Marijuana Company Of America Inc (OTCMKTS:MCOA) Is Pitching To Become The Next Herbalife Ltd (NYSE:HLF)

Marijuana Company Of America Inc (OTCMKTS:MCOA) is an interesting one. The company soared throughout late October, Early November, running from $.004 to November 7 highs of $.13 – gains just shy of 3000% across the period.We're bang in the middle of a corrective phase right now, alongside most of the cannabis space, and for some companies this could be a great opportunity to load up ahead of a return to the upside.Marijuana Company Of America just updated markets as to the progress of its lead and inaugural product, and while the product itself looks interesting, the strategy behind its distribution could be more interesting long term.Here's why.First, a quick look at the product. It's a wellness product called hempSMART Brain, and as per this announcement, marketing kicked off on November 7. It’s a CBD product combined with a bunch of branded ingredients, and it can purportedly improve brain function and brain health. Exactly how, we're not sure. Here's the blurb:

"The core nootropic and adaptogenic ingredients in hempSMART are supported by cutting edge research at verified functional levels."

That's pretty vague, and while the ingredients are listed as "clinically validated", the product itself isn’t proven by way of the traditional FDA approval process, at least not as a pharmaceutical product, but we don't see that as too big of a deal. These health and wellness products sell to the tune of billions of dollars annually without having to claim FDA backed pharmaceutical benefit, and there's no reason Marijuana Company Of America can't take a segment of this market with hempSMART. At root, it's all about marketing, and this is where our real interest in this company comes in to play.It's stayed pretty quiet about it to date, but a look at the fresh product website reveals what looks to be a pretty aggressive campaign to bring distributors on board, as part of what we'll call for the sake of clarity (but what we're sure the company would dispute if questioned) something that resembles a multi level marketing (MLM) model.The company is offering a discount-to-retail to individuals that come on board as distributors, and then encouraging those distributors to sign up a team of level-down distributors, and share a percentage of the revenues generated from their team. A great example is Herbalife Ltd. (NYSE:HLF). Readers will probably know this one by way of its continuous coverage on the back of an Ackman/Pershing short, and a competing Icahn long. Icahn is very much in the driver's seat right now, and Herbalife holds a just shy of $5 billion valuation.So here's our thesis.If Marijuana Company Of America can employ a similar distribution strategy as does Herbalife, and it looks very much like it's attempting to do just that, it could generate substantial revenues from its hempSMART range. The initial product is on shelves, and the program is underway. We're looking for some clarification into distribution stats (how many people have come on board, team size, order size etc.) going forward as an indication of how well it's executing on this strategy, and in turn, its potential.Right now, we think it's a smart move to go down the pseudo-MLM route, with Herbalife already demonstrating that with correct execution it can be a winning strategy, regardless of the debatable ethical and regulatory framework that underpins it.There's a cash risk here, but that's to be expected with a company that just launched its inaugural product. Debt is a concern also (especially in light of the lack of any significant assets), but again, this is a high growth space, and these numbers could quickly straighten out if hempSMART catches a tailwind on product shift.Check out the distributor pitch/compensation plan here.We will be updating our subscribers as soon as we know more. For the latest updates on MCOA, sign up below!Disclosure: We have no position in MCOA and have not been compensated for this article.