SAN DIEGO, April 30, 2013 /PRNewswire/ -- Medical Marijuana
Inc. (OTC: MJNA)
To The Shareholders of Medical Marijuana Inc.:
From: Michelle Sides,
Chairman, Chief Operating Officer and Shareholder
It has become apparent that the Company needs to pause
momentarily and address the concerns of a number of our valued
shareholders that have been posed to us from the numerous emails,
postings, phone calls and the like as it pertains to the recent
blog articles on MJNA. These attacks, led by a collective group of
individuals with personal motives have led to uncertainty within
our shareholder base. Shareholders have also expressed
concerns on the failure of management to address those accusations
on a more diligent basis. I will begin with a brief overview of
where the Company is headed and then directly address the questions
that have been presented.
Medical Marijuana Inc., is in the business of researching,
developing, investing and selling products and services within the
legal medicinal cannabis and industrial hemp industries. Over the
past few years the Company has gone to great lengths and our team
has worked tirelessly to develop innovative affective products,
create supply chains that prior to our development and teams
expertise did not exist. We have had to effectively navigate an
ever changing legal and political environment at home and abroad,
changes that have and have not affected the Company. We have had to
decide which businesses, brands and products to invest in and
develop, seeking legal guidance on the related matters, all while
allowing us to comply with the United
States and other countries laws we operate in. The cannabis
industry is ever evolving and constantly on the move politically
and within the context of products (both medicinal and not).
The Company has chosen several paths to focus on. The first is
our hemp based consumer products such as Dixie Botanicals
(www.dixiebotanicals.com) and our CanChew Gum (www.CanChewgum.com).
The second is on the raw ingredients supply chain with the
development of PhytoSPHERE Systems (www.phytospheresystems.com) and
its hemp production capabilities. Prior to our development and
production of Phytosphere, the raw ingredients markets for our
products did not exist. The third is actively and aggressively
pursuing additional investments in companies that are in our core
competency, such as our recent investment in KannaLife Sciences,
Inc. ("KannaLife"). KannaLife holds an exclusive license
agreement with the National Institutes of Health – Office of
Technology Transfer ("NIH-OTT") for the commercialization of U.S.
Patent 6,630,507, "Cannabinoids as Antioxidants and
Neuroprotectants" (the "'507 Patent"). The 507 Patent includes
among other things, claims directed to a method of treating
diseases caused by oxidative stress by administering a
therapeutically effective amount of a non-psychoactive cannabinoid
that has substantially no binding to the NMDA receptor. KannaLife
intends to move forward with its commercial development plan, and
design a novel new drug compound for the treatment of Hepatic
Encephalopathy (HE). The fourth is in the product sales, marketing
and distribution pipelines for our products and within our products
space. Prior to the Company's investments there was not an overall
hemp based products distribution platform. Our team has spent years
developing its distribution pipeline and developing the online
properties the Company is in the process of launching, this
includes more than 3000 online sales and informational sites that
are keyword based and being developed. These properties will lead
to the Company's overall sales, marketing and branding success.
As new management was put in place at the end of March 2011, we have faced considerable obstacles
such as: the present DTC Chill; short sellers who have made
it a priority to relentlessly attack our Company as well as its
executives for their own personal monetary gains; delays in
reporting; individuals who do not like our industry as a whole and
difficulties in getting products launched. Even in this volatile
atmosphere and challenges, we are excited about what we have
accomplished and where the company is headed. The MJNA team
works literally 24/7 to accomplish these business goals and we have
surrounded ourselves with professionals who are experts in their
fields to ensure that what is being done is being accomplished the
right way. There are times this may cause a brief
unanticipated delay – waiting for legal opinion letters, product
marketing approvals, auditor schedule and legal guidance, but we
will do what is required to protect MJNA shareholder
interest. We have created an incredible opportunity with
unlimited possibilities. We would like to emphasize that all of
these activities are carried on in the most ethical and transparent
way and with the primary objective of developing and delivering to
the public the most effective, innovative products based on
medicinal cannabis.
- FINANCIALS AND PHYTOSPHERE SYSTEMS TRANSACTION
There have been some questions with regards to the CannaVEST
transaction with Phytosphere Systems. The current status of this
transaction is as follows: MJNA currently owns and has owned 80% of
Phytosphere Systems, which is a global phytocannabinoid
biotechnology company specializing in the production of hemp based
compounds, oils and extracts. These include Cannabidiol (CBD),
Cannabidiol-Acid (CBD-A), Cannabigerol (CBG) and Cannabigerol-Acid
(CBG-A) as well as other beneficial cannabinoinds, terpenoids and
flavinoids. The Phytosphere Systems is also developing a pipeline
of Terpenoids and flavinoids. As part of the company's
refocusing of management, time and capital, we decided to
streamline our business focus.
Prior to Phytosphere, these pipelines of products did not exist
in any large quantity or steady supply. Since then, we have
been able to sign an exclusive license with CannaVest Corp, which
would allow MJNA the benefit of its steady pipeline, while no
longer having to deal with the day to day operating challenges. The
company operates in five countries and three continents. Along with
the licensing agreement, the Company agreed to sell its excess
inventory as well as the contracts, subcontractors and production
capabilities to CannaVest as part of the transaction. This again
allows the Company to no longer have to deal with the day to day
operations, legal, export, import, licensing, continued
development, considerable financial investments, staffing and costs
associated with the logistics of the business while still owning
80% of Phytosphere. CannaVest provides the raw ingredients to the
Company for the same price MJNA received prior to the execution of
the license agreement. Once Phytospheres production increases and
creates a decrease in the cost of production, a drastic price
reduction will be made available to MJNA and its subsidiaries.
This obviously will lead to significantly increased
profitability for MJNA and its shareholders. The payment structure
is as follows: CannaVest is paying MJNA $35 million through the end of 2013. The payments
can be made in stock or cash, or a combination of both (please look
at legal disclosure for exact terms). If CannaVest pays in
stock, MJNA becomes the majority shareholder in CannaVest and gets
to realize a cost savings in production, while also the increase in
value it may get from the continued growth of the brand. If
CannaVest pays in cash, MJNA realizes a substantial increase in its
cash position. To date MJNA received in the 4th quarter
a $4.5m dollar payment in CannaVest
stock payment towards its licensing obligation, and as disclosed in
subsequent filings, the Company has also received
$4.5m and a $1.5m payment in stock from CannaVest, for a
total stock payment of $10.5m towards
licensing and partial inventory. The first payment of $4.5mil was 100% credited as licensing, the
second and third installments are credited as an inventory
purchase. The details of the transaction will be addressed in our
first quarter filings, on or before May 15,
2013. The balance of the $24.5m paymentsconsideration will be broken up
between inventory purchases first, then against the production
contracts and the agricultural production team that was acquired by
CannaVest as part of the transaction.
In conclusion, we feel very positive about the transaction with
CannaVest. As it pertains to MJNA, we are able to maintain our cost
for raw materials through an exclusive licensing agreement, and
over time decrease our costs of raw materials while increasing our
profit margins. This will decrease our operating expenses by
over $10 million dollars this year
alone (which encompasses the cost of our next production run, new
equipment, leasing and expansion), free our cash flow up for
additional product launches, and no longer have the day to day
managerial and operational burdens related to raw material
procurements. Our team and I have been working tirelessly 7 days a
week to create this raw ingredients pipeline and now that it is
built we no longer have to keep up that pace, we can use that time
to devote to our consumer products and clinical development.
1ST QUARTER FINANCIAL FILINGS ON OR BEFORE
MAY 15, 2013:
The auditor is performing the final verifications of the
1st Quarter filing and will have it posted shortly
thereafter.
YIELD SIGN/AMENDED 4TH QUARTER FILING:
The 4th Quarter filing was amended to include the
annual financial results for the prior three quarters. The
yield sign has now been removed and an updated legal opinion letter
issued. To accomplish this, our updated attorney opinion letter was
posted and the auditor revised the format as required.
From this point forward, we have revised protocols to do our
best to prevent this from happening again.
As stated previously, the Company has retained an auditor as we
work towards an up listing of our stock. Our goal is to make
sure that all reporting is done accurately and in compliance.
This has been a cumbersome process and the DTC chill has caused a
significant delay. However, the Company has allocated the
resources needed and is diligently working towards this
realization. It is not known at this time how long the
process will take, but we will keep shareholders updated on
progress.
EXECUTIVES ARE SELLING THEIR SHARES IN COMPANY:
The statements contained in certain analyst blogs relating to
the Company's Chairman/COO liquidating millions of shares is
completely inaccurate and again is no more than an attempt to
create mistrust in the company's leadership. Yes, I have registered
my ability to liquidate 1% of the outstanding shares as required by
the SEC. As of this date, I have personally NOT sold any
shares. As with any other executive in other industries,
shares are routinely provided as part of a person's compensation,
which is the case here. I am strictly regulated by securities
laws and regulations and take compliance issues very seriously.
TRIPP KEBER NO LONGER ON BOARD OF DIRECTORS:
While it is true that Tripp Keber
no longer holds a seat on the MJNA Board of Directors as of
March 6, 2013, this is by no means a
negative impact on the company. For any of you who have met
Mr. Keber or seen his numerous interviews, you know that he and the
entire Dixie team is an invaluable asset to Red Dice Holding by being on the ground floor
using his talents to become more involved in political forum of
Colorado for our industry,
promoting our growing brands, facilitating new partnerships,
educating the public and finding products that will continue to
make our company a leader in this industry and being the President
of Red Dice Holding. Mr. Keber
works tirelessly getting our Dixie Botanical products out to the
public and we have had great success with these efforts and will
continue to do so.
In the meantime, we are actively searching for other qualified
individual(s) to fill the vacant board seat(s). Specifically,
we are looking for the right individuals who will bring valued
experience and guidance in the growth of our Company. We will
announce director the appointments at the proper time.
CANCHEW GUM PRODUCT LAUNCH AND NEW CORPORATE CANCHEW BIOTECH
SITES:
The Company has successfully launched of the CanChew Gum website
(www.canchewgum.com) and is taking sales and product
requests. We experienced a delay in the launch of the
products due to last minute changes and approvals that we required
from attorneys involved to ensure that all marketing and packaging
was done correctly and in compliance with the appropriate
regulatory bodies. The Company launched its new Canchew
Biotechnologies (www.canchewbiotech.com) website on April 20th, 2013. This is the
informational website for the anticipated MedChewRX gum being
clinically developed by Canchew Biotechnologies, with clinical
trials in Europe set to begin in
the 3rd quarter 2013.
DEPOSITORY TRUST COMPANY (DTC) CHILL UPDATE:
We received notification from the Depository Trust Company
("DTC"), that a deposit transaction restriction had been placed on
MJNA to prevent additional share deposits until certain information
was received. The DTC provided a list of over 140+ issuances
that they were requiring supporting documentation for, as well as
legal opinion letters relating to the same. As the issuances
in questions were made prior to take over of management of the
Company, we experienced significant difficulty obtaining the
supporting documentation from former shareholders and
officers. However have now been able to accomplish the task
with the assistance of our Transfer Agent. The Company hired
an attorney in January who has had significant experience working
with the DTC to prepare the relevant opinion letters. All of
this information has been provided to the DTC on February 6, 2013, the DTC informed us that they
would respond no later than March 27,
2013.
Unfortunately, whether it is because of the industry we are in
or because of a requirement the DTC has put in place, they have now
decided on March 29, 2013 that they would like opinion letters on
all issuances placed with the DTC. We have again, gathered
all of the requested information and the same was provided to our
attorney as of April 23, 2013.
Opinion letters are being drafted and will be submitted to the DTC
as soon as they are made available. MJNA has done
everything that has been asked, provided all of the relevant
documentation, is in the process of gathering the additional
opinion letters and will resubmit it back to the DTC within a few
weeks depending on how long it takes to obtain the additional
opinion letters. Unfortunately, we have no control over how long it
will take for the DTC to review the information and, hopefully,
remove the chill.
SEEKING ALPHA WRITERS LITIGATION:
I am aware that there are those who feel that litigation should
have been commenced by now against Seeking Alpha blog writers that
have published numerous negative articles attacking the Company and
its management. Some have suggested that our failure to do so
is negative reflection on MJNA. I have personally met with
litigation counsel to go over the defamatory statements that were
presented by Seeking Alpha writers in several of the
article(s). The case is clearly laid out. However, it
is also more complex than just pursuing defamation claims against a
writer and a website as some have stated. The article(s) were
a blatant attempts, albeit briefly successful, to manipulate our
stock price, to damage our shareholders and to create fear and
doubt about our credibility. The actions from this group of
individuals commenced by the parties posting numerous positive
articles about MJNA all while knowing these same individuals would
then collectively post those defamatory article(s) right before our
quarter financial posting to significantly drop the stock value for
nothing more than their personal gain. MJNA had no part of these
actions, did not authorize, benefit, participate or have knowledge
of what was being written.
These individuals perform the same actions each quarter and
shamefully boasted about their success. Our litigation
attorneys are gathering relevant information, will assess the
possible claims against all responsible individuals. The
Company will move forward based upon the advice and conclusions of
our legal counsel.
All we can ask of our shareholders is that you perform your own
due diligence to find out the complete facts verses reacting to
postings by individuals who are obviously manipulating the stock
value for dubious reasons.
MICHAEL LLAMAS:
Michael Llamas is no longer an
executive or board member of MJNA. As previously disclosed,
in dealing with certain personal issues, Mr. Llamas decided it was
in the best interest of MJNA for him to step down. There are
no plans as of now or in the future to have him return to an
executive position with MJNA. The restructuring of management
has taken longer than anticipated. However we are diligently
searching for highly qualified individuals to fill vacancies. It
has always been our goal from the onset to retain individuals that
will take MJNA to the next level and keep it the industry leader
which it is and has always been.
MARIJUANA AND THC BASED PRODUCT INVOLVEMENT
We have been asked by shareholders if MJNA is involved any
marijuana or THC product sales and manufacturing. The company does
own through its 60% ownership in Red Dice Holdings, LLC the
formulations, brand names and intellectual property of over 70
products containing THC or marijuana from the Dixie brand purchase.
However the company does not operate, distribute or sale those
products, but has agreed to its use by a state licensed manufacture
within Colorado and is in the
process of expanding in several other states. Red Dice Holdings and
MJNA does not and has not received any revenue from those
operations and does not intend to, until and if marijuana is
federally legalized. The company does plan on charging a fee for
its use when it is in the best interest of the company via its
licensing fee. So that it is clear, MJNA does not grow, sell
or distribute marijuana under any circumstances as defined by the
USCSA. Red Dice Holdings does sell hemp based products
through Dixie Botanicals where these products are legalized and
controlled.
THE DIFFERENCE BETWEEN, CANNABIS, HEMP, MARIJUANA AND MEDICAL
MARIJUANA:
We get many questions on what we consider Cannabis, Hemp,
Marijuana and Medical Marijuana as well as how do we define them.
Cannabis L Sativa is a plant that encompasses both the industrial
hemp and marijuana families. Marijuana is defined as
containing a THC content (THC is the psycho-active ingredient) of
more than 0.9% or products derived from the flower and leaves of
hemp. In today's marijuana market, many marijuana strains
contain over 10% THC, some upwards of 20%. Industrial hemp
would be defined as a variety of Cannabis L Sativa that contains
less than 0.9% THC.
For informational purposes, marijuana has about 200 different
strains (varieties) and generally refers to the recreational
usage. In medical circles, the term "cannabis" refers to the
medicinal usage of marijuana.
Industrial hemp was formerly a staple crop of the United States in Colonial times and hemp
farmers include many famous names: George
Washington, Thomas Jefferson
and Benjamin Franklin. In all,
over 30 industrialized countries allow for the growing and
harvesting of industrial hemp, including our northern neighbor
Canada. Industrial hemp has over 2,000 known cultivars and
over 50,000 known industrial uses.
Marijuana, although classified as a Schedule 1 substance, seems
to have many medicinal values and properties. In all,
nineteen US States plus the District of
Columbia have recognized medical marijuana and have programs
where patients with certain needs, can obtain medical
marijuana. There are well over 1,000,000 patients in
the United States who are "medical
marijuana" patients (www.procon.org) which means that a significant
number of physicians in the United
States do prescribe medicinal marijuana / cannabis for
certain patients and their circumstances.
If one does not have a recommendation from a doctor for use,
than use of marijuana is considered "recreational". With all
the stresses we face in today's society, our opinion is that if
there is something from natural sources that can help one to relax
and deal with life's stresses with minimal side effects (compared
to alcohol or tobacco) – then this should be allowed.
Prohibition – this was an attempt to end alcohol usage in
the United States and was
unsuccessful. Today there are many successful businesses and many
thousands of people successfully employed in the alcoholic beverage
industry in the USA. Many feel that legalization of marijuana
for medicinal purposes would provide a significant boost to our
economy, providing jobs, secure employment and more importantly
help people where traditional medications have failed.
Industrial hemp provides many extracts, known as cannabinoids
that have shown therapeutic value. One of the most abundant
of these cannabinoid extracts is known as cannabidiol, or
CBD. CBD has shown positive benefits for health and wellness
advocates and we are proud to provide this key futuristic component
of hemp oil in many of our products.
Besides the health and wellness benefits, industrial hemp can
provide a complete food source through hemp seed products, building
and construction materials, bio-plastics (plastics that actually
bio-degrade and do not clog landfills), textiles and
bio-fuel. Our company is exploring futuristic uses of all
these component products of hemp.
TRANSPARENCY:
Admittedly, the Company been so focused on moving forward with
the growth of operations, acquisitions, forming new partnerships,
finding new products and restructuring that perhaps we have fallen
behind in keep shareholders adequately apprised of some
developments. This will no longer be the case as it opens the
door for those with their opinions or personal agendas to
relentlessly attack our credibility and the business objectives of
MJNA. As Chairman, I will make it a priority to address
concerns and have more detailed updates on a more regular
basis. We have retained numerous attorneys, hired auditors to
not only perform audited financials going forward but to also go
back and audit the last two years since the change in management at
MJNA. This action is being taken not just to move the Company
forward and to prepare for an uplisting of our stock, but more
importantly to provide directors, officers and shareholders with
confidence associated with the existence of audited financial
statements.
EMPLOYMENT OPPORTUNITIES:
Finally, we have been contacted by numerous shareholders asking
how they can become involved and if there are employment
opportunities with the Company. The answer is yes. We
are in the process of moving our operations to a larger facility to
allow for the considerable growth we are undertaking and are
actively seeking individuals for several positions within
marketing, production, sales and operations. If you would
like to submit your resume, you can forward it along with a cover
letter referring to any position you are interested in. Those
resumes can be submitted to: info@medicalmarijuanainc.com. We would
love to discuss any potential opportunity with you.
SOCIAL RESPONSIBILITY:
In a recent speech, the International Monetary Fund's Managing
Director, Christine Lagarde
mentioned:
"What we need is a full-speed global economy, growth that is
solid, sustainable, balanced, but also inclusive and very much
rooted in green developments."
We at MJNA believe Ms. Lagarde's comments summarize many of our
goals in creating a worldwide enterprise that produces sustainable
and renewable products, goods and services. This benefits us
all, at every corner of the earth. A sustainable, renewable
economy will wean us off the oil-based economy and the many
unsustainable practices that make us cringe every day. With
over 50,000 known uses, we feel that the hemp plant can provide
everything from health and wellness products from its specialty
extracts, to building and construction materials, bio-plastics,
bio-fuels and textiles. The hemp seed is extremely nutritious
with complete amino acids to build protein, essential fatty acids
in a proper balance to promote cardio-vascular health and key
minerals and enzymes for optimal functioning.
MJNA AN EMERGING BIOTECH CONCERN:
With our recent involvement with KannaLife Sciences and the
ongoing efforts to develop MedChewRX into a revolutionary
pharmaceutical product, MJNA has taken a big step forward in the
field of bio-technology. We are truly an emerging bio-tech
company and are unique in that our future success involves more
than just one future pharmaceutical or over the counter
product. Like any emerging bio-tech company, there are the
ups and downs of product development and sales as well as ups and
downs in market value / share price.
Supplementing our new pharmaceutical product development, we
offer nutraceutical products that afford potential health and
wellness benefits based on industrial hemp derived extracts.
Many such products are in the late-development stage and will soon
be offered to the marketplace, some are already being sold through
Dixie Botanicals.
Medical Marijuana Inc offers potential investors the opportunity
to participate in the future clinical development of unique
pharmaceutical compounds that we have been working with in
plant-based form for nearly two years now. We offer health
and wellness products that contain natural compounds and we feel,
that they are years ahead of their time.
We thank you, the shareholders, who have made the foundations of
all our efforts possible. We appreciate your loyalty and will
continue to defend against unjustified attacks and pursue the
individuals responsible for claims about our Company that have been
misrepresented to the public. As a bio-tech concern, our
vision is toward the future, with many of the fruits of present
labors being three-to-five years into the future. In the
meantime we will enjoy present revenues from unique products – all
providing a unique investment opportunity into newly emerging and
developing markets.
CONCLUSION:
We understand the concerns of our shareholders and read the
blogs, emails and postings daily. I truly hope that the
above answers some of those issues. Being the leader in this
industry makes us a target for competitors, stock manipulators and
related individuals that we have to deal with on a daily
basis. I am certain that I may be criticized for this letter
as well. However, for those of you who know me or are the
shareholders that I have had the honor of meeting in person, you
know that I am very blunt, to the point and I am fiercely
protective of MJNAs interest. Unfortunately we cannot focus
all of our time on responding to daily vicious inaccurate articles
written about our Company. Instead we will let our
actions, products and revenue speak for themselves. The only
way to combat these individuals is with success.
We have made mistakes, identified certain weakness in our
protocols and are vigorously working to ensure that we do
everything we can not only for our shareholders but for our valued
customers and partnerships. MJNA is a leader amongst this exciting,
innovating and promising new industry and we wholeheartedly remain
committed to retain this position. The Company has retained
numerous attorneys, an auditor, and professionals all experts in
their fields to provide the necessary guidance to ensure
compliance. The MJNA team is justifiably proud of how we have
turned this company around and created unlimited opportunities
ahead. We have always judged ourselves not only for what we
do but also what we decline to do. There will undoubtedly be
more obstacles ahead of us; however, we are confident in our
abilities and position to overcome any odds. On behalf of
MJNA and myself, we are grateful to our shareholders for supporting
us, believing in us and being a vital reason why MJNA is and will
continue to be a success.
FORWARD-LOOKING DISCLAIMER
This press release may contain certain forward-looking
statements and information, as defined within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, and is subject to the Safe Harbor
created by those sections. This material contains statements
about expected future events and/or financial results that are
forward-looking in nature and subject to risks and uncertainties.
Such forward-looking statements by definition involve risks,
uncertainties and other factors, which may cause the actual
results, performance or achievements of Medical Marijuana, Inc. to
be materially different from the statements made herein.
About Medical Marijuana, Inc.
Our mission is to be the premier cannabis and hemp industry
innovators, leveraging our team of professionals to source,
evaluate and purchase value-added companies and products, while
allowing them to keep their integrity and entrepreneurial
spirit. We strive to create awareness within our industry,
develop environmentally friendly, economically sustainable
businesses, while increasing shareholder value. For more
information, please visit the company's website at:
www.MedicalMarijuanaInc.com.
Corporate Contact:
Medical Marijuana, Inc.
Toll
Free: 888-OTC-MJNA (888-682-6562)
www.medicalmarijuanainc.com
www.facebook.com/mjnainc
Investor Relations Contact:
Stuart T. Smith
SmallCapVoice.Com, Inc.
P. 512-267-2430
F. 512-267-2530
Skype: SmallCapVoice.com
AIM: SmallCapVoice7
SOURCE Medical Marijuana, Inc.