SAN DIEGO, April 30, 2013 (GLOBE NEWSWIRE) --
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 team's
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 cannabinoids, 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
Phytosphere's 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 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 the director 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, we 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
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 versus 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 in 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 sell 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,
then 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 MJNA's 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 positioned 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.
FOOD AND DRUG ADMINISTRATION (FDA) DISCLOSURE
These statements have not been evaluated by the Food and Drug
Administration (FDA). These products and statements are not
intended to diagnose, treat, cure, or prevent any disease.
CONTACT: 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
Email: ssmith@smallcapvoice.com
Skype: SmallCapVoice.com
AIM: SmallCapVoice7
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