Big Things Do Come In Small Packages: MCIG

Feb. 07, 2014 8:49 AM ETBTZI16 Comments
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Contributor Since 2012

I am a private investor who has found a trading niche in the Cannabis sector. Stock trading brings me back to my old days as a sales account manager. I love the feeling of closing a good deal, or picking a winning stock. What I write about is simply for entertainment purposes only. I am not a professional. I encourage every reader to do their own due diligence. "Never regard study as a duty but as an enviable opportunity to learn to know the liberating influence of beauty in the realm of the spirit for your own personal joy and to the profit of the community to which your later works belong." -- Albert Einstein

According to an Market Insider Article written last August, Judy E. Hong of Goldman Sachs Group, suggests the e-cig market could reach $10bn in retail sales over the next several years, up from $1bn in retail sales this year. E-cigs have become a viable alternative to cigarettes for many, not only because they are nearly 99% less harmful, but e-cigs offer a better economic bargain.

The Revolutionary $10 Dollar E-cig

mCig, Inc. (OTCQB:MCIG) manufactures and retails the mCig-the world's most affordable vaporizer priced at only $10. Designed in the USA-mCig provides a superior smoking experience by heating plant material, (including cannabis where legal), waxes, and oils delivering a smoother inhalation experience.

The company just recently acquired Vapolution, Inc. which manufactures and retail home-use vaporizers such as the Vapolution 2.0. The Vapolution 2.0 is the only vaporizer with an all glass vapor path. This is a game changer in the industry, because glass is completely non-reactive. By separating the air from the heating element, the taste of vapor is left unaltered. Connoisseurs agree that the purity and the density of vapor through a wholly glass path is what makes Vapolution 2.0, one of the best vaporizer's on the market. Vapolution, Inc. since 2010 has generated revenues of over 1.2m.

What makes MCIG an attractive investment opportunity is that they are one of the only companies in the " cannabis index " to be both SEC regulated, meaning it adheres to higher corporate standards, as well as having zero debt. MCIG, since falling to a low of $.068 this past November, has healthily and steadily climbed to a recent high of $.39, with a market cap of close to 98m. MCIG also has a manageable o/s count at 270m. The company recently produced an investor presentation, and also stated that they recently had their top sales day of $3,500. Before one just simply laughs that off, that is 1/3 the amount of Revenue they had all of last Quarter. And remember their core product sells for just $10. So that's roughly 350 units sold in one day.

Not All Micro-caps Are The Same

Anyone who has traded micro-caps, knows it is a breeding ground for companies and their CEO's, whose main objective is to make money through dilutive processes, with no regard to real shareholder value. Whose sole purpose of existence is to pay salaries, summer homes, and operating expenses of it's " shell " or " development stage ", going no where company. MCIG CEO, Paul Rosenberg, has decided that there is no company, apart from creating shareholder value. MCIG announced in December that they decided to reduce the authorized shares outstanding by 44% to 560,000,000. Their recent acquisition of Vapolution was a non-dilutive transaction in which they issued 5m shares representing 1% of their fully diluted capital structure. Mr. Rosenberg then decided to cancel an equal amount (5m shares) of common shares owned by him resulting in a net non-dilutive transaction to existing MCIG shareholders.

On Monday, MCIG unveiled Vitacig, Inc. - a 100% owned subsidiary. Vitacig, Inc. intends to file for IPO with shares distributed to MCIG shareholders as free dividend. The result will be that every owner of (1) share of MCIG will receive (1) share of Vitacig, Inc. as a free dividend. Mr. Rosenberg decided shareholders should be, " rewarded for their loyalty and support ". I have a new nickname for MCIG's CEO. Robinhood!

Today, MCIG announced it's first brand ambassador: Jordan Young, also known as DJ Swivel. Jordan Young, is a Grammy Award winning producer. Who has worked with Rihanna, Jay-Z, Kanye West, P Diddy, Ice Cube, Britney Spears, and the list goes on and on. MCIG is full steam ahead in becoming the world's most used and recognized e-cig on the market.

Move Over Tech Boom, Cannabis Is Next

MCIG is certainly the kind of stock one would add to their portfolio, and feel comfortable considering holding long term. I must admit I struggle with the current valuations of the stocks found in the cannabis sector, MCIG included. But the cannabis sector is one of the most bullish sectors trading on the market today. Thanks to Colorado becoming fully legal this year. And an American President, who doesn't shy away from his own experimenting with marijuana, and has recently stated that marijuana is less harmful than alcohol. To give even more exposure and pop to the sector, within the next few weeks Attorney General, Eric Holder, is going to publicly give banking the " yellow " light, so to speak, to work with legal cannabis businesses. Which is an obvious major shift in culture and policy in dealing with cannabis. The market has responded, and publicly traded companies like MCIG, is seeing an influx of investors wanting to capitalize on the green rush. So, my opinion on valuation, not only dealing with the micro-cap world in general, but the booming cannabis sector, seems to be whatever the market is willing to pay for it. And it is obvious investors are opening their pockets. Just remember micro-cap stocks involves greater risk and can experience high volatility. But for those on the sidelines who think these stocks will fade in the wind, my response is, just wait till election time come November, I can assure you, you ain't seen nothing yet.


MCIG, is a cannabis stock, with a sustainable business model, based on the expected growth of the market. A company that is committed to profitability, company and shareholder value, an will ultimately be one of the few to stand the test of time. The e-cig market is exploding, not just here, but abroad. MCIG currently distributes to over twenty countries and is becoming a leader in the industry. MCIG is a very likely acquisition candidate as well. The tobacco giant Altria, just acquired e-cig company, Green Smoke, for 110m. Fourth Quarter will show growing revenues and looks to maintain a clean balance sheet. The company continues to search for supporting core, revenue producing acquisitions and aligning themselves with the right partners. As well as evolving and it's product line. The company also announced the mCig 3.0 is due out Third Quarter and Vapolution 3.0 is due to be released Fourth Quarter.

Disclosure: I am long MCIG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: (Editors' Note: This article covers 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.)

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