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Ashraf Eassa
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  • Medical Marijuana: Can We Stop The Bullying? 8 comments
    May 3, 2013 8:16 AM | about stocks: MJNA

    Excuse me for being a little bold, but I believe that Medical Marijuana Inc (OTCPK:MJNA) went too far in its latest press release. In this article, I have no plans to discuss the legitimacy of the business, but I do want to point out that the company's latest release serves to highlight why investors should be skeptical of this company. Forget the lack of audited financials, put aside the fact that their "big" revenues may be paid in questionable CannaVEST stock currency, and even forget the fact that the company trades on the pink sheets and is subject to the whims of the retail traders. Medical Marijuana's recent threats to sue Seeking Alpha contributors seem completely and utterly misplaced, and this "threat" is enough to start asking some serious questions.

    Why Does It Damage Credibility?

    I realize that the article posted by Infitialis was powerful, and perhaps slightly over the top, but it at the very least got investors to dig more deeply into this name. Our own Alan Brochstein a well respected CFA who by himself is likely more well known than MJNA, did some detective work that even puts the Infitialis collective to shame on this particular name. If it were not for that original article, Alan - and many others - would never have even bothered to learn more.

    And that's the problem. Medical Marijuana Inc's stock price was happily being bid up by retail investors after it reported a "huge" revenue increase. See, until Infitialis and Alan came around, nobody seemed to even question these financials, taking them for granted. As a result, this unknown penny stock, which had up until then traded for $0.02/share, suddenly became a $300M behemoth. Yowzers! Of course, the cat is now "out of the bag" so to speak, and the stock is now trading at less than half of its hysteria-peaks, but even so, it is still a $155M company!

    Anyway, so back to the topic at hand. I believe MJNA is trying to scare anybody from writing negatively about the company. Unfortunately for the company, it needs to get used to the fact that if you're trading on public markets and continuing to dilute your share count (meaning you are selling more shares to the public), you need to be accountable. That means people will always be trying to sniff out deception and fraud because people don't like to be ripped off. And if somebody notices something funny, then it is within their rights to point it out.

    Alan's detective work points out that the majority of the Q4 sales may have been, erm, in the form of CannnaVEST stock which, for all we know, could be as valuable per share as monopoly money given how infrequently it trades. So instead of MJNA coming out and refuting this and perhaps proving that CannaVEST isn't just a shell company, and that the stock is indeed worth more than monopoly money, it threatens to sue all while going on about how "comfortable" it is with this all stock deal.

    So, I would now like to formally respond to MJNA's threats of "Seeking Alpha Writers Litigation", statement by statement.

    Dear Medical Marijuana...

    MJNA opens with,

    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.

    That's right, so because a bunch of investment newbies trading penny stocks believe that the big-bad SA authors should be "sued", it's time to waste shareholder money on a lawsuit. Am I reading this correctly?

    Next up,

    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).

    Great. Could you tell us how much this meeting cost the shareholders? Could you express it as a % of cash flow (CannaVEST stock is not cash)?

    The article(s) were a blatant attempts, albeit briefly successful, to manipulate our stock price, to damage our shareholders and to create fear and doubt about our credibility.

    What interest would I have to manipulate your stock price? I've never been short your stock, I didn't want to "buy it cheaper" (as I have never been long, nor will I ever be long), and while I do get a few bucks from page views, I could certainly do better on that front by writing about a larger name. Oh, and the death threats from the masses are really nice, too.

    Did it ever occur to you that my articles were an attempt to keep INNOCENT investors from getting burned? If you're an experienced trader with high risk tolerance, then you can handle the daily gyrations and extreme risk that comes with trading penny stocks. But if you're just a typical investor then you have NO BUSINESS risking your money on something that has so many red flags. Sorry, Ms. Sides, but until you are filing audited financials, your business is too risky for all but the most experienced penny stock traders.

    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.

    Complete nonsense! I have never written positively on MJNA, nor have I ever profited from a move in either direction off of your firm's equity, as per my repeated disclosures.


    If MJNA is to be taken seriously as a company, then it needs to work on refuting negative claims with facts, not threats. MJNA now comes off as though it is bullying individuals such as myself who publish our opinions in the good-natured hope that people who don't know what they're doing don't get burned. I'm not short MJNA, I've never been short MJNA, and I am not personally or professionally involved with anybody who stands to profit from the share price decline. And, as per my disclosure, nobody is paying me to write about the company.

    I'm just a guy who doesn't like BS, and threatening to sue a guy on the internet for publishing his opinions is as BS as it comes. Prove yourself legitimately, MJNA. Bullying people only makes you look worse.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: I have never been short MJNA, and I never will be either long or short the stock, or any of its derivatives should they ever trade on public or private markets.

    Themes: short-ideas Stocks: MJNA
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Comments (8)
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  • Great response! I am still waiting for the company to point out a single factual error in any of my articles. I wonder if they endorse Perry Coleman's numbers - he created a model of the company doing $26 billion in sales in 2017 with a net-income margin of 66.5% in January. It seems like they are blaming Seeking Alpha for his pump, when they later called him "our author". Very selective endorsement.


    I don't like B.S. either. I write under my name. I may not be the sharpest tool in the shed, but if I were going to participate in a conspiracy, I would likely not do so publicly. Also, if I were motivated by page-views, I would have just written fluff pump pieces - more hits, more love.
    3 May 2013, 01:28 PM Reply Like
  • Author’s reply » Thanks, Alan. They're running scared because they know sooner or later the jig will be up.
    3 May 2013, 03:34 PM Reply Like
  • I am looking forward to May 15th. In the meantime, I have spent a little time looking into KannaLife - what a joke!
    3 May 2013, 03:38 PM Reply Like
  • Ashraf, its comments like these that get people riled up. You are not implying or alleging, you are passing off this statement as inevitable fact and have done so repeatedly by calling the company a "fraud". There is plenty of reason for MJNA to defend itself publicly and possibly legally.


    Infatalis' article was not "powerful" it was just well timed, days after MJNA's stock went parabolic and received a lot of attention. In fact, the issues with Mr. Llamas were long disclosed before the article was even published. The part about Ms. Sides was not only embarrassingly bad search engine journalism but it may have legal consequence.


    Regarding the insistence of fuzzy numbers in the reports, as far as I can see the reporting is GAAP mark-to-market:


    And, the premise that you are out to help the "INNOCENT investors from getting burned" is a slippery slope upon which to argue.


    I'm all for arguing that the market cap is very high in relation to sales/assets but I'm not just ready to call MJNA a "fraud" without more compelling evidence than "virtual journalism."
    6 May 2013, 01:35 AM Reply Like
  • Thank you Ashraf, I always enjoy hearing your opinion on any stock as I find it very well respected no matter what position you take or the controversy behind it
    3 May 2013, 01:35 PM Reply Like
  • Dear MJNA, Iam a potential investor and I have a few questions.


    1. Does MJNA rent or own the office space @ 2665 Arianne Drive, San Diego, CA?
    2. How many square feet is the space?
    3. How much is the rent/mortgage?
    4. How many employees on site?
    5. What are days and hours of operation?
    6. Is the company name and hours of operation clearly printed on the front door of the office?
    7. Is the company name listed with the other companies in the complex on a community or "common" signage provided by the complex?
    8. Is your office open to the public?






    Those questions don't seem out of bounds to me.


    your thoughts?
    17 May 2013, 11:16 AM Reply Like
  • They are moving, Sparkt_99
    17 May 2013, 12:40 PM Reply Like
  • moving in out out? moving out or closing shop? moving where? moving what? investor's cash. to where? your pockets?


    moving what? reporting dates? LOL
    17 May 2013, 02:33 PM Reply Like
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