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Clarkjam
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Civil Engineering student First time investor Analytical, research oriented individual
  • Dissecting The Marijuana Market - Possible Approach Tactics 7 comments
    Mar 6, 2014 9:48 AM | about stocks: PHOT, NVLX, MDBX, FSPM, MCIG

    Being a first time investor, I have been researching for months on my own and have found Seeking Alpha to be a legitimate form of information. I am new to this game and would like to start off by saying that I'm more than open to any criticism, comments, and advice coming from any seasoned investor out there.

    Holding out on the recent marijuana surge in the stock market has been incredibly hard to do after watching stocks like $CANV, $GWPH, and $VAPE make surprising leaps and bounds. Despite recent articles about how marijuana stocks may have rallied too far too fast, I'm not buying into this negative hype.

    I want to invest in the marijuana industry because it is an industry I feel I understand and has huge potential now, and further down the road. I suffer from Crohn's disease and have experienced first hand the dynamic capabilities and power of marijuana. Pot isn't what it used to be.

    Now for my investment proposal:

    I have narrowed down the marijuana industry into different stock categories.

    1) Research and Development

    2) Facilities and organization tactics

    3) Transportation and dispensing

    4) Consumption

    From what I have researched, it seems to be a good idea to invest in multiple forms of an industry and not just in one sole company involved in a certain field. In my opinion, among these categories above there exists some pretty well established companies. I however see myself as more of a high risk - high rewards type individual and want to invest in companies that possess a bigger upside.

    Since I do not have a large initial investment capital, I was going to start off investing small ($2-3K) and holding on for about 5-10 years. The stocks I have in mind are as follows (prices as of 3/5/14 close):

    Nuvilex ($NVLX) $0.42 : Research and Development

    - "Live Cell Encapsulation" technology.

    - Treating Pancreatic Cancer, Breast Cancer, Diabetes

    FusionPharm Inc. ($FSPM) $8.70 : Facilities/Organization tactics

    - Sustainable, high impact produce

    - Controlled Environment Agriculture (efficient, stackable growroom designs)

    GrowLife Inc. ($PHOT) $0.38 : Facilities/Organization tactics

    - Owns 7 hydroponics stores around the U.S.

    - Equipment and horticulture supplies such as their Photron growing system, Stealth Grow LED lighting, and SG Sensors for monitoring growroom environment.

    mCig ($MCIG) $0.65 : Consumption

    - Herbal electronic cigarettes hoping to reap the benefits of two major trends; electronic cigarettes and marijuana

    Medbox Inc. ($MDBX) $30.70 : Transportation/Dispensing

    - High security medical dispensing machines.

    - Adapted with finger print biometrics

    Advanced Cannabis Solutions ($CANN) $48.38 : Facilities/Organization

    - Leases equipment and commercial real estate for grow facilities

    - Commercial services

    These are the companies I have narrowed down within my price range and that I feel have a promising outlook on the future. I've heard plenty of negative things about penny stocks but I'm still not turned off from investing in any of the above companies.

    Depending on how this week turns out, I plan to invest soon and was thinking of starting out with $2-3K dispersed between $PHOT, $MCIG, and $NVLX...Or dump it all into $MDBX or $FSPM.

    Thoughts?

    James Clark

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Comments (7)
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  • amjoda3
    , contributor
    Comment (1) | Send Message
     
    Stay Away from $NVLX
    6 Mar, 03:56 PM Reply Like
  • etaydinkol
    , contributor
    Comment (1) | Send Message
     
    I like your article, I know that this is a new field but any idea how long all these companies in business?
    7 Mar, 09:43 AM Reply Like
  • remix20
    , contributor
    Comments (328) | Send Message
     
    amjoda, stay from NVLX away why? A few details please. A better suggestion would be; stay away from Medbox b/c they are suspected to be purveyors of fraudulent accounting and their business plan is not as strong as the others on your list.

     

    Clarkjam, of your list, I think PHOT is the best buys right now with a good risk/reward ratio. Also at .39-.41 entry, you likely aren't getting in too high that you will have regrets in the short term or the long term. Good luck sir.
    7 Mar, 11:45 PM Reply Like
  • Clarkjam
    , contributor
    Comments (3) | Send Message
     
    Author’s reply » etaydinkol, I'm not sure how long each company has been in business but I imagine most are fairly new.

     

    amjoda, yes please enlighten us. Should we stay away so you can buy up all the stock?

     

    remix, I almost hope this fraudulent talk causes the price of Medbox to go down so I can buy in. I'm imagining these Medboxes are going to be the go to method for purchasing cannabis...Just wait for Washington to get going too. The first recreational marijuana license was issued in Washington on March 5th, 2014.
    (http://bit.ly/1efvEhq).
    And I'm glad you agree about $PHOT. I like what I hear about them and the fact that they already have 7 stores makes me less worried. They also have some interesting products like their SG Sensors system.
    9 Mar, 03:51 AM Reply Like
  • remix20
    , contributor
    Comments (328) | Send Message
     
    Clarjam, I once saw potential in Medbox as well but have done a 180 since. I don't think they are involved in Colorado and up to this point do not have a single operating machine anywhere that I have read. On top of that, I am highly skeptical that any MMJ vending machine dispensing will happen in the US anytime soon.

     

    I can't help but think of the restrictions abound in the US concerning cigarette vending machines and how MMJ vending would be less restrictive? While the machines could eventually find their way into hospitals or stores like Walgreens, this seems far into the future, beyond what I consider eligible for investment at this time.

     

    It seems their is a pending lawsuit concerning fraudulent accounting accusations, and I witnessed the company's president boldly lie about being the only fully SEC reporting company in the sector. I had already sold the stock previous to this happening but this gave me even more confidence that I had dumped the company at the perfect time.

     

    As far as PHOT, if you like the retail operations and equipment prospects that is good. I would encourage you though to consider that this segment of the business is small potatoes compared to the financing agreements the company is initiating with the GIFT program. I feel the company is playing their cards better than most others in the sector at this time.

     

    Good luck sir.
    9 Mar, 04:57 AM Reply Like
  • Clarkjam
    , contributor
    Comments (3) | Send Message
     
    Author’s reply » Remix, valid point. I never thought of comparing the fact that cigarette dispensing machines do not currently exist so why would marijuana vending machines take off? Although cigarette vending machines did exist at one point... and I believe the only reason they stopped was because people realized the health concerns associated with cigarettes. Marijuana on the other hand, has only proven beneficial to ones health and is used by millions of people worldwide for both medicinal and recreational use.

     

    I can see how the US government would not want to advertise the sale of something that has be proven to cause cancer in users. However, I would like to hear their reasoning behind putting a ban on a high security machine that dispenses something that has been proven to fight cancer causing cells...

     

    I feel people struggle to see the potential of the marijuana industry because we have been systematically mislead by the government for the past 70 years to believe things that simply aren't true. I don't mean to go on a rant, I just think you cannot compare marijuana to alcohol, tobacco, or any prescription medication because it is simply not the same thing. We have been living in a society that currently classifies marijuana as a schedule 1 substance. The same category as Heroin.

     

    This is from the DEA website: http://1.usa.gov/Vi75v4

     

    "..Schedule I drugs are considered the most dangerous class of drugs with a high potential for abuse and potentially severe psychological and/or physical dependence. As the drug schedule changes-- Schedule II, Schedule III, etc., so does the abuse potential-- Schedule V drugs represents the least potential for abuse.

     

    Schedule I

     

    Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse. Schedule I drugs are the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence. Some examples of Schedule I drugs are:

     

    heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3,4-methylenedioxymeth... (ecstasy), methaqualone, and peyote

     

    Schedule II

     

    Schedule II drugs, substances, or chemicals are defined as drugs with a high potential for abuse, less abuse potential than Schedule I drugs, with use potentially leading to severe psychological or physical dependence. These drugs are also considered dangerous. Some examples of Schedule II drugs are:

     

    cocaine, methamphetamine, methadone, hydromorphone (Dilaudid), meperidine (Demerol), oxycodone (OxyContin), fentanyl, Dexedrine, Adderall, and Ritalin"

     

    According to the DEA, cocaine is less addictive than pot???
    To me, this classification system doesn't add up and is proof that what we used to know about marijuana was not entirely true.
    9 Mar, 10:28 PM Reply Like
  • remix20
    , contributor
    Comments (328) | Send Message
     
    Your absolutely right on the Schedule 1 front. It is absolutely ridiculous that you can buy alcohol near about anywhere you would want, but yet people are going to prison for possession of a bag of near harmless plant matter. It is a shameful predicament that has been perpetuated for far too many decades and we can only hope that it will end soon.

     

    I for one sign every petition for the cause that I can find and use my social media accounts to further the cause.
    10 Mar, 01:16 AM Reply Like
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