By Quentin Fottrell
Arno van Dulmen / Shutterstock.com
A company that creates medical-marijuana dispensing machines says its stock is getting way too high.
Medbox MDBX -90.24% shares surged 3,000% this week -- from roughly $4 Monday to $215 Thursday -- before falling to $100 after executives sought to dampen investor enthusiasm.
In a news release today, the company said that the stock’s rocket launch, which sent its market cap skyrocketing from $45 million at the start of the week to a staggering $2.3 billion, was ignited by a MarketWatch story Tuesday on how to invest in legalized marijuana (see How to invest in legalized marijuana .) (That’s about double the market capitalization of retailer Jos. A. Bank Clothiers.) The stock, which fell around 50% in early trading Friday, still hovers at $100. “We believe an appropriate trading range is between $5 and $10 but, alas, the market will do what it will do,” says Medbox founder Vincent Mehdizadeh.
Several states made recreational use of marijuana last week. There are several small-cap stocks that stand to gain from marijuana's growing acceptance, Quentin Fottrell reports.
At the height of trading this week, $600,000 to $700,000 worth of purchases were made, an unusually high volume for a company of this size. “It was astonishing,” Mehdizadeh says. “We couldn’t really understand why that was happening other than that there was a high demand for stock with limited supply.” It was “thin volume,” but Mehdizadeh says he doesn’t know whether it was one hedge fund or several big buyers.
The company says it’s also investigating ways to minimize any potential shareholder losses. Medbox is in discussions with its attorneys to see if it can reward early investors with company-owned shares should the price they bought at in recent days fall significantly. “We don’t want those investors to have sour feelings about what happened,” Mehdizadeh says. “Obviously day traders are having a field day lately trading our stock.”
But it’s very risky to invest in drugs prohibited at a federal level, experts say. Nearly 500 of the estimated 3,000 dispensaries nationwide have closed or were shut down by the federal government in the past year, according to StickGuide.com, an online directory for medical marijuana dispensaries. Currently, Medbox has 130 dispensers in the field and is due to install 40 more next month, and says it’s looking at the broader pharmaceutical market.
While the rush investors got from the company’s wild surge this week may be matched in coming years, the Hollywood, Calif.-based company says it is confident in its future prospects. Medbox reported a third-quarter revenue of $1.3 million, up from $850,000 in the second quarter. Medbox forecasts revenue of $24 million by the end of the fiscal year 2014 and $48 million by the end of fiscal 2016. It expects earnings before interest, depreciation and amortization to remain at a “healthy” $10.2 million and $22.1 million during those periods. “Real companies don’t need hype,” Mehdizadeh says.
“We feel within 10 years we could legitimately have share prices hit $215 again,” Mehdizadeh says. Currently, there are around one million shares available for trade and, this time next year, he says there will be another one to two million shares trading. Although the company focuses primarily on medical marijuana, he says the temperature-controlled dispensing machines could also be used in prisons and 24-hour drug stores for a larger range of drugs Marijuana-dispenser stock gets too high - MarketWatch.Vegas, NV (PRWEB) October 12, 2012
Bruce Perlowin, Boss of Hemp, Corporation. (OTC: HEMP) and industrial hemp veteran, whose company brought the final pre-election growth curve in 2009 having a 480% increase (http://world wide web.hemp.com), gave insight on as he thought the spike this month will begin and why.
Based on Bruce Perlowin, “Two days prior to the election happens when all of the action begins. We’ve medicinal marijuana around the ballot in Arkansas, Missouri, Pennsylvania, Illinois, New You are able to, Massachusetts, and Ohio. You’ve industrial hemp around the ballot in Colorado, Nh, Nj and Boise State Broncos. Then they are attempting to legalize the leisure utilization of marijuana in Colorado, Washington and Or. The activist organizations (Marijuana Policy Project, Police Force Against Prohibition, People in america for Safe Access, NORML, Students for Sensible Drug Policy and lots of other groups) running the campaigning for legalisation possess a particular strategy. Foreseeable and very effective, none-the-less. They hold back until 2 days prior to the election after which begin a massive media campaign… a full-scale blitz to teach people to allow them to election yes. This does not permit the opposition time for you to respond using their negative and false propaganda. The opposition could possibly be the prison guard union that may lose 800,000 criminals annually who’re imprisoned for marijuana. Consequently, the huge media campaigning makes people outdoors our industry conscious of this massive industry that’s growing extremely. Now you must everybody searching for investment possibilities within an industry that’s soaring.”
Wouldso would the legalisation of marijuana help the United states citizens and also the economy? Industry experts believe you will see a development of a brand new and highly lucrative farming industry, elevated trade possibilities, a rise in the gross national product (GNP), enhanced environment conditions, new tax assets, and reduced costs regarding enforcement of current laws and regulations. With all of eyes around the industrial hemp and medicinal marijuana industry, combined with the advantages of legalisation, savvy traders are starting to take a position heavily.
Hemp, Corporation.’s (OTC: HEMP) Boss, Bruce Perlowin, has gathered over twenty-2 million shares of stock in Rapid Fire Marketing, Corporation. 400 1000 in Cannabis Science, Corporation. 2 million in Grow Existence, Corporation. and, twenty-a million shares in Medicinal Marijuana, Corporation. Despite the fact that his favorite is their own (Hemp, Corporation. (OTC: HEMP)) he’s began smartly trading in other marijuana industry stocks. “I understand these stocks are likely to feel the roof,” states Perlowin.
As the average non-investor might not have an idea, market awareness all around the industrial hemp and medicinal marijuana industries is informative and could be very persuasive. When all of the pre-election media starts in serious, entrepreneurs and business owners of all types would like to get in to the industry. Some consider opening shops, growing medicinal marijuana, or getting compensated good wages as clippers. Everybody, from property traders with other hard-hit industries from the economy, begins sleuthing the.
Although some are courageous enough to spread out shops and grow, most often be cautious and purchase marijuana stocks. To put it simply, it’s a mature and aged industry reality within the American marketplace. The huge publicity won’t attract the typical American investor, it will likewise attract newbie traders (out of your auto auto technician employees for your stay-at-home moms) and foreign interests. “Everyone wants in on ‘the next large thing’. Think about it as being another us dot.com explosion with no crash not less than another decade or two, when,Inch states Perlowin.
He adds, “The wise investor will begin accumulating now before that explosion starts.” Perlowin’s investment strategy appears to become already paying off. The 2 million shares he bought of Grow Existence, Corporation. the very first 10 days in October elevated 39.9% on October 11, 2012 (which was the date the pre-election spike began 2 yrs ago when Prop 19 in California was around the ballot). That’s on the $10,000 make money from only one stock. Other experts accept Perlowin it’s only the beginning of the particular company’s pre-election spike.
Overall, Perlowin and industry experts alike are betting the development spurt will begin between October 16 and October 23, 2012 and rising… particularly if legislation passes. Forging a path within the industrial hemp industry, while educating customers around the many uses of commercial hemp, Hemp, Corporation. (OTC: HEMP) (http://world wide web.hemp.com), can also be creating hemp-based items shown to boost the body’s all around health and gratifaction. The organization boasts HerbaGenix A GROCER inside a Paris suburb continues to be billed with “incitement to make use of drugs” for selling a hemp beer known as “Cannabia”.
Even though the bottles contained only hemp – types of cannabis with really low amounts of active component THC grown for fibre and seed products – labels were considered provocative because, aside from the title, additionally they demonstrated a cannabis leaf coupled with a piece labelled “scratch and smile” which emits a cannabis resin smell.
Police carrying out a routine check from the premises grabbed 20 bottles and billed the dog owner using the “incitement” offence which could carry as much as five years’ prison along with a €75,000 fine.
The incident was at Le Rancy, an eastern suburb of Paris – among the rare well-off districts of Seine-Saint-Denis, a generally disadvantaged area regarded as a hub for drug trafficking.
The manufacturers of Cannabia really are a German firm, Dupetit Natural Items, which states it’s permission to market it within the EU.
The EU recognises numerous hemp types – with low THC – for uses including animal bedding and insulation or (the seed products) for making an edible oil. France is Europe’s biggest producer.
The United States however restrictions the growing of a myriad of cannabis, including hemp.
Photo: world wide web.dupetit.p Read more: http://www.ganjanews.org/police-seize-cannabis-beer-the-connexion.html#ixzz299c7jLu7 Forecasted Mass Growth Curve increasing for Industrial Hemp and Medical … – Stocks.com | GanjaNews.Org.
For some people, it still remains difficult to distinguish between the plant’s medicinal and recreational uses. Inhaling the plant’s vapors gets you high, even when that isn’t the primary reason why its being consumed.
It’s not just anti-cannabis critics who have a problem with this issue. Many of the people who consume raw cannabis with a doctor’s recommendation have no interest in getting high. For them, the plant is a safe and natural method of relieving constant pain and constant discomfort, and it’s euphoric and thought befuddling qualities are seen as (unwanted) side effects. Research is now showing benefits from eating or juicing raw cannabis.
One term that is regularly used in conjunction with cannabis is tetrahydrocannabinol (THC) — the ingredient in marijuana that produces the “high”. Cannabis does contain another beneficial chemical compound called Cannabidiol (CBD) which has been proven medically to help relieve inflammation, convulsions, nausea, as well as inhibit cancer cell growth.
Raw cannabis contains THCA and CBDA, ineffective alkaloids. They must be heated to produce THC and CBD, which in turn produces the “high.” This is the reason for smoking or vaporizing. By eating or juicing raw cannabis in its natural state, there is no “high” to speak of. Drinking fresh-squeezed cannabis juice (similar to wheat grass juice) or eating raw cannabis as a leafy green vegetable is fast becoming a preferred means of consumption for individuals in search health benefits without losing their heads in the clouds.
I personally have not tried this but please let me know your thoughts on this as it is a very interesting topic gaining popularity for a wide variety of health giving properties.
-Dr. Edward F. Group III, DC, ND, DACBN, DABFM
6/19/12 Follow up from Dr. G:
I would like to share with everyone an interesting and informative message I received from Jeffrey C. Raber, Ph.D. (thewercshop.com). Please read below:
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