Carlsbad, CA / March 18, 2014 / The Marijuana Index, the first and only registered equity tracking index for marijuana stocks, cannabis stocks, and hemp stocks featuring dynamic financial content, closed yesterday at $29.11 -- a far cry from its recent high, pun intended. Green rush bulls are left with plenty to be excited about, as several issuers continue to surge, and macro-news for the industry shows a favorable outlook for cannabis-at-large.
A Path to Schedule (None)?
In a complete mockery of the definition for Schedule I, the Department of Health and Human Services signed off on a study which allows for medical marijuana studies in 50 veterans suffering from PTSD. PTSD is known to cause anxiety, sleep deprivation, flashbacks, depression, and even symptoms of mania or violence. While it would be irresponsible to assume the results, favorable response or clinical efficacy of marijuana in this study would be vindication for long-time supporters and a possible solution for as many as 7.7 million Americans who suffer from the disorder. Traumatic brain injury, or TBI, is another severe and often misunderstood diagnosis which plagues veterans (and NFL players) -- one which marijuana compounds could potentially improve due to its well known anti-inflammatory properties. America has a responsibility to fully evaluate anything which may prove beneficial in treating injured veterans, and this was the right move for health problems caused in the line-of-duty.
The broader implications of the federal authorization are sweeping; possibly as significant as the Department of Justice announcements to relax banking laws surrounding cannabis transactions. The Drug Enforcement Agency is expected to also approve of the PTSD study, which further illustrates the desperate need for a change to the Controlled Substances Act. At this point, the listing of marijuana on Schedule I is almost laughable.
GrowLife is currently featured in a CNNMoney "March Stock Mania" bracket.
An "homage to the NCAA brackets - Wall Street style," GrowLife is pitted in the first round against Apple (NASDAQ: AAPL). Apple. Didn't David once beat Goliath? A clear sign of the times and overall interest in the company - GrowLife's peers in the faux tournament include some familiar names: Intel, IBM, Tesla, Facebook, Starbucks, Microsoft, Best Buy, Amazon, Caterpillar, GE, Netflix, AT&T, Ford, Exxon Mobil, BlackBerry, Disney, Cisco, Verizon, Twitter, Bank of America, HP, Google, 3D Systems, Citigroup, Boeing, JPMorgan Chase, American Airlines, Coca-Cola, General Motors, and Gilead Sciences.
GrowLife appears to have lost the match to Apple, who is currently "beating" Intel by a wider margin in the next round. It seems someone at CNNMoney has been paying attention to the meteoric rise of GrowLife, which includes several joint ventures which further the issuers diversity. GrowLife enjoyed a 32.14% uptick Monday, with shares closing at an all time high of $0.777 per share (an interesting number on St. Patrick's day).
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mCig (OTCQB: MCIG) Boasts First Quarterly Profit in Corporate History
Speaking of companies on the rise - mCig recently announced that they were positioning to be the first company listed in The Marijuana Index to achieve an uplisting to a national stock exchange. Also closing at $0.77 on Monday, mCig announced a host of bullish insights into recent achievements: the successful launch of mCig 2.0, balance sheet improvements, sales of $85,109 in only 24 inventory days for mCig 1.0 and mCig 2.0, completion of previously announced acquisition Vapolution, Inc., and "debt, financial debt, and interrelated party loans reduced to zero." This is certainly a company to watch... The much anticipated S1 registration of VitaCig has the potential to significantly bolster mCig's balance sheet due to a shareholder-friendly gesture wherein CEO Paul Rosenberg will contribute his pro-rata VitaCig shares toward the mCig treasury. The company hopes to file the VitaCig S1 with the SEC no later than April 20th, 2014 (a clever goal date which doesn't go unnoticed, mCig).
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Update on Marijuana: The Real Estate Play
An index press release issued earlier this month discussed how marijuana companies are leveraging real estate creatively to execute deals -- well known MediSwipe (OTCQB: MWIP) announced today the execution of an LOI and joint venture agreement which will enable the company to sublease individual parcels of an 80 acre plot to fully-license, compliant growers and dispensaries in Colorado. The company reportedly will receive rents and management fees for providing infrastructure, and hopes to create the largest managed facility of its kind in the state. Tenants could move in as soon as May 2014.
An article by Juliette Fairley on MainStreet.com highlighted Bill Gottlieb and Jake Schrader of New York based Articulated Investors testifying in favor of cannabis legalization on behalf of the New York Assembly Health Committee. Referencing a recent sale-leaseback with L.E.A.F. Aspen, Schrader states in the article "our return on capital with this commercial building is greater than it would be if we were leasing the same building to any other industry we are aware of." Consider the implications of this and other real estate transactions. These sort of deals could pave the way for more growing space than previously available, as investors gain comfort in similar transactions and new funds deploy real estate based models. This could go a long way toward satisfying increased demand for cannabis. The real estate trend is expected to increase over time, but several public issuers appear to be well positioned and prepared.
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Independent Certification: The Final Frontier of Cannabis
As highlighted by a mutual press release and Benzinga article announcing a joint venture between GrowLife and Vape Holdings, the cannabis industry is strikingly devoid of standard operating procedures and good manufacturing processes.
Recreational cannabis was official in Colorado in January 2014 -- yet Colorado regulators are still running to catch up to overwhelming demand and new challenges. This process will likely repeat as other states approve adult-use legislation. Regulation, quality, and overall consistency problems are still rampant in California (who first legalized medical cannabis in 1996 through Proposition 215), and pose various issues to state and local governments.
In Colorado, calls to qualified engineers and proven experts who specialize in auditing other popular industries are reportedly steady. Decision makers in states (and countries) enacting any fashion of medical or adult-use marijuana laws are faced with a daunting task which extends far beyond the basic question of "to legalize or not to legalize."
Questions which plague decision makers include: "How do we keep tabs on this industry? What defines quality? What sort of compliance should be established? How do we regulate these businesses? What do we do to monitor taxation? How do we protect consumers?"
Consider for a moment the following:
1) States seemingly have no idea what to do. Colorado, which by all means appears to have been extremely successful in its roll-out of recreational cannabis, still recognizes a desperate need for unified standards. Washington conducted an outreach of various consultants to help in establishing licensing guidelines, but will face the same universal challenges (as will each of the current states mulling over legalization).
2) Emerging cultivators, extractors, edibles kitchens, and businesses are blinded by the green light of potential financial gains -- but some are clueless on how to run an efficient marijuana operation (let alone how to create a product safe for consumption by humans).
3) Established businesses have no centralized regulation or recognized standards, often guided by a hodge-podge, on-the-fly list of ideals that are largely more reactive than proactive.
4) An independent certification body for the cannabis industry appears to be the only real solution.
An emerging private company which ventures to solve these problems and more is being monitored by the index team: Bud Basics. Through the Bud Basics 4200 Standard, Bud Basics is the first quality management system tailored for the cannabis industry. Developed by experts in standards creation and certification, the company expects to establish the benchmark for quality in the cannabis industry.
Bud Basics 4200 Certification would make the lives of regulators easy, and serves the industry as a whole by enlisting prominent experts in each respective discipline through the Bud Basics Industry Benchmark Committee. These experts in cultivation, extraction, manufacture of edibles, and business sustainability will work in tandem with the Bud Basics Standards Creation Committee -- a logical and efficient model which combines cannabis expertise with quality management toward a unified methodology which all businesses would adhere to.
The company website highlights four specific standards processes, each based upon a foundation of expertise from relevant standards within other industries: Grow, Extract, Edible, and Sustainability. Bud Basics expects to become the ideal partner for companies who wish to illustrate their commitment to consumers, regulators, and the overall future of cannabis: an independent, third-party verification service based upon rigid, established criteria -- similar to stringent standards which already govern manufacturing processes throughout the world.
Bud Basics envisions a day when consumers can identify a quality product from a certified business when they see the Bud Basics Certification Mark. Those involved in growing, extracting, cooking, or operating cannabis businesses would benefit from an independent certification body. Bud Basics features a unique strategy by enlisting the aid of executives and experts in various disciplines through their two committees -- a move which is sure to be well received by industry insiders and consumers alike.
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