MJNA Stock – Marijuana Scented Penny Stock Scam or the Real Dealer?

Posted by Admin on February 28, 2012 under Penny Stock Alerts Blog, penny stocks | 3 Comments to Read

MJNA stock: A Marijuana-Scented Penny Stock Scam or the Real Dealer?

Medical marijuana is a growth sector and Medical Marijuana, Inc. (MJNA) is a hot stock in the legal pot business. It closed today at 6.6 cents with a 127% gain. The company announced a deal to obtain $4 million in financing from CannaBANK.

MJNA is an interesting penny stock. The company provides business management solutions to the hemp and medical marijuana industries. Marijuana stores, often called dispensaries, can use MJNA for turn-key management solutions and marijuana testing and grading.

The grading is more involved than having two stoners on a couch deciding how good the marijuana is but, marijuana, even when used for medical purposes, is an illegal drug in the eyes of the federal government. That makes it tough for these companies like MJNA to obtain financing – big banks don’t want to deal with them because they can be accused of money laundering. Medical marijuana businesses that are legal under state laws can find it impossible to open a checking account since banks are regulated under federal laws.

CannaBANK has stepped into that financing as a private equity firm dedicated to the cannabis and hemp industry. The company specializes in the capitalization, development and acquisition of medicinal cannabis and industrial hemp businesses.

For the fourth quarter, MJNA reported sales of more than $430,000. But because the business has trouble setting up legal bank accounts, it’s tough to tell where the money is going. They reported that they had cash totaling only $24,000 on their balance sheet and that means they will need to keep raising money through financing deals.

Terms of the deal with CannaBANK weren’t released. MJNA isn’t current in their SEC filings so there’s no way to really see how profitable they are. There’s just no way to easily evaluate the company. Some medical marijuana businesses that seem legal under state laws are being shut down under federal laws. It’s a confusing industry.

Penny stock investing is challenging enough without adding confusion about whether or not a company can even legally exist. MJNA traded as high as 23 cents a share in the past 52 weeks and as low as 1 cent…with no real way to analyze the business, traders really can’t figure out what it’s worth.

I’ll keep digging and I’ll let you know if I can figure it all out.

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