Seeking Alpha
Profile| Send Message|
( followers)  

In my previous article I had outlined a few companies creating noise in the emerging medical marijuana industry. With the end of the first quarter of the financial year 2013, these companies have shown record breaking revenues as compared to their previous quarters. A lot of this can be attributed not only to a change in their management strategies and reorganization efforts but also changing perceptions about the use of medical marijuana amongst the masses and the government, both at the state and federal levels. Let us briefly discuss the results and outline what changes and efforts are pushing these companies in the right direction.

MEDICAL MARIJUANA, INC (OTCPK:MJNA)

Earnings

This company based out of San Diego, reported on April 11th that it earned a net income of approximately $5.52 million on gross revenues of $8.45 million for the quarter ended March 31, 2013. This represented a gross revenue increase of over $3.35 million when compared to the prior quarter ended December 31, 2012. When compared to the same quarter ended March 31, 2012 this represented revenue increase of $6.68 million.

Marketing Highlights

  • DIXIE brand received national exposure in various publications, increasing public awareness capturing additional market share and addressing an estimated 90% of the addressable market by the number of available accounts in Colorado.
  • PHYTOSPHERE SYSTEMS produced high value CBD oil with concentrations of up to 85% by volume and successfully produced its first CBG (Cannabigerol) and CBGA (Cannabigerol-Acid) containing hemp oil, opening up an entirely new market.
  • CANIPA HOLDINGS finalized its terms for marketing, sales and manufacturing for 20 plus of its products for the EU and U.S. markets and received EU State Certificates of Health Safety Free Sale Certificates.
  • HEMPMEDS Online platform finished a transaction that included over 1700 online sales and marketing sites.

Leadership

The Medical Marijuana Inc. team is made up of a diverse group of highly skilled professionals in their respective fields. Despite negative articles by various authors the leaders have shown utmost professionalism and character on their part and have actively participated in enriching and growing the company's portfolio.

Addressing Investor Concerns

  • SEC FILINGS: The company has positioned itself to become fully reporting with the Securities and Exchange Commission (SEC) once the twenty four month audit history is completed by the PCAOB auditing firm.
  • DTC CHILL: The company had previously submitted all requested documentation from the Depository Trust Corporation (DTC) for the requested "chill" removal, since then the DTC has requested some additional documentation which will be submitted to them in April.

Shareholder Value

As stated in an article that was published last week, MJNA is truly for investors who see the long term value. Here is a look at the 1 yr chart of MJNA PPS. The patient investors are definitely reaping their rewards.


(Click to enlarge)

SK3 GROUP, INC. (SKTO.PK)

On April 24th, this company focusing on managing collectives for Medical Marijuana collectives throughout California announced that it generated a net income of $4.92 Million on a gross profit of $5.09 Million.

Marketing And Reorganization Highlights

  • On March 11th the group announced that they acquired Medical Greens and changed its business model to focus purely in the medical marijuana space.
  • Within a week of its reorganization under the SK3 Group; Medical Greens, contracted over $30 Million in annual licensing, management, and logistic services from collectives throughout California.
  • The group contracted over a dozen healthcare facilities and providers in Southern California to become their Medical Cannabis Administrator.
  • The group secured an aggregate of over 40 acres of real estate in Southern California to develop indoor and outdoor state-of-the-art growing facilities for the collectives it is managing.

Leadership

In an earlier Instablog post I highlighted the stellar leadership that this company has. With Mr. Kevin Allyn, as the Chairman of the Board of Directors; someone who has experience in managing Multi Billion Dollar industries, this company has an experienced decision maker and executor at the helm of its affairs.

Shareholder Value

Within a few weeks of its announcement of acquiring Medical Greens and getting the new contracts, the stock PPS showed a significant climb as displayed in the chart below.


(Click to enlarge)

With a revenue of approximately $5 Million within 3 weeks of its operations, one can only imagine the annual revenue this company will generate. With a current market cap of about $15 Million this company is highly undervalued.

There appears to be growing support from the state government for this taxable and lucrative industry; with a statement from the Lt. Governor of California regarding the same. With stellar management, total transparency along every step and excellent revenue, this stock is an investor's dream.

The gold rush is on, are you on the train?

Source: Medical Marijuana: The Gold Rush Is On