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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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  • MJNA - Thoughts On The SEC Inquiry 14 comments
    Nov 26, 2013 12:59 PM | about stocks: MJNA

    MJNA is tanking hard. Beyond stop-losses being triggered, there are many potential fundamental reasons - weak Q3 results, the CANV dilution, the product safety accusations and the SEC inquiry (as of June 17th and disclosed in August through the OTC disclosure statement). It is the latter where I would like to share my thoughts.

    MJNA first announced its own internal investigation earlier this year. It began in January, as was disclosed in the Q1 filing (note that this should have been disclosed as a subsequent event in the annual report and wasn't). Keep in mind that every single director at that time has left the board with the exception of Michelle Sides, the Chairman and COO (rather alarming). Here is what was disclosed:

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    Themes: Cannabis Stocks: MJNA
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Comments (14)
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  • Michael Nau
    , contributor
    Comments (972) | Send Message
     
    Can't say I'm surprised.
    26 Nov 2013, 03:40 PM Reply Like
  • Trader888
    , contributor
    Comments (52) | Send Message
     
    Amazing all the original board members resigned, MJNA has bad luck with management we all remember the well known CEO arrested at an Alabama Rock Concert.
    26 Nov 2013, 06:36 PM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7521) | Send Message
     
    Author’s reply » He (Tripp Keber) is actually the CEO of a subsidiary. He was one that quit the Board in early March disclosed in late April. Now in litigation with supplier in which MJNA invests (OTCQB:CANV) due to failure to allegedly pay...
    26 Nov 2013, 06:43 PM Reply Like
  • ModerateMan
    , contributor
    Comments (56) | Send Message
     
    "I am glad I came out of denial last week Alan. I lost a lot of money, but at least I stopped the bleeding. Thanks again for your service."
    So, to boil it down, you actually got someone to lock in a loss on MJNA. I'm sure he'll be upset a couple years down the line.

     

    Q3 was bad, but there's promising notes to be had if you compare the sales from CanChew, RDH and Hemp Meds. We're talking increases ranging from 200 to nearly 4000 (!) %. There's issues, but honestly, anyone who just locked a loss now without waiting for Q4 with sales like that is brain dead in my books. You can talk former corrupt board members until your blue in the face, but even the mafia was able to legitimize some of their businesses.
    26 Nov 2013, 08:19 PM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7521) | Send Message
     
    Author’s reply » ModerateMan, I don't know what will happen in a couple of years. It could be that MJNA is some fantastic company and it could be just another SpongeTech. I hope to get it right, which for now is avoiding it and maybe later could be changing the position if warranted. For now, I have called it like I see it and have shared information. I don't force anyone to do anything.

     

    You can call people names, but it doesn't really help with your point. I think that ignoring other factors is at one's peril. Simply, MJNA fails the smell test.
    26 Nov 2013, 08:49 PM Reply Like
  • ModerateMan
    , contributor
    Comments (56) | Send Message
     
    Alan, it's not name-calling for the sake of name-calling, I just think someone selling off completely on this down-swing is a very uncalculated move. There's nothing to tell us the company will be dead within the next quarter, and we've seen many times now that this is a stock capable of moving from speculative interests, so why the heck would you really lock in a loss at .09 when you could have some cojones to wait it out and see .2 again, and it will happen again, I'd be willing to bet you that it happens at least 2 times within the next six months even. You're on-point with some of your points, but the idea that you're actually influencing people to lock-in losses troubles me deeply.
    27 Nov 2013, 08:36 PM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7521) | Send Message
     
    Author’s reply » Just calling it like I see it. I had a long trade recommendation and exited at .14. I never told anyone to exit at .09 by the way
    28 Nov 2013, 11:55 AM Reply Like
  • ModerateMan
    , contributor
    Comments (56) | Send Message
     
    You didn't outright say 'sell at .09" but the general content of your messages has generally been to sell/avoid this due to the risk factors, and clearly you have influenced selling as we can see from the one poster on that other website. So, to be clear, again, it's not a matter of you telling someone to sell at .09, it's more about the power of influence. If you write something negative and someone sells, that is the power of influence at work. Pretty simple to comprehend.

     

    Regarding the allegations, I think people are taking this too seriously. First of all, it's a little self-damaging when the person coming out goes on record to say: they are still using the product. Second, it seems pretty common to invoke the C-word as a way to call attention to something. Just look at how many people spread the idea that Mitt Romney would've sent jobs to China. The court of popular opinion can often be a wild place of unchecked emotion. Personally, I believe you've bought too much, too easily here.

     

    Regarding the tests: how are they not backing up MJNA? The origin of the issue here was regarding the % of CBD actually present in their products. I'm not a chemist so I can't speak to microbials or residual solvent tests but if the MJNA-release is providing accurate information on their own product, then I don't believe there's anything else they really need to expose?
    1 Dec 2013, 12:49 PM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7521) | Send Message
     
    Author’s reply » Why pin me with the low price? I was very clear regarding my change from positive to negative as the situation changed in mid-November. Last week, I was the last time I wrote about MJNA and suggested swapping into PHOT.

     

    She is NOT still using the product. She is using something from a while ago, before she left and changes apparently took place.

     

    Also, I have heard directly from her. Of course, it's just one side, but what she describes to me is very troubling, well beyond what was disclosed. She also addresses some financial issues as well. I am not at liberty to share this, but I believe that she is getting clearance from her lawyer to share more information.

     

    For whatever reason, MJNA isn't releasing tests that refute her claims (she also isn't showing tests that prove it either, to be fair). I have spoken to the owner of one of the labs the companies in the MJNA family use - they have never paid for the tests for microbials, solvents, pesticides. The part that really annoys me is that they post tests that refer only to CBD content and not these other issues and act as if they are somehow addressing the issue.
    1 Dec 2013, 01:39 PM Reply Like
  • McWest
    , contributor
    Comment (1) | Send Message
     
    dixie released a statement: http://bit.ly/1aYjY3p
    i looked up the lab tests, no residual solvent or microbial screen preformed...
    same story i have heard from trip for years, no data, just claims. their products have a ton of potential, but without better sources for oil, their stuck importing unregulated & untested oils. this will change over the next few yrs as domestic hemp production becomes available.
    27 Nov 2013, 08:43 AM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7521) | Send Message
     
    Author’s reply » Thanks, yes, the posted lab tests did not back up their claim. With that said, it doesn't prove that there is a problem with the product either.

     

    I agree - domestic hemp production could really change things. I know of one company buying RSHO from CannaVest and selling tincture made from it. He has already found a Colorado supplier and plans to switch.
    27 Nov 2013, 09:05 AM Reply Like
  • carolinew
    , contributor
    Comments (5) | Send Message
     
    Why does he plan to switch to a different supplier?
    27 Nov 2013, 08:36 PM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7521) | Send Message
     
    Author’s reply » lower cost, some green reasons too (transportation) - plus doesn't want to compete against his supplier
    28 Nov 2013, 11:56 AM Reply Like
  • TryingToMakeSenseOfItAll
    , contributor
    Comments (44) | Send Message
     
    Figures never lie; Liars always figure
    27 Nov 2013, 09:21 PM Reply Like
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