Alan Brochstein's  Instablog

I think a big question about investing in the inevitable proliferation of medical marijuana and hopeful advancement of legalized recreational marijuana is who the winners will be. Some companies, like Hemp, Inc. (HEMP.PK) and Medical Marijuana Inc. (MJNA.PK), have convinced many investors that they will be, but these companies have shady financials, to say the least. As the federal regulatory landscape becomes more clear, I am hopeful that investors will have real choices. Already Privateer Holdings, a private equity firm that owns Leafly.com, is taking steps to add some legitimacy to the investment arena. My guess is that there will be plenty of people who will make money, like this guy, who demonstrates how to convert marijuana into extracts in this informative video.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

MJNA has issued a press release. I want to address several of the aspects. There is one key line (in the conclusion) that I think they should re-read:

"Instead we will let our actions, products and revenue speak for themselves. The only way to combat these individuals is with success."

This follows this:

SEEKING ALPHA WRITERS LITIGATION:

I am aware that there are those who feel that litigation should have been commenced by now against Seeking Alpha blog writers that have published numerous negative articles attacking the Company and its management. Some have suggested that our failure to do so is negative reflection on MJNA. I have personally met with litigation counsel to go over the defamatory statements that were presented by Seeking Alpha writers in several of the article(s). The case is clearly laid out. However, it is also more complex than just pursuing defamation claims against a writer and a website as some have stated. The article(s) were blatant attempts, albeit briefly successful, to manipulate our stock price, to damage our shareholders and to create fear and doubt about our credibility. The actions from this group of individuals commenced by the parties posting numerous positive articles about MJNA all while knowing these same individuals would then collectively post those defamatory article(s) right before our quarter financial posting to significantly drop the stock value for nothing more than their personal gain. MJNA had no part of these actions, did not authorize, benefit, participate or have knowledge of what was being written.

These individuals perform the same actions each quarter and shamefully boasted about their success. Our litigation attorneys are gathering relevant information, will assess the possible claims against all responsible individuals. The Company will move forward based upon the advice and conclusions of our legal counsel.

All we can ask of our shareholders is that you perform your own due diligence to find out the complete facts versus reacting to postings by individuals who are obviously manipulating the stock value for dubious reasons.

I don't know if they consider me among those making "defamatory statements", but I would point out that they corroborated my view of how they booked the first installment of CANV stock. I have not received a single request for a correction to anything that I have written and encourage the lawyers or company representatives to point out any material misstatements I have made. I also want to point out that I post with my real name and have no relationship whatsoever with Infitialis. I have communicated with Ashraf Eassa, but I have never colluded with him in any way, and he, like me, posts with his real name. We are both leading contributors to Seeking Alpha and share a common view about the lack of transparency at MJNA and its lack of value as an investment, which we have shared as our opinions. Further, I have no stake in MJNA. My motivations have been clearly and completely disclosed.

MJNA is not telling the truth at all when it discusses conspiracy of Seeking Alpha publishing positive and then negative articles. I am easily found by email, address or even phone number, and I encourage anyone to contact me if there is any doubt on this matter. I especially encourage the company to contact me, as I would like to know specifically which statements I have made are not true. I will immediately correct any misstatements or factual errors.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Every article I write about a MJ stock gets posted in full over there, even on moderated boards. Meanwhile, they deleted this comment:

Buxley, you raise a good point about the quality of sales. In my last Seeking Alpha article (http://seekingalpha.com/article/1369511-the-haze-lifts-96-of-medical-marijuana-inc-q4-sales-from-questionable-transaction) I posted a comment regarding what's going on at CANV. They disclosed in mid-April:

"To date, our operations have consisted of selling $1,275,000 of raw Cannabidoil product to third parties, such raw product obtained by us through inventory acquired from PhytoSPHERE Systems, LLC and contracts with various suppliers in Europe." (the date was April 16th and this means that they have not been very successful in making the sales - MJNA booked sales to them, but they must be sitting on inventory)

It's bad enough that MJNA counts worthless CANV stock as "sales" (CANV was worth .05 per share when Mona and his group bought the shares in November - $5 is insane), but this appears to be a shell game. MJNA sells to CANV, and CANV can't sell it. Steve Kubby shared on an interview that the prices for CBD oil are way lower than what is discussed (presumably by MJNA, though he doesn't say that). Great interview (starts at 11 minutes): http://www.youtube.com/watch?v=e6zn6HvoNpw

Anyone in contact with MJNA management should ask what's going on here. Why isn't CANV making the sales? CANV has no real money or assets - it they can't sell the CBD oil, then the stock is worthless. Don't be fooled by CANV trading price - insiders own almost all the stock (it hardly trades any shares either).

By the way, I have said that if MJNA can hit its guidance, the stock is cheap (but not if their guidance is shenanigans like taking worthless stock). I know you guys read headlines and descriptions of what others say I say, but I am just digging into the financials. Many of you have come to understand where I am coming from, and I hope that those who disagree can tell me where I am wrong. I would love to get behind this company, but they need to be more transparent about their financials and their ownership structure (i.e. why HDDC got all those shares and has control).