Medical Marijuana, Inc. (OTCBB: MJNA) Gets Clearance for Mexican Shipments and Reduces Debt
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Brief Report for Medical Marijuana, Inc. (OTCBB: MJNA)
About Medical Marijuana Inc.
The mission of Medical Marijuana, Inc. (OTC Pink: MJNA) HempMeds® is a corporate portfolio company of Medical Marijuana, Inc. and the Company’s exclusive master distributor and contracted marketing company. In addition to handling sales and distribution, HempMeds® is the communication hub for the Medical Marijuana Inc. portfolio of companies.
According to a recent Reuters report, imports to Mexico are “restricted to products free of tetrahydrocannabinol (THC), the ingredient in marijuana that gets you ‘high’.” RSHO-X contains cannabidiol, the non-psychoactive component of the hemp plant. The report estimates the market in Mexico for cannabidiol (CBD) hemp oil to be $1-2 billion over ten years.
HempMeds® Mexico is offering three products:
Real Scientific Hemp Oil-X™ Gold Label CBD Hemp Oil in the 10 gram oral applicator contains 2,500mg cannabidiol
Real Scientific Hemp Oil-X™ Liquid Gold Label CBD Hemp Oil in 4 fl. oz. bottle contains 1,000mg cannabidiol
Real Scientific Hemp Oil-X™ Liquid Gold Label CBD Hemp Oil in 8 fl. oz. bottle contains 5,000mg cannabidiol
MJNA has significantly reduced its debt obligation from $24 million at the close of the third quarter (ending 9/30/2015) to approximately $10 million at the close of the fourth quarter (ending 12/31/2015), a reduction of approximately $14 million. The Company also acquired and consolidated several of its partnerships including 93.4% of HempMeds® Brasil™, LLC and the remaining 20% of HempMeds® PX that Medical Marijuana, Inc. did not already own from affiliated parties that comprise the largest shareholder of the Company.
Prior to the acquisitions, the Company sold its RSHO™ products to HempMeds Brasil™ and the other consolidated companies at wholesale, which then in turn sold those products retail to consumers in their respective markets. As a result of the acquisitions, the Company will now realize the full margin between the cost of manufacturing the product and retail pricing on the sales of the product.
The combined purchase price for the acquisition of 93.4% of HempMeds® Brasil™ and 20% of HempMeds® PX was $13,875,000. Under the terms of the acquisitions, the purchase price is subject to downward adjustment if the aggregate post-acquisition valuation of both entities (as of the transaction date of December 31, 2015) by a recognized independent valuation firm is less than the purchase price and is not subject to upward adjustment unless the aggregate valuation is greater than $100 million (as of December 31, 2015) and such upward valuation is nonetheless subject to a cap of $20 million.
Broad street alerts has compensated the author of this report (LIX Research) up to two hundred fifty dollars for the redistribution rights for a period of 30 days. Broad street alerts and parent company Small cap specialists LLC have not been compensated in any way for this post.