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I cover entrepreneurial topics and investing topics related to the legal medical/recreational marijuana industry.
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  • Medical Marijuana, Inc. Diversifies And Goes Abroad

    Medical Marijuana, Inc. (OTCPK:MJNA) is known as one of the more popular, and well established "weed stocks" to many investors and speculators in the medical marijuana industry and we'd like to take a look at a recent announcement involving their operation going overseas. Most companies within this space are solely focused within the United States market and laws, but Medical Marijuana, Inc. is going abroad and diversifying their business operations so they aren't so dependent on the sluggish nature of medical marijuana legalization and reformation of laws within the United States.

    In the past we have seen the good and the bad from Medical Marijuana, Inc, as many of you probably have heard, they have had some whistleblowers breathing down their necks and many investors wondering what exactly is going on. However, Medical Marijuana, Inc.'s CEO, Ted Caligiuri, isn't letting this activity slow the company down, and now we are seeing him and the company make a move for expansion. Medical Marijuana, Inc.'s corporate update, released on March 20, shows insight to the possible future of the company.

    "Medical Marijuana Inc, the industry leader in terms of products and services, is not standing still and admiring their accomplishments. Rather the company is out exploring opportunities to develop markets and relationships around the globe. Through investment or acquisition, the company seeks new products, new markets and news ways to educate and inform a worldwide audience on the health and wellness benefits of phyto-cannabinoid based health and wellness products."

    Medical Marijuana, Inc. will attack emerging markets head on as countries worldwide continue to pass medical marijuana legislation and position themselves to be poised to capitalize on the opportunity as it arises. Medical Marijuana, Inc. officially set it's crosshairs on four very different countries, and just like the United States, have very differing local laws and circumstances to consider...

    Czech Republic

    Medical Marijuana, Inc. already owns facilities to grow and process hemp in the Czech Republic, giving them a huge competitive advantage over other companies who plan to bring their products to the Czech Republic in the future. Medical Marijuana, Inc. plans to sell their Cannabidiol-based (NYSE:CBD) products, and they are looking at ways to license and expand its industrial hemp and medical marijuana products and services in the Czech Republic.

    The Czech Republic is still working on developing additional medical marijuana laws, but CBD products are currently legal to sell. Medical Marijuana, Inc. already has a network of pharmacies who sell their over-the-counter nonprescription products, and when the final legislation is finished Medical Marijuana, Inc. "expects an easy transition" from non-THC hemp-based products, to their THC medicinal cannabis lines, especially Dixie Elixirs.

    Italy

    Italy is the fifth most populated country in Europe with over 60.8 million inhabitants, which gives Medical Marijuana, Inc. a big area to expand if all turns out as planned. Italy also has a very high standard of living, high GDP, and is in the world's top ten in quality-of-life, which are all good factors to see when evaluating a new market. With the legalization of medical marijuana recently approved wihtin Italy, Medical Marijuana, Inc., and their European counterparts expect to have products available on the online Italian marketplace in April. They will be selling to pharmacies as well as directly to consumers.

    Canada

    Currently to get a medical marijuana prescription in Canada, you must need "end-of-life-care", similar to New Jersey's laws. There are anywhere from 25,000-50,000 patients in Canada, but the Liberal party has the legalization of marijuana as part of their party's platform. If it were to pass, they would need over 2,700 retail outlets to service the huge demand. Medical Marijuana, Inc. is planning to bring its full line of products into this previously untapped market. Medical Marijuana, Inc. will sell PhotoSPHERE's high concentration CBD oil to Canadian businesses through marketing and licensing agreements.

    Caribbean Islands

    In many of the Caribbean Islands, marijuana is not legal, but police generally look the other way when cannabis is being used recreationally. Many Caribbean nations want a regulatory environment that complies with the United Nations so they contacted Medical Marijuana, Inc. about their products, and how their products could help them comply with the United Nations. Medical Marijuana, Inc. helped clarify about their "seed to sale" operations, and how they work. This presents opportunities to sell over-the-counter CBD and non-THC based products in these nations.

    Our Take

    Medical Marijuana, Inc. will launch all of its products and services in these emerging markets while still investing in domestic manufacturers and distributors. They are also aggressively developing additional over-the-counter products in the United States and will bring these products to the newly emerging markets.

    The day of this announcement, Medical Marijuana, Inc. went up over 8%. Insiders and investors could not be more happy with the news, assuming all goes according to plan. However, like we mentioned before, Medical Marijuana, Inc. has made a few questionable decisions in terms of operation that has the media in a flurry and many investors a little uneasy. This announcement looks to be taking full effect soon, but you never know until it actually happens and we start seeing some progress within these countries and we keep seeing popularity for the company continue to grow. (Over the last three months their stock jumped 167% from $.104 to $.278 showing serious investor interest)

    Lastly, without diving into too much of the financial data, or lack thereof, we like to note the very high beta of 5.65 and its corresponding volatility. This is a metric we like to look at with "weed stocks" and it may be a cause for concern for some. Even though the volatility does not scare us, this combined with Medical Marijuana, Inc's history, and the fact they are on the pink sheets does. This is definitely a risky investment, but announcements like these make us and many investors more and more comfortable to throw some pocket change, at the very least, to see if this company can follow through.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OTCPK:MJNA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Tags: MJNA, long-ideas
    Mar 25 7:31 AM | Link | Comment!
  • Cannabis Stock MediSwipe (MWIP.OB) Continues To Surge In 2013

    Person stacking Euro coins, close up

    MediSwipe (MWIP.OB), which we covered last month in our Weed Stock Spotlight series, has continued to impress analysts and investors alike with it's recent surge continuing at a blistering rate in 2013. First, in case you missed our last article, MediSwipe's business can be best described as:

    "A complete line of merchant services for your medical dispensary business including, Visa, MasterCard & merchant accounts, debit & credit card transaction processing, gift/loyalty card programs and POS terminals. We understand your business, and work with private banking institutions that will streamline the application process and have you accepting credit cards with 5 business days. With MediSwipe, we can tailor a transaction processing solution to meet your needs."

    As we previously discussed, MediSwipe's biggest problems in 2012 were some serious financial struggles and it was keeping their stock from gaining much traction in their goal to grow their market cap to something that caters to more investors. Not to say these financial struggles are completely behind them, but with some recent news and initiatives, they've made progress to solving them with their strategy and performance. These three announcements have caused the share price to continue it's ascent and collect over ~160% in gains since our last article on December 22, 2012, this could continue...

    Screen Shot 2013-01-09 at 12.07.43 PM

    As you can see, this stock has been on an absolute tear; if you would have purchased approximately one month ago, you could have posted over 600% in gains. It seems investors are starting to figure out that the early financial woes of this company are beginning to fade a bit with the recent announcement of $10,000,000 in sales being posted in October-November by their payment processing subsidiary, 800Commerce. They also posted another announcement that they will be transitioning their headquarters to a new location, in Birmingham, Michigan, a city that once was involved in a lawsuit in August 2012 against the Michigan Court of Appeals for not being completely "friendly" towards medical marijuana, so to speak. However, an investor must feel that this is positive news overall due to the fact that they were previously located in southern Florida, so although they may be undertaking some costs for this move and development, they are definitely better located for a better pulse of the medical marijuana community in Michigan.

    Some may consider MediSwipe, Inc. to be right within the trenches with their new headquarters being located in Michigan. As we took a look at the current continued efforts of expanding upon the legalization of medical marijuana in Michigan that was officially passed in 2008, we'd have to agree. Five cities in Michigan have already approved city laws that allow the complete decriminalization of marijuana, including recreational use, and many experts believe that this notion will spread virally to surrounding cities and eventually push Michigan to pass state laws for recreational use. High-level marijuana activists in Michigan predict that recreational use would be legalized statewide could be conservatively expected as early as 2016, but with the media craze and gradual public acceptance of medical marijuana, it could definitely be sooner. Developing business relationships and networking within the more medical marijuana friendly communities of Michigan compared to Florida should prove beneficial in the future.

    Hot off the press, MediSwipe just announced today that they have provided mobile phone support that will help increase convenience and usage among medical marijuana patients in California and Michigan, but also include a revenue stream for them:

    "MediSwipe will receive up to $20.00 as an appointment setting fee from each participating physician on the GetRx application as well as text messaging fees for prescription alerts and appointment reminders from participating physicians within regulated jurisdictions"

    The program also seems aimed at helping serve as an informational tool for patients who may be more tech-savvy but a little less knowledgeable about the in's and out's of the medical marijuana industry:

    The GetRx appointment setting tool will provide a valuable service to new patients in legal jurisdictions seeking information on how to find a certified physician to write a medicinal prescription, filing paperwork and fees with the states to receive a patient id card, and locating a reliable and recommended pharmacy or dispensary when they have an immediate medical need.

    In summary, from a cannabis stock bull standpoint, we have gleaned a couple of reasons why the stock is going up. However, the stock has been losing some steam as of late. Micro cap stocks like MediSwipe really rely on a heavy stream of good news and press releases and MediSwipe, Inc. has found that out early, pumping out releases with every positive morsel of information. Naturally, we find this is definitely a good thing for investors, as every bit of information that helps to predict when the big moves within the medical marijuana industry will occur.

    Traditionally, we like to see a bit more of a share price and market cap when picking cannabis investments for our personal portfolios but MediSwipe is really hard to ignore with such blistering growth. If we see a dip in the next 1-2 weeks followed by new 52-week highs, we could see a favorable time to initiate a buy.

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

    Jan 09 1:02 PM | Link | 2 Comments
  • Weed Stock Spotlight: MediSwipe, Inc.

    Previously in our series, Weed Stock Spotlight, we covered media darling Medbox, Inc. (OTCQB:MDBX) and AVTC, Inc. (OTCPK:AVTC); both of which many experts believe to be in good position to thrive with their innovative products as the legalization of use of medical/recreational marijuana spreads throughout the United States. So today, we'd like to switch gears a bit and talk about a smaller company, MediSwipe, Inc. (MWIP.OB), which isn't quite at the same stage of maturity in terms of market capitalization or media notoriety but nevertheless has huge potential in the coming months. To give you a snapshot, MediSwipe, Inc. stock price has surged recently as seen below, posting +650% gain in 3 months, +275% gain in 1 month, and ~44% in 5 days:

    (click to enlarge)

    Before we get into the nitty-gritty, let's back up and look at the consumer problem that this company is trying to solve.

    The Problem:

    Many companies are attempting to provide a remedy after one of the biggest credit card processing companies for the medical marijuana industry announced that they were withdrawing from the industry as of July 1, 2012. (They would be removing Visa and Mastercard as a viable payment option) Their withdrawal further fuels a fire that had already been burning after a American Express payment processor told medical marijuana dispensaries that they are no longer offering payment-processing service in 2011.

    Dispensaries and related businesses seemingly had nowhere to else to turn but cash now... However, in this digital age, obviously it's a serious inconvenience for business owners and patients/consumers alike. Business owners take a significant amount of risk when they have thousands of dollars on hand at a business, no matter what industry. It's especially not comforting that one particular insurance company in the medical marijuana industry states the #1 insurance claim in the industry happens to be theft. (Many insurance companies make clients install high-end surveillance systems as a requirement for coverage as a result)

    Cash Isn't Necessarily The Undisputed King

    Cash is all good and fine when dealing with the black market marijuana industry; but business owners and consumers alike, with medical prescription data and complex inventory management systems, benefit from having a paper trail and flexibility of being able to pay via credit card. Additionally, the progression of payment processing via smart phones is also looming on the horizon potentially pushing cash more and more into the corner and out of use...

    The "Green" Opportunity

    MediSwipe, Inc. wants to fill the hole that other major credit card processing companies left by offering:

    A complete line of merchant services for your medical dispensary business including, Visa, MasterCard & merchant accounts, debit & credit card transaction processing, gift/loyalty card programs and POS terminals. We understand your business, and work with private banking institutions that will streamline the application process and have you accepting credit cards with 5 business days. With MediSwipe, we can tailor a transaction processing solution to meet your needs.

    MediSwipe, Inc. isn't the only company out there that is willing to navigate the treacherous terrain of payment processing in the medical marijuana industry; but they are certainly swinging for the fences by being one of the few, if not the only, publicly company with a primary function of payment processing for this industry. Of course, there's some pros and cons to being publicly traded, so let's take a look at some of the data points when considering an investment in MediSwipe, Inc.

    The Pro: Identification of Trends

    Fundamentally, upon examining their website documentation, we like the fact that MediSwipe has identified two major trends in the industry: loyalty/reward cards, mobile couponing and mobile payment solutions. Being able to handle both of these transactions as the medical marijuana industry matures is a huge upside. Their subsidiary company, 800Commerce, provides these solutions to a variety businesses with white label privileges. They are sticking their necks out for medical marijuana business owners by coming into a scenario that previous credit card processing companies refused to do business and we think these business owners won't forget it.

    The Con: Financials

    The company still isn't profitable, with a 9-month ending net loss as of September 30, 2012 of ($330,388). However, revenue is up from 2011 to 2012 at $35,222 and $50,239 respectively. The market cap and daily average volume is not attractive to most, as they are considered a nanocap, or penny stock, with an average of about $140,000/10.8mn shares traded daily and market cap is right around $6.4mn at the time of writing.

    MediSwipe, Inc. has quite the liquidity problem as it attempts to grow and develop bigger and better technology solutions for businesses and the 10-Q further elaborates on that by stating that they will need to raise money in the future to continue doing business. The CEO has had to loan the company money in the past, as well, which can be viewed as good and bad. On one hand, you have an executive that believes in the business enough to put some "skin in the game" but you also have to wonder why they are having trouble securing more funding elsewhere if this business truly "has legs".

    The 10-Q also mentions their accumulated deficit of $4,766,517, which management states is an "ongoing concern about whether or not they can continue operation". Although the numbers do look a little scary at first glance, keep in mind this is a budding technology company that deals with expensive development.

    Conclusion:

    Much like the other stocks we have covered in the medical marijuana industry, the company is dealing with the same predicament of federal law vs. state law grey area as well as a lack of sound financial numbers. However, also very much like the other companies we have identified, they have huge potential if the company can continue to keep up with the trends associated with payment processing and establish a competitive advantage with their technology.

    Additionally, MediSwipe, Inc. is going to have to come up with better ways to receive funding in the future. We definitely understand that you have to do what you have to do, so to speak, to fund a business, but personal loans from the CEO and "the unsecured convertible debentures from unaffiliated investors which may cause dilution to shareholders" are not going to cut it in the long-term if business grows substantially.

    It will be interesting to watch in the next few months if any announcements of more businesses using 800Commerce payment solutions will generate some cash from investors and they can start to close their accumulated deficit gap. If this scenario starts to happen, we can definitely see MediSwipe, Inc. getting a lot more (positive) attention from the media and we think it will be added to a lot more watch lists. We look forward to keeping an eye on MediSwipe, Inc. and perhaps consider a potential investment in the next 3-6 months if the financial conditions improve and the company successfully increases revenue in the next couple of quarters.

    MediSwipe, Inc's most recent 10Q can be found here for further research

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

    Dec 24 9:19 AM | Link | 3 Comments
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