mCig Inc (OTCBB:MCIG) Hangs On at $0.20
As we wrote in some of our previous articles, mCig Inc (OTCBB:MCIG) has been through some eventful trading sessions over the last couple of months. It displayed a massive crash at the end of 2013 but was then taken back up by the craze created around the marijuana industry.
The recovery was aided by the launch of the mCig 2.0 and, although it showed some hesitation last week, it still managed to finish Friday’s session above the $0.20 per share mark. The million-dollar question now is: “Where is the ticker heading next?”.
Today’s session is probably going to be quite interesting. President Obama expressed his opinion on marijuana over the long weekend. Apparently, he views the use of cannabis “as a bad habit and a vice“, but he also thinks that it’s “no more dangerous than alcohol“.
This sort of news often affects trading in Pennyland and we expect to see quite a lot of stir around the so-called pot stocks. Investor forums are buzzing with activity and the majority of traders expect to see the marijuana tickers soar. The enthusiasm around MCIG is further boosted by the fact that, unlike other cannabis companies, they do have a product that is already on the market.
Which, by the way, could help them in the long term as well. There’s a lot of hype around the weed sector at the moment, but sooner or later, it’s going to subside and once that happens, the pot stocks will need to support themselves through their operations.
MCIG has the edge over a lot of other enterprises in the sector because they have already started generating revenues. What’s more, we learn from the latest 10-Q that there has been a small increase in quarterly sales year-over-year. Perhaps more importantly, the net loss has dropped by a whopping 55% compared to the corresponding period of 2012.
Looks like they are well on their way to becoming a profitable venture, but are things really so simple?
At the moment, the outlook is bright but there are still a few unknowns. For one, the electronic cigarettes industry is surrounded by controversy. Some cities like New York recently elected to ban the use of e-cigs in indoor public places and there are people who are concerned about potential health problems that they can cause.
Despite that, the competition is stiff and if MCIG is to weather all the difficulties, it will need to face it head on. You should probably bear in mind that it’s bringing just $32 thousand in current assets to the gunfight. On the bright side, their product seems really well priced, but only the future financial reports can tell us if this alone is enough.
In the meantime, there is one more thing that you should probably consider. Back in January 2011, when the company’s focus was on the spa industry, they completed a private placement and sold 250 million post-split shares for proceeds of around $25 thousand. If the investors who got the discounted stock still hold it, they could be in for some quick and easy money.
Will they decide to cash in? Only time will tell.
While MCIG managed to hang on to the $0.20 per share mark, other pot stocks didn’t fare quite so well. Tickers like Growlife Inc (OTCBB:PHOT), GreenGro Technologies, Inc. (OTCMKTS:GRNH), and Medical Marijuana Inc (OTCMKTS:MJNA) experienced some significant corrections on Friday. They too, however, are bracing themselves for an interesting session in light of Mr. Obama’s views on marijuana use.