The first things investors should know about Medical Marijuana Inc. is that the company doesn't actually manufacture and distribute medical marijuana. Instead, the company is broadly focused on the development and sale of hemp oil and hemp oil-derived products. Rather than manage this all under a single company, Medical Marijuana Inc. operates through its 8 partially or wholly owned subsidiaries: HempMedsPX, Wellness Managed Services, Red Dice Holdings, CanChew Biotechnologies, Hempwire, Kannaway, HempVap, HempMeds Brazil. The company also owns sizable investments in KannaLife Sciences and Axim Biotechnologies.
While the company does not disclose which subsidiaries generate what percentage of overall revenue, the company does break out financials by U.S. Operations (including Puerto Rico), Kannaway LLC, and Wellness Managed Services. For the most recent quarter (3Q:16), U.S. Operations generated $1.6 million in revenues, Kannaway generated $600,000, and Wellness Managed Services generated no sales.
In total, Medical Marijuana made around $2.2 million in sales and had a net loss of $3.8 million for the quarter. For comparison, in the thirdquarter of 2015, the company did a total of $1.8 million in sales and had a net loss of $5.7 million.
While this represents sales growth of a healthy 22% year-over-year, earnings are still deeply negative.
It is often a heady debate whether to buy or sell a stock, but the combination of an astronomical valuation along with a highly leveraged balance sheet make this one an easy call: Avoid at all costs.
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