Medical Marijuana, Inc. (PINK:MJNA) Details Agreement, Intentions for CannaVEST Corp.
CannaVEST, still expecting a ticker symbol reassignment from its old FCLS, was revealed to have obtained from PhytoSphere inventory previously disclosed to be hemp oil, equipment, domain names, as well as agreements with facilities producing and processing hemp. The deal includes the right to use the PhytoSphere branding and logo as well.
CannaVEST will most likely be paying by issuing shares worth a total of $35 million by the end of the current calendar year. The agreement is supposed to favor both sides, with CannaVEST providing MJNA with needed amounts of raw hemp oil at ‘favorable’ pricing, while MJNA undertakes the obligation to buy its needed amounts from CannaVEST. This does look like a generally favorable development for MJNA, who disclosed they would need an estimate of $10 million to secure their required amounts of hemp oil for the first half of 2013.
There were certain bothersome details around CannaVEST and their situation prior to the PhytoSphere deal that we examined previously. Hopefully, with the assets, equipment and branding obtained in the deal under its belt, the company will be able to justify its high share price which has risen from $5 at the time of the agreement with MJNA to $12.50 per share at yesterday’s close.
On Friday MJNA logged another day of trading that could be called cautious trading. Daily share volume has remained under 10 million shares for a third day in a row. Actually those were the only days with under 10 million volume since the last days of January. Price fluctuated again intra-day but the stock closed only a fraction of a cent, or 1% down.