SAN DIEGO, Feb. 27, 2013 /PRNewswire/ — Medical Marijuana Inc (OTC Pink: MJNA) a leading cannabis and hemp industry innovator is pleased to provide a comprehensive update to shareholders on the state of the medical cannabis and hemp industry. Many legislative actions have occurred, particularly since the November elections, which are providing significant positive momentum in our rapidly expanding markets.
Marijuana within the United States – A Growing and Expanding Market
Marijuana legalization initiatives have been in full swing. In November two US States, Colorado and Washington passed laws regarding full legalization of marijuana for recreational purposes. Since 1996, eighteen total states and Washington DC have approved marijuana for medical usage. The list in chronological order of legalization for medical purposes includes:
|1996||California||Proposition 215 with 56% of the vote|
|1998||Alaska||Ballot measure and 58% of the vote|
|1998||Oregon||Ballot measure # 67 with a 55% majority|
|1998||Washington||Initiative # 692 with a 59% majority|
|1999||Maine||Ballot Question # 2 with a 61% majority|
|2000||Colorado||Ballot amendment 20 with 54% of the vote|
|2000||Hawaii||Bill # 17 (32-18 House and 13-12 Senate)|
|2000||Nevada||Ballot Question # 9 with a 65% majority|
|2004||Montana||Initiative 148 with 62% of the vote|
|2004||Vermont||Senate Bill # 76 (52 – 10) and HB 645 (82 – 59)|
|2006||Rhode Island||Bill # 0710 (52 – 10 House and 33 – 1 Senate)|
|2007||New Mexico||Bill # 523 (36 – 31 House and 32 – 3 Senate)|
|2008||Michigan||Proposal # 1 with 63% of the vote|
|2010||Arizona||Proposition 203 with a 50.13% vote|
|2010||New Jersey||Bill # 119 (48 – 14 House and 25-13 Senate)|
|2010||Washington DC||Amendment Act B18-622 (13-0 vote)|
|2011||Delaware||Bill # 17 (27-14 House and 17-4 Senate)|
|2012||Connecticut||Bill # 5389 (96-51 House and 21-13 Senate)|
|2012||Massachusetts||Ballot Question # 3 with a 63% majority|
Nine other States have pending legislation to legalize medicinal marijuana including: Illinois, Iowa, Kansas, Kentucky, Maryland, New Hampshire, North Carolina, New York and Oklahoma
Several states have also decriminalized marijuana, which typically means no prison time or criminal record for first-time possession of a small amount of marijuana for personal consumption. The conduct is treated like a minor traffic violation. This list includes: Alaska, California, Colorado, Connecticut, Maine, Massachusetts, Minnesota, Mississippi, Nebraska, Nevada, New York, North Carolina, Ohio and Oregon
In the most recent example, New York City’s marijuana decriminalization law was signed by Mayor Michael Bloomberg. The US leading city’s new actions signify a change in attitude toward marijuana in general and certainly toward medicinal uses of marijuana.
Starting on March 1st 2013, having possession of a small amount of marijuana will not necessarily mean jail time, like it does under current law. As long as the possessor has an ID and no outstanding warrants, the Officer will be allowed to let the offender go free. Statistics show that more than 50,000 people are arrested for marijuana possession in New York City every year.
Mayor Michael Bloomberg said on Thursday, February 14th, “We know that there’s more we can do to keep New Yorkers, particularly young men, from ending up with a criminal record. It’s consistent with the law, it’s the right thing to do and it will allow us to target police resources where they’re needed most.” According to the Drug Policy Alliance, New York City spent over $150 million on marijuana arrests in 2010 and 2011 combined.
US Federal Legislation Update
Recently two US Congressmen, Jared Polis (D-CO) and Earl Blumenauer (D-OR) have introduced two pieces of legislation to de-federalize marijuana policy while simultaneously creating a system of federal taxation of cannabis.
Polis’ legislation titled Ending Federal Marijuana Prohibition Act would remove the DEA’s authority over marijuana and turn this regulatory authority over to the States. The States could then choose to allow marijuana – then to allow for medicinal or recreational use.
Blumenauer’s Marijuana Tax Equity Act would establish a federal excise tax on marijuana sales and use. Together these two bills would provide a system of regulation and taxation for marijuana in states where it is legal.
Both congressmen have also co-authored a report titled: The Path Forward: Rethinking Federal Marijuana Policy which outlines opportunities to reform and clarify marijuana laws at the federal level. A link to the document can be found here:http://polis.house.gov/uploadedfiles/the_path_forward.pdf
More information on the two Congressional Bills:http://polis.house.gov/news/documentsingle.aspx?DocumentID=318723
Marijuana Legalization Fiscal Impact
Given projections by Washington State in their Fiscal Impact Report, they estimate that the total revenue generated by the State, from marijuana legalization, could be as high as $1.9 billion over five years. The same report estimates the annual State revenues to exceed half a billion dollars starting in FY 2015 but are expected to be about half a million dollars in FY 2013. In effect, in two years this Washington State market is expected to grow by a factor of 1,000.
Washington’s projections include sales of cannabis only and do not account for cannabinoid-based pharmaceuticals, hemp-derived supplements, cosmeceuticals / nutraceuticals, edibles, etc. Extrapolating these projections throughout the nation gives analysts the impression that this is a market in its total infancy.
In Colorado things could get further amplified, as the State will apparently allow for “Pot Tourism”. In Washington one is required to be a state resident in order to purchase marijuana and the financial projections above are based on those assumptions. However in Colorado the current trend from the legislative task force on marijuana is that the State will allow for out-of-state residents to also purchase marijuana. The caveat is that this marijuana must stay or be consumed within Colorado’s borders. Given this, the financial projections may significantly escalate versus that for Washington. A link to an article from the Denver Post is here:http://www.denverpost.com/news/marijuana/ci_22623624/pot-tourism-colo-marijuana-regulators-ok-idea?IADID=Search-www.denverpost.com-www.denverpost.com
Even with a purchasing cap placed on tourists, many experts are calling for at least a doubling of the Washington projections for Colorado, given the marijuana tourism aspect. That would place annual State tax revenues in excess of $1 billion by 2015 from marijuana products alone, much less from all the ancillary products such as found in smoke shops, cannabis edible products or the cannabis oils used with electronic cigarettes.
MMJ Business Daily mentions in an article from Feb 20, 2013: “If the state (Colorado) actually adopts this (marijuana tourism) proposal, the initial market for marijuana would skyrocket beyond initial estimates of $1 billion, possibly doubling or even tripling that number and leading to thousands of new jobs. Link: http://mmjbusinessdaily.com/2013/02/20/marijuana-tourism-could-generate-billions-in-additional-revenues-for-cannabis-industry-in-colorado/
Furthering the nationwide momentum for marijuana legalization, on Thursday Feb 21st a Maryland lawmaker introduced a bill (House Bill # 1453) to legalize recreational marijuana sales for adults 21 years and older. Just like Colorado, the Maryland bill would create a system to tax and regulate marijuana like alcohol is presently regulated. The measure would direct the Maryland Comptroller to license marijuana retail stores, wholesale and testing facilities. The bill creates an excise tax of $50 per ounce on wholesale sales and directs certain proceeds to fund treatment programs involved with alcohol, tobacco and drug abuse.
Along with Maryland’s action on Feb 21, similar legislation was also introduced on this date in Maine to legalize marijuana for adult consumption. This now brings a total of six states (Maine, Maryland, New Hampshire, Pennsylvania, Rhode Island and Vermont) with pending legislation to legalize marijuana for recreational purposes. The winds of reform are clearly favorable and MJNA is poised to take advantage of the positive legislative moves throughout the country.
Medicinal Marijuana Around the World
Around the globe, there are more and more countries recognizing the medicinal values of marijuana – many have either decriminalized marijuana or approved it for medical usage.
Countries that have legalized medical marijuana for prescription by a physician include: Canada, the Netherlands, Germany, Austria, Finland, Italy, Spain, Israel, Portugal and most recently the Czech Republic
Countries that are considering or have considered legalizing recreational marijuana include: Uruguay, Guatemala, Mexico
In Uruguay President Jose Mujica had considered fully legalizing marijuana as a way to curtail drug trafficking and begin to rein in the illegal drug cartels that have wreaked havoc with many citizens. Although President Mujica has recently offered a slowdown in order to educate the Congress and the populace, he steadfastly endorses legalization. More info here:http://articles.timesofindia.indiatimes.com/2012-11-19/india/35204451_1_cultivation-marijuana-uruguayan-president-jose-mujica
In Guatemala, President Otto Perez Molina broke new ground by proposing legal regulation of marijuana in September 2012. A link can be found here:http://www.tokeofthetown.com/2012/09/guatemalas_president_lets_legalize_drugs.php
After the November 2012 ballot victories in Colorado and Washington States, the country of Mexico has decided to explore legalization of marijuana. Mexico has suffered mightily in the war on drugs and the new President, Enrique Pena Nieto says that the recent victories in the US “could bring us to rethinking the strategy.” More information here:http://www.yakimaherald.com/photosandvideos/internationalphotos/708287-8/mexico-considers-marijuana-legalization-after-ballot-wins-in
Billionaire businessman Richard Branson has weighed in on the cannabis issue. He believes that it should be taxed and regulated at the federal level and has given personal testimony to the UK Parliament about his vision for cannabis. This testimony was as part of a global commission on drug policy that included five ex-country presidents and former UN Secretary General Kofi Annan. Portions of his testimony are highlighted here:http://www.guardian.co.uk/politics/2012/jan/24/cannabis-tax-branson-mps-virgin
US Industrial Hemp
Legislation is also underway to legalize the growing of industrial hemp. The following states have made industrial hemp legal but have not begun to grow it because of resistance from the federal Drug Enforcement Agency (DEA): North Dakota, Maine, Hawaii, Kentucky, Maryland, Oregon, California, Montana, West Virginia and Vermont
The Kentucky Senate has passed recently (February 14, 2013) an additional bill regarding industrial hemp. The vote was 31 – 6 in favor of the bill that would license farmers to grow industrial hemp, hoping to force the federal government to legalize the crop at least within the State. Supportive Kentucky lawmakers hailed the move. “Industrial hemp won’t make us high but it might make us happy” said Sen. Kathy Stein (D-Lexington).
Colorado will soon have legislation on industrial hemp as well and full legalization of hemp was included along with the passage of Amendment 64 on Election Day 2012 which legalized marijuana within the State.
On Friday February 21st California introduced legislation to both the State House and Senate (S.B. 566 and A.B. 1137) to legalize industrial hemp production in the State. The legislation notes that California already imports “tens of thousands of acres’ worth of hemp seed, oil and fiber products that could be produced by California farmers at a more competitive price.” California Governor Brown has supported changes in federal law – previously he has stated “Products made from hemp – clothes, food and bath products – are already legally sold in California every day. It is absurd that hemp is being imported into the state, but our farmers cannot grow it.”
In Massachusetts, a bill to legalize hemp was recently refilled by state Rep. Chris Walsh (D-Framingham) that would legalize regulated production of the hemp plant in Massachusetts. More here: http://www.metrowestdailynews.com/features/x1522326785/Hemp-proponents-call-for-crops-legalization
In Washington State, a bill to legalize industrial hemp was introduced on Feb 13 2013 by State Rep. Matt Shea (H.B. 1888) which would permit the development of an industrial hemp industry within the state. More info: http://www.examiner.com/article/wash-state-lawmakers-attempt-to-legalize-industrial-hemp
Industrial Hemp Around the World
The world-leading producer of hemp is China, with smaller production in Europe, Chile and North Korea. Over thirty countries produce industrial hemp, including Australia, Austria, Canada, Chile, China, Denmark, Egypt, Finland, France, Germany, Great Britain, Hungary, India, Italy, Japan, Korea, Netherlands, New Zealand, Poland, Portugal, Romania, Russia, Slovenia, Spain, Sweden, Switzerland, Thailand, Turkey and Ukraine.
The United Kingdom and Germany resumed commercial production in the 1990s. British production is mostly used as bedding for horses; other uses are under development. Companies in Canada, the UK, the United States and Germany, among many others, process hemp seed into a growing range of food products and cosmetics; many traditional growing countries still continue to produce textile-grade fiber.
In Canada, commercial production of hemp has been permitted since 1996 under licenses and authorization issued by health Canada. It is expected that hemp will contribute over $100 million to the Canadian economy. France is the largest hemp producer in Europe where specialty pulp is used for cigarette and other “rolling” papers. It has been estimated that 11,000 hectares of land were used for hemp cultivation in Europe during 2010 (about 26,000 acres).
Medical Marijuana Inc. spends millions of dollars annually to grow and harvest industrial hemp overseas. Most of this hemp is used for our specialty high concentration Cannabidiol (CBD) hemp oil, which is produced via a proprietary extraction process. MJNA hopes to soon have industrial hemp cultivation operations and production facilities in the United States, although it remains to be seen whether the specialty high concentration Cannabidiol (CBD) cultivar will grow well here.
Medical Marijuana’s Prospects for 2013 and Beyond
In 2012 Medical Marijuana Inc’s Red Dice Holdings team built the Colorado market with the Dixie Elixirs family of products. The Company has captured a 90% market share with the Dixie products being sold in over 500 retail locations. During 2013, we expect to increase market share by developing licensing agreements in selected states across the United States as well as in countries around the world. The Company is currently negotiating licensing agreements and distribution contracts in California, Arizona Washington and the District of Columbia.
Internationally many similar opportunities exist to bring the MJNA portfolio of products to countries that have legalized medicinal marijuana. With the recent legalization of medical marijuana in the Czech Republic, Medical Marijuana Inc. is uniquely poised to provide its line of products throughout the country. The Company is well established in the Czech Republic and has been developing beneficial distribution relationships for some time.
In serving the non-marijuana community, the Red Dice Holdings team has developed several dietary and cosmecuetical products under the Dixie Botanicals brand. These products are legally sold within the US and throughout the world. The Dixie Botanicals products are infused with the Company’s unique high concentration Cannabidiol (CBD) hemp oil; ranging from 25mg to 500mg of Cannabidiol (CBD). The Company expects sales to increase significantly through the development of new sales channels, market awareness and a broader understanding of the health and wellness benefits derived from the Dixie Botanicals products.
MJNA has spent the past year building its brand and product platform. Today the Company has the most recognizable name brands in the industry. The core business focuses on the Dixie brand of products, Wellness Managed Services and CanChew Biotechnologies. Dixie is expected to have substantial growth through licensing and the acquisition, development and distribution of additional products. Wellness Managed Services focuses on growth through the acquisition of retail health and wellness facilities and management contracts. CanChew Biotechnologies is purely focused on its “Over the Counter” (OTC) product line, starting its clinical trials and expanding on its patents and intellectual property.
To illustrate the growth potential, Medical Marijuana Inc recently announced in their annual report growth projections for 2013 and 2014. For 2013, MJNA forecasts revenue to be $47 million with operating cash flows of $32 million and has the potential to increase revenues in 2014 to $155 million with operating cash flows of approx. $96 million.
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.
Investor Relations Contact:
Stuart T. Smith