12 Marijuana Stocks For Your Do Not 'Buy And Hold' List - Part VII

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Includes: ACGX, ACOL, AERO, AGTK, AMMJ, ATTBF, AVTCQ, BAR-OLD, BAYP, BLPG, BNRDF, BRDT, BTFL, CANL, CANN, CBDS, CBGI, CBIS, CGRW, CHUM, CIIX, CNBX, CVSI, DSCR, EAPH, ECIGQ, EDXC, ENDO, ENRT, ERBB, FITX, FSPM, FWDG, GBLX, GECC, GLAG, GRCU, GRNH, GTSO, GWPH, HEMP, HMKTF, ICBU, ICNM, IJJP, IMLFF, INSY, LATF, LGBI, LNGG
by: Anthony Cataldo

Summary

I believe that I have a (nearly) complete listing of the universe or population of (primarily U.S.-based) marijuana stocks at N=84.

I will use this data base, adding new entrants, to examine components of this very interesting sector of the economy.

Fundamentals remain irrelevant – whether sold by management or issued via toxic convertibles, stock promotions will resolve near-term working capital shortfalls.

Unless you have time to devote to a significant amount of research, trade the “sector,” not the “stock.”.

My focus is on capital preservation, first, and abnormally high returns generated from event dates, second.

(See Securities and Exchange Commission (SEC) trading halts for Advanced Cannabis Solutions, Inc., Cannabusiness Group, Inc., Fusion Pharm, Inc., Growlife, Inc., and Petrotech Oil and Gas, Inc., and where the SEC has warned investors about stocks using email and FAX spam, where insiders own large amounts of the stock, and where false or exaggerated press releases have been paid for and issued by the firm.)

Stock Promotions

We already know that financial analysts assist in pump and dump schemes, for a fee, from a Seeking Alpha article exposing this practice. This descriptive extension and examination into marijuana [MJ] stocks was inspired by another Seeking Alpha [SA] article, where I summarize stock promotions for MJ stocks. You might find the frequency, in some cases, to be remarkable.

My focus remains, primarily, on those firms accessing the U.S. capital markets. It is a near certainty that more firms will enter the MJ sector or segment of the economy between now and November 2016 ballots measures for legalized marijuana use in additional U.S. states. Risk tolerances vary, but, generally, the vast majority of these stocks, while good day-trades, and are not buy-and-hold stocks for a long-term portfolio, at least not at this point in time.

Marijuana Index

Marijuana Index is greatly increasing their data base (see below). Note that their seasonal pattern for their index value is comparable to my bar graph of 52 week highs. Both graphics are provided, below, with theirs in green [LINE] and mine in black [BAR].

Marijuana stocks peaked in March 2014 with the MMPR. Note that these peaks did not "stick."

Source: http://marijuanaindex.org/

The 52 Week High Bar Chart

The below chart illustrates the 2014 52-week highs for N=84 marijuana stocks. The message is a clear one, buy and sell the "sector." A sale in March 2014 during or after the MMPR would have represented the most favorable exit event period with a "sell on news" trading strategy.

The November 2014 ballot measures or elections were of little or no consequence. Recall that Oregon, Alaska and D.C. were approved for decriminalization, but are relatively low population states or jurisdictions. Again, it was the March 2014 Canadian MMPR that moved the marijuana stock prices.

List of ([n=12+n=12+n=12+n=12+n=12+n=12+n=12] = [N=84]) Marijuana Stocks

Again, and just as was the case of Part I, Part II, Part III, Part IV, Part V, and Part VI, the stocks are listed in alphabetical order of the ticker symbol. This series began after my first marijuana stock article in SA. The table has, again, been designed so that it captures a significant amount of data, and you can copy/paste and print it out and use it to formulate your own opinions on these stocks. The first 12 stocks from Part I have an roman numeral one or "I" prefix in the far left column, the second 12 stocks have a roman numeral two or "II" prefix, the third 12 stocks have a roman numeral three or "III" prefix, the fourth 12 stocks have a roman numeral four or "IV" prefix, the fifth 12 stocks has a roman numeral five or "V" prefix, the sixth 12 stocks has a roman numeral six or "VI" prefix, and the seventh 12 stocks have a roman numeral six or "VI" prefix. The below table, also, contains the data from which the above graphic was developed:

Part

Name

Ticker

NV

DE

CAN

WC

PR

VII-1

Alliance Creative Group, Inc.

(OTCPK:ACGX)

1

0

0

1

138

II-1

Acology, Inc.

(OTCPK:ACOL)

0

0

0

0

22

II-2

Aerogrow International, Inc.

(OTCQB:AERO)

1

0

0

0

67

II-3

Agritek Holdings, Inc.

(OTCPK:AGTK)

0

1

0

0

0

III-1

American Cannabis Company, Inc.

(OTCPK:AMMJ)

0

1

0

1

0

II-4

Abattis Bioceuticals Corp.

(OTCQB:ATTBF)

0

0

1

1

5

V-1

AVT, Inc.

(AVTC)

1

0

0

1

19

II-5

Bayport International Holdings, Inc.

(BAYPD)

1

0

0

0

13

III-2

Blue Line Protection Group, Inc.

(OTCPK:BLPG)

1

0

0

0

0

IV-1

Bedrocan Cannabis Corp.

(OTC:BNRDF)

0

0

1

1

0

I-1

BreedIT Corp.

(OTCQB:BRDT)

0

1

0

1

13

IV-2

Monarch America, Inc.

(OTCPK:BTFL)

1

0

0

0

0

III-3

CannLabs, Inc.

(OTCPK:CANL)

1

0

0

0

0

V-2

Advanced Cannabis Solutions, Inc.

(OTCQX:CANN)

0

0

0

1

14

III-4

CannaVest Corp.

(CANV)

0

1

0

1

3

V-3

Cannabis Sativa, Inc.

(OTCQB:CBDS)

1

0

0

0

0

I-2

Cannabusiness Group, Inc.

(OTC:CBGI)

1

0

0

0

13

V-4

Cannabis Science, Inc.

(OTCPK:CBIS)

1

0

0

0

377

IV-3

Cannagrow Holdings, Inc.

(OTCPK:CGRW)

0

1

0

0

0

V-5

Chuma Holdings, Inc.

(OTC:CHUM)

1

0

0

0

0

VII-2

Chineseinvestors.com, Inc.

(OTCQB:CIIX)

0

0

0

0

17

V-6

Cannabics Pharmaceuticals, Inc.

(OTCQB:CNBX)

1

0

0

1

1

VII-3

Discovery Minerals, Ltd.

(OTCPK:DSCR)

1

0

0

1

38

IV-5

Easton Pharmaceuticals, Inc.

(OTCPK:EAPH)

0

0

0

0

124

IV-6

Electronic Cigarettes International Group, Ltd.

(ECIG)

1

0

0

0

6

V-7

ENDEXX Corp.

(OTCPK:EDXC)

1

0

0

0

172

VI-1

Endocan Corp.

(OTCPK:ENDO)

1

0

0

0

31

IV-7

Enertopia Corp.

(OTCQB:ENRT)

1

0

0

1

50

I-3

American Green, Inc.

(OTCPK:ERBB)

1

0

0

0

323

III-5

Creative Edge Nutrition, Inc.

(OTC:FITX)

1

0

0

0

300

V-8

Fusion Pharm, Inc.

(OTC:FSPM)

1

0

0

0

13

VI-2

Full Circle Capital Corp.

(FULL)

0

0

0

1

0

II-6

FutureWorld Corp.

(OTCPK:FWDG)

0

1

0

0

26

VI-3

Growblox Sciences, Inc.

(OTCQB:GBLX)

0

1

0

1

23

VII-4

Gala Global, Inc.

(GLAGD)

1

0

0

0

0

I-4

Green Cures & Botanical Distribution, Inc.

(OTCPK:GRCU)

0

0

0

1

5

VI-4

GreenGro Technologies, Inc.

(OTCPK:GRNH)

1

0

0

0

25

IV-4

Green Tech Solutions

(GTSOD)

0

1

0

0

11

III-6

GW Pharmaceuticals, PLC

(NASDAQ:GWPH)

0

0

0

1

54

III-7

Hemp, Inc.

(OTCPK:HEMP)

0

0

0

1

116

VI-5

Highmark Marketing, Inc.

(OTC:HMKTF)

0

0

1

1

0

I-5

IMD Companies, Inc.

(OTCPK:ICBU)

0

0

0

0

148

VII-5

Icon Media Holdings, Inc.

USST/(OTCPK:ICNM)

1

0

0

0

43

VII-6

IJJ Corp.

(OTCPK:IJJP)

1

0

0

1

15

II-7

InMed Pharmaceuticals, Inc.

(OTCQX:IMLFF)

0

0

1

0

0

VII-7

INSYS Therapeutics, Inc.

(NASDAQ:INSY)

0

1

0

1

0

V-9

Latteno Food Corp.

(OTCPK:LATF)

0

1

0

0

61

I-6

Cannabiz Mobile, Inc.

(OTCPK:LGBI)

1

0

0

0

33

VI-6

Livewire Ergogenics, Inc.

(OTCPK:LVVV)

1

0

0

0

186

I-7

Lexaria Corp.

(OTCQX:LXRP)

1

0

0

1

83

II-8

Medbook World, Inc.

(OTC:MBOO)

1

0

0

0

0

II-9

mCig, Inc.

(OTCPK:MCIG)

1

0

0

0

17

III-8

Medbox, Inc.

(MDBX)

1

0

0

0

18

IV-8

Medican Enterprises, Inc.

(OTCPK:MDCN)

1

0

0

0

9

III-9

Medical Marijuana, Inc.

(OTCPK:MJNA)

0

0

0

1

375

VI-7

Mentor Capital, Inc.

(OTCQX:MNTR)

0

0

0

1

1

V-10

MyECheck, Inc.

(OTCPK:MYEC)

0

0

0

0

169

I-8

Novus Acquisition & Development Corp.

(OTCPK:NDEV)

1

0

0

1

158

III-10

Nemus Bioscience, Inc.

(OTCQB:NMUS)

1

0

0

1

0

IV-9

Neutra Corp.

(OTCQB:NTRR)

0

0

0

0

19

IV-10

OrganiGram Holdings, Inc.

(OTCQB:OGRMF)

0

0

1

0

0

VII-8

OSL Holdings, Inc.

(OTC:OSLH)

1

0

0

0

110

VII-9

OXIS International, Inc.

(OTCQB:OXIS)

0

1

0

0

33

V-11

Growlife, Inc.

(OTCQB:PHOT)

0

1

0

0

156

VI-8

Plandaí Biotechnology, Inc.

(OTCPK:PLPL)

1

0

0

1

772

III-11

PharmaCyte Biotech, Inc.

NVLX/(OTCQB:PMCB)

1

0

0

1

734

II-10

Primco Management, Inc.

(OTC:PMCM)

0

1

0

0

131

V-12

Petrotech Oil and Gas, Inc.

(OTC:PTOG)

1

0

0

0

221

VII-10

Pazoo, Inc.

(OTCPK:PZOO)

1

0

0

0

454

I-9

Medical Cannabis Payment Solutions

(OTCPK:REFG)

1

0

0

1

266

II-11

Affinor Growers, Inc.

(OTCQB:RSSFF)

0

0

1

1

0

I-10

SinglePoint, Inc.

(OTCQB:SING)

1

0

0

0

69

I-11

Supreme Pharmaceuticals, Inc.

(OTCPK:SPRWF)

0

0

1

1

3

IV-11

Surna, Inc.

(OTCQB:SRNA)

1

0

0

0

14

VI-9

Tauriga Sciences, Inc.

(OTCPK:TAUG)

0

0

0

0

39

I-12

Totally Hemp Crazy, Inc.

(THCZ)

1

0

0

0

8

III-12

Therapix Biosciences, Ltd.

(OTCQB:THXBY)

0

0

0

0

0

VI-10

Terra Tech Corp.

(OTCQX:TRTC)

1

0

0

0

288

VI-11

Two Rivers Water & Farming Company

(OTCQB:TURV)

0

0

0

1

1

IV-12

Tweed Marijuana, Inc.

(TWMJF)

0

0

1

1

0

II-12

Indie Growers Association, Inc.

VKML/(OTCPK:UPOT)

1

0

0

0

38

VII-11

U.S. Energy Initiatives Corporation, Inc.

(OTCPK:USEI)

1

0

0

1

226

VI-12

Vape Holdings, Inc.

(OTCPK:VAPE)

0

1

0

0

1

VII-12

Vapor Group, Inc.

(OTCPK:VPOR)

0

0

0

0

80

   

Totals

45

14

8

32

 
   

Mean

       

84

Below is a horizontal bar chart of the stock promotions, generated from data contained in the above table.

Data or Tabular Summary

  1. Forty-five of the N=84 stocks are Nevada corporations.
  2. Only fourteen of the N=84 stocks are Delaware corporations.
  3. Only eight of the N=84 stocks are Canadian corporations.
  4. Only thirty-two of the N=84 stocks have positive working capital (WC), suggesting insolvency and/or lack of a going concern basis.
  5. NV represents the state of Nevada, where I use a "1" if the firm is incorporated in Nevada; "0," otherwise. Nevada has a corporate law that favors management, but not shareholders. This is referred to as "the Nevada effect" in ongoing academic research.
  6. DE represents the state of Delaware, where I use a "1" if the firm is incorporated in Delaware; "0," otherwise. Delaware has a corporate law that is perceived as equitable. Delaware has the oldest corporate law in America, and has been shown to generate abnormally high returns in some academic research.
  7. CAN represents incorporation in Canada, where I use a "1" if the firm is incorporated in Canada "0," otherwise. I only include Canada, because they are leading the charge in the legitimacy of medical marijuana via the MMPR. Also, some SA comments have suggested that Canadian firms accessing U.S. capital markets represent a better investment. I am unaware of any evidence to support this notion, but include the Canadian dummy variable for later testing.
  8. Because there is no evidence to suggest any patterns with respect to any state of incorporation other than NV and DE, other states do not require investigation.
  9. WC represents working capital, where I use a "1" if the firm has positive working capital; "0," otherwise. Negative working capital suggests insolvency in the near-term, but this fundamental appears to have little or no impact on marijuana stocks, where non-fundamental events tend to be important and drive the stock price. To the extent that stock promoters are used to sell into capital markets or facilitate toxic convertibles or what might also be referred to as a "downward spiral," the need for WC is lessened.
  10. PR is the number of stock promotions, as available on this website. I was going to use dummy variables (i.e., 1 and 0), but it is not reasonable to put a firm with n=1 promotion in the same category as one with n=772 promotions (i.e., Plandai Biotechnology, Inc.). You must investigate both old and new ticker symbols to get the count. For example, under the Nuvilex or NVLX name and ticker the count is n=727, but under the new, PharmaCyte Biotech, Inc. or PMCB ticker, the count is only n=7. The total, in this case, is N=734. The arithmetic mean is n~84. Effectively, the stockholder is paying for these promotions, directly or indirectly. Indirect payment by shareholders takes the form of toxic or otherwise convertible debentures, frequently between related parties, and/or shares issued at a deep discount, both of which are referred to as "downward spiral" financing alternatives. These measures were identified on January 22, 2015.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.