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Alan Brochstein, CFA
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Alan Brochstein, CFA has worked in the securities industry since 1986, primarily with the responsibility for managing investments in institutional environments until he founded AB Analytical Services in 2007 in order to provide independent research and consulting to registered investment... More
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  • Medical Marijuana Inc.: New Offering Disappoints 4 comments
    Jul 16, 2013 11:59 AM | about stocks: MJNA

    Medical Marijuana Inc. (OTCPK:MJNA) is rapidly losing the interest of investors. The days of dominating the leader list at Investors Hub are long gone, and volume languishes. The company apparently struggled to sell its new CanChew CBD gum and has engaged SA contributor Perry Coleman to write articles about its products on the examiner.com, which isn't an especially trafficked site (#283 in the U.S according to Alexa).

    I don't have much of an update since my last article, which I wrote four weeks ago as the stock broke .10 briefly. The stock rallied rather sharply but has been drifting back subsequently, currently trading in the middle of its .095-.145 range since then at .12. Unlike last quarter or even the quarter before, MJNA has been quiet about the recently completed quarter. I am very surprised, but the company has yet to clear up the confusion about its authorized share-count. The filings that I mentioned in my article became available to the public shortly after it was published, and we learned that all of the increases were nullified. You can access these here. I am not sure how this will play out. The company needs a higher authorized share-count, and it may just have one now (5 billion instead of 950mm).

    MJNA's current products are Dixie Botanicals and its recently launched CanChew CBD gum. Both of these products are nutraceuticals that provide CBDs. I have spent some time evaluating the cost per dose of 10mg, and it works out to about $3-4, depending on the dosing and if discounts are available. The company just launched a new product, which is a more concentrated one. Here is Mr. Coleman's look at "Real Scientific Hemp Oil". The product is now available for purchase. They are running a "special" of $699 for a single order (with 10 tubes of 10g each) or $3600 for a six-pack. The product includes an 18% concentration of CBDs, for a total of 1800mg (or 180mg per tube). This works out at the six-pack level to 10,800mg, which is 1080 doses. Dividing this by the discounted price, it works out to $3.33 per dose (again, assuming 10mg). I am not sure how this is value at all considering the large investment one must make. The Dixie Botanicals Dew Drops, which have a total of 500mg, costs $160. This works out to $3.20 per 10mg. There have been questions about the quality of the Dixie Botanicals products, with accusations of substantial underestimates of potency. Perhaps RSHO doesn't have this shortcoming.

    I continue to expect MJNA to languish for all the reasons I mentioned in June. My target remains about .05.

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

    Stocks: MJNA
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Comments (4)
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  • Rolling O Research
    , contributor
    Comments (328) | Send Message
     
    Yeah, that pricing is a bit off, especially as it appears to me that the RSHO is aimed at manufacturers of products that contain CBD.

     

    If the raw, active ingredient is $3.33 per dose, that would make the cost of a finished product at least $4, and put the retail price at $6 -$8 ... per dose.

     

    Seems way too high to me.
    16 Jul 2013, 01:52 PM Reply Like
  • wagonwheel
    , contributor
    Comments (137) | Send Message
     
    $3,600.00 for a six-pack.......I just do not get it.....Who on earth is going to spend that kind of money on that kind of stuff, when you can go and get 1 1/2 lbs of Medical Grade MJ for the same advertised retail price in any MMJ Dispensary if you have your card.

     

    MJNA is in my opinion just about as close to hitting rock bottom as any company I have ever known.....
    Where is the transparency? Where is the explanations that you would think that the current stock holders are due?

     

    When I read one of your earlier articles Alan where you predicted $0.05-.06 PPS, I thought you were way off base....I am now wondering how they will hold that when they get there, and I do believe that they will get there sooner than later....
    17 Jul 2013, 02:07 PM Reply Like
  • Rolling O Research
    , contributor
    Comments (328) | Send Message
     
    If you look at the RSHO web page, they appear to be trying to sell it as a cure for cancer, without saying so.

     

    Note the first article on the RSHO web page:

     

    http://bit.ly/18oc2tW

     

    I think I was wrong in my first message describing the CBD oil in these syringe packs at for use as active ingredients in other products. They're actually trying to sell to folks who want to take large daily doses of CBD, like those who take the Robert Simpson Oil for cancer.

     

    Notice on the following page that they talk about "Convenient Measured Delivery of your Daily CBD". They're pushing this at patients:

     

    http://bit.ly/18oc2tX

     

    Maybe it will work. Maybe it won't.
    17 Jul 2013, 03:55 PM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7509) | Send Message
     
    Author’s reply » $3600 for the 60 day regimen that they suggest
    17 Jul 2013, 04:16 PM Reply Like
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