Medical Marijuana, Inc. (OTCMKTS:MJNA) – the Patience Game

After holding a steady course for nearly a couple of weeks, yesterday Medical Marijuana, Inc. (OTCMKTS:MJNA) took a more notable tumble, closing the session 6% down on moderately heavy volume.

The movement was not particularly alarming but it did slice almost a full cent from MJNA‘s stock price and such movement coming at a time when the company is expected to uplist out of Pink sheets and into a higher tier is never a pleasant thing.

The situation on the press release front is as quiet as it has been for a while now, with the latest release directly related to the company coming out in mid-June. The company could be steadily working to expand its operations and keep a low profile in the meantime, but when you operate in such a still-delicate sector, investors seem to be much calmer when the occasional headline pops up in the news feed.

One theory seems to be that MJNA is trying to work its feelers into every niche of the sector and establish itself well, and at the same time distance itself from any operation or production outlet that might potentially fall under the blows of federal law. It’s not entirely clear how useful this sort of preventive measure will be in the long run, as with the current rate of issuing stock to pay for the Phytosphere asset purchase, CannaVEST – the dedicated hemp grower for MJNA, will eventually become a subsidiary of MJNA itself.

What traders seem to want from the company is a heightened level of transparency and robust financial reports. The last few months have provided little of either of those, with MJNA reporting net income of $5.3 million, while in reality the net income less the extraordinary items was just a little over $0.5 million. The extraordinary item in question is the CannaVEST payment for the Phytosphere assets, recorded as $6 million. This sum was delivered in CANV stock that is not actively traded, is currently priced at $20.00 per share and some may even want to argue whether it’s worth the collared $4.50-$6.00 price MJNA is getting the shares at.

With no updated information on the auditing and uplisting process, limited information on the exact nature of current operations and expansions and an unsatisfactory Q1 report, MJNA may want to seriously impress with its next quarterly filing to maintain its levels and possibly return to previous highs.