsided many traders and caused a very tangible kneejerk reaction and panic selling of virtually every actively traded marijuana stock. Additionally, there was a bit of a hiccup concerning CannaVest Corp. (OTCMKTS:CANV) last week. CANV filed an 8-K explaining that its last three 10-Qs ‘should no longer be relied upon’ due to the purchase price and allocation of the purchase of PhytoSphere assets from MJNA and mistakenly reported Q1 2013 sales and costs. This filing mixup led to the Rosen Law Firm starting an investigation into ‘potential securities fraud claims’ against CANV and preparing a class action lawsuit on behalf of CANV investors.
The CANV debacle and the suspension of PHOT, combined with the unconvincing annual report of MJNA that listed just $211 thousand in annual net income before extraordinary items (CANV share payments), likely dragged MJNA‘s share price down. The company just came out with a new bit of PR concerning the launch of its newest subsidiary – aNew Chocolate LLC, manufacturer of the world’s first CBD-rich oil-infused chocolate bars. Hopefully the new subsidiary will be more successful than CanChew Biotech, another MJNA offshoot that produces the world’s first CBD-rich chewing gum and generated $57 thousand in Q4 revenue.
