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Medical Marijuana Inc.: New Offering Disappoints

|Includes:Medical Marijuana, Inc. (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