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Since we recommended buying Medical Marijuana (OTCPK:MJNA) it's up 89%. Other pot stocks are also doing well, such as Cannabis Science (OTCQB:CBIS) up more than 2% today. There wasn't any news release today that would cause the stock to rise so sharply. We suspect that the company has been discovered as a profitable investment for reasons we've outlined before, as well as a growing interest in the budding Marijuana industry.

We couldn't write a specific article on MJNA because it was still a micro-cap, but now its market cap is 148M. Currently it's trading at .202 which is its current all time high. The stock has proven itself as a true small cap representative of a new growth industry.

Many traders know the mantra "Don't buy the high" which has solid foundation. But we believe Medical Marijuana is going higher, and here's why.

Earnings

Unlike other companies in the pot business, Medical Marijuana has solid revenue and prospects for revenue growth. Their gross revenues increased 1,100% from the previous year quarter.

Medical Marijuana Inc (PINK: MJNA) augmented 1.09% to $0.177 on a traded volume of 1.61 million shares. The Company pre-announces its fourth quarter earnings. The net income was $3.39 million in the fourth quarter. The gross revenues were $5.10 million, an increase of $4.5 million and over 1,100% from the previous year quarter. The Company provided an update on the expansion of its Red Dice Holdings Dixie Elixirs & Edibles brand nationally and in Colorado through additional market penetration and product development.

Their return on average assets is 59% which is huge, compared to most publicly traded companies. For example Microsoft (NASDAQ:MSFT) has a return on average assets of 14% for 2012. Google's (NASDAQ:GOOG) return on average assets is 12%.

Google Finance reports institutional ownership of 0%, a very encouraging sign for growth, as an institutional purchase could drive the price higher.

Financials like this are hard to find.

Patents

The company owns a portfolio of patents encompassing multiple vertical markets, but with a focus on medical marijuana (vs. casual use).

MJNA provides over 50 proprietary and patented cannabinoid "delivery methods" that are more "socially and medically acceptable" than smoking. Finally, MJNA services include the licensing of its proprietary testing, genetics, labeling, and packaging, tracking, production and standardization methods for the medicinal herb industry.

Industry gaining support

In Pennsylvania, a state senator has proposed a Marijuana legalization bill.

State Sen. Daylin Leach, a Democrat representing Montgomery and Delaware counties, announced plans Tuesday to introduce legislation that would legalize marijuana in Pennsylvania.

He has two co-sponsors on the bill -- Democrats from Philadelphia and Pittsburgh -- and plans to introduce the bill within the next week for the 2013-14 legislative session.

Leach during the Legislature's 2011-12 session introduced Senate Bill 1089 to create a medical marijuana program, but the measure did not make it out of committee.

60 Minutes did a segment on the industry, showing to average TV viewers some of the professional business aspects of the industry. Shows like this are starting to spread knowledge of the trend to the mainstream. While the movement to legalize has a cult following, it still is not part of the mainstream culture.

The risks

Of course, being a fairly new company there are a number of things that could go wrong as is the case with anything new. Also, Marijuana is still illegal on a Federal level. While the Obama administration has promoted a hands-off policy regarding states legalization, that could change.

Long MJNA

If you'd like some exposure to this budding industry, we believe Medical Marijuana is the best play. It has the most potential for growth and is positioned to capitalize on further legalization measures.

It's hard to say how high MJNA might go, we've heard analysts target $1 in a year. To get in at a good price, the strategy here would be to buy on dips (not at its current highs). Today's high proves that it's not like competitor companies whose stocks have lingered.

Source: Medical Marijuana Proves Itself As Viable Investment