Hey guys, cannabis-related penny stocks have become excessively over-priced lately. Learn all the marijuana penny stocks reviewed here. Some of these marijuana companies are much better than others, so it may help you to see some of our thoughts on each one. Here is a review of each of the penny stocks in the pot business, some good and some not-so-good. Check this out!
Just about every marijuana-related company is excessively overvalued right now. In this video, we take a look at each one, and contrast the differences between them. Keep in mind that most of these investments trade over-the-counter (or as OTC). For that reason alone we would not invest in any of them. We explain this in our video about the Dark Markets and where many penny stocks trade. Now, fans of marijuana penny stocks will say that everything is going to change once pot becomes legal. First of all, that will be the exact point when massive, legitimate companies will sweep in and take over the entire market. That is also the point when the biggest barrier to entry for new competitors will fall away. Regulation is all that's keeping most pot companies at bay, and once legal, everyone and their grandma is going to be getting into this industry. Competition will increase dramatically, which will result in the profit margins of the companies operating in the space to be squeezed, if not wiped out completely. Look, there were 1,800 automobile manufacturers in the United States over the turn of the century. Just like pot penny stocks today, over 99% of these companies will not be around much longer. I'm not against the concept of recreational marijuana.
Personally, I even use medical marijuana for my disability. As you are about to see, what I take issue with is the current investor stampede. Apparently, nothing has changed since the very first Cannabis Business Summit in Colorado. I was invited to speak at the event the room was packed, but everyone in the audience was only interested with how they could get their company to be somehow involved with the marijuana mania. They had zero interest in learning about the financial train wrecks which were the pot penny stocks. They also wouldn't listen to my warnings which I was trying to provide to the audience. Soon after, all of the cannabis-related shares tanked.
Now, the bubble is inflating again, big time, and fast. When these cannabis penny stocks return to reality, it will cost so many people so much money. We'll start by taking a look at MJNA, the "Medical Marijuana Company." Medical Marijuana - MJNA Last quarter, they captured $2 M in revs, but their operating loss wiped that out, plus another $4.3 M. That means that they are bleeding cash right now to the tune of about $47 K per day, 7 days a week. In the previous Q, MJNA lost just as much money, and the Q before that their operational deficit was 3 times as large. IF their next Q shows another $4 M loss, then they would be looking at about $25 M wiped out during this fiscal year, which would be more than 3 times their total revenues. That would also be equal to about 1/3 of the company's total value, lost each year at the current rate.
Anyone can spend $3 to make $1 - I call that a roadmap towards bankruptcy. MJNA has about 10 employees, so they have burned up just under $2 M for each employee over the last year. === Cannabis Sciences - CBIS [share price] CBIS made $44 K last year, while losing $19 M during the same period. In other words, they spent about 430 times more than they generated. In the most recent quarter, they posted only $3 K in revenues, and had an overall loss of about $7 M. That means their cash burn was about 2,332 times greater than their sales. Total assets (or what they own) comes in at just over $1 M, with total liabilities (or what they owe) of nearly 5 times that much, at $5 M. Based on current share price, the CBIS company is being valued by investors at about $95 million.
That is absolutely unsustainable and unjustified for a company which brings in money by the thousands, not millions, owes five times what they own, and is burning up about $1 million every month. American Cannabis Co. - AMMJ - has a $37 M mcap, which is simply the price of the stock, times how many shares exist - so it shows you how investors value the entire company. That means there is about $4M in corporate value, for each of the 9 employees. LAST Q - $237 K revenues and they spent that for their costs, plus another $270 K TOTAL assets are only $397 K - my loser uncle's house is worth more than this entire company, and he has dishwasher on the lawn! Then, they have even more than that in terms of total liabilities, of $541 K. So, they are already under water from assets/liabilities standpoint, looking at what they OWN vs. OWE. CV Sciences (CVSI) - Last fiscal year, revs $11.5 M, lost that plus another $12 M. My concern is their selling, general, and admin expenses might be far too high- SG&A includes all costs to operate the company, that are not directly involved in the production of their goods. For example, SG&A includes advertising, supplies, salaries, rent, sales commissions, promotion, computers, and so forth. Taking out research and development expenses, their SG&A has ballooned from $43 K a few years ago, to $17 M last year. That rise is too rapid, so we looked deeper into what expenses create that cost. One of the places we looked was to see who's steering the ship, who are the executives? We have a related video which shows you some of the ways in which you can do this.
Between CEO Michael Mona, and his son, they take over half a million dollars out of the company each year in salaries. So let's go back a bit further - after having his casino application denied by the Nevada Gaming Authority, Mr. Mona filed for bankruptcy. Then, 16 years later, Mr. Mona launched CannaVest (CANN), which was a different pot-related company, before CV Sciences. At one point, CANN hit a valuation of $3 billion. The deeper we looked, into these cannabis companies and the people who are founding and running them, the more concerned we became. Words like promotions, jail, con artist, and swindlers, kept cropping up in main stream media investigations quite frequently.
Look, I don't want to see thousands of well-meaning investors get wiped out again, by these same pot penny stocks which investors are treating like lottery tickets. Some of these cannabis penny stocks were formed by reverse-merger, whereby they take over some unrelated, defunct company, then they simply add the word "marijuana" to their name. In one typical case, a nearly bankrupt mining company simply added "cannabis" to their title, and changed their business plan to, and I quote, "consulting for the marijuana industry," whatever that means. The shares immediately took off, despite the complete lack of revenues, the lack of prospects, or even lack of any specific business strategy. === There are 15 other marijuana-related penny stocks I want to touch on, and we will scroll our most important findings on each one, right here in this video. But to save us all some time, I'll just tell you that as we did our research, each pot penny stock we looked at seemed to be worse than the last. There is no play here, we are just waiting for reality to do what it did to Bitcoin, Occupy Wall Street, Solar stocks, the Dot Com Bubble, and every other mania we've seen. Legal recreational marijuana will come to America, but just about all penny stocks involved in the industry will be coming down in price, soon and in a big way.
This includes the best ones, and the worst ones. Now, just so you don't assume that we hate all of these marijuana companies, I'll give you an example of what you may want to look at. Kush Bottles - KSHB - actually not too bad. This is an example of a marijuana-related penny stocks which actually may still be around a few years from now. They have $5.6 M assets, $1 M liabilities. THEY even produced very small profit in all of their 4 most recent Quarterly periods. Maybe when the smoke clears, a company like this will still be around, but first the entire industry is setting up for a big hit. That will take down ALL of the these penny stocks to much lower prices, the good and bad alike. Besides, for KSHB, the $144 M Mcap is still far too expensive In terms of the other cannabis penny stocks, we'll scroll some of our findings here for you now, but only for those of you with a strong stomach. In the mean time, if you know anyone interested in trading these train wrecks, please have them watch this video.
IF THEY WATCH, MAYBE IT WILL CHANGE THEIR MIND. AND IF THEY CHANGE THEIR MIND, THEY SAVE MONEY, AND THEY WILL HAVE YOU TO THANK. Thanks so much, you guys are awesome, you are. I really don't want to see you get burned. Any questions about marijuana penny stocks, just reach out to my team, we can point you to some penny stocks which will actually increase in price, rather than all these cannabis companies. I hope you can appreciate all the marijuana penny stocks reviewed here. Thank you, and take care.