Medical Marijuana Inc (OTCMKTS:MJNA) Still Has Some Potential Upside

Medical Marijuana Inc (OTCMKTS:MJNA) is more than 50% off its early November highs, and sentiment surrounding the company and its operations seems a little muted right now. We have kept an eye on this one for a while, however, and if there is one thing we can say about it, it is that when the industry moves, Medical Marijuana leads the pack as far as response is concerned. This ability to respond to industry catalysts makes it well worth keeping an eye on moving forward, given the current state of the marijuana space.With recreational marijuana now legal in a number of states, and this number only set to expand as we head into 2017 and beyond, some of the micro caps of today will prove industry juggernauts five years from now. We are not saying that Medical Marijuana is sure to be one such juggernaut, but its operations expose it to a wide range of industry components (it's got a finger in many pies), and this supports some upside medium term.Most recently, and perhaps most interestingly at the moment, the company just announced that Axim Biotechnologies Inc (OTCMKTS:AXIM), a company in which Medical Marijuana holds a circa 35% position, has filed an IP application related to THC extraction. The IP is – according to the release – a proprietary method to extract THC (which, for those not familiar with the term, is the active compound in marijuana) from cannabis plants, and achieve a higher level of purity of THC than can be achieved using current standard procedures. According to the information available, the process involves an initial extraction, which yields around 50% THC, and then a process involving a metal neutral salt solution and – in turn – a water/ethanol solution, to improve this number to a more than 95% yield.Basically, according to Axim, the medical and recreational marijuana industries have a real issue when it comes to standardizing extraction purity. The system that Axim has created is – purportedly – an answer to this issue.The problem right now, is that Axim is up considerably on the news, trading at a $434 millions market capitalization at last count, while Medical Marijuana remains flat, and – as mentioned above – remains down on its early November highs. To add some perspective, Axim is up 91% on its November 2 peak.Exactly why this disparity exists, remains unclear. With Medical Marijuana, the majority shareholder in Axim, the former's market cap should be rising on the back of the large gains we are seeing in the latter. It's not, and this suggests there's something unseen. Unseen translates to risk.It's a concern, yes, but not one that takes away from the company's overall upside potential. We're expecting the marijuana industry to continue growing once it pulls itself out of this correction, and of those companies that make up the space, Medical Marijuana remains one of the most prominent and relevant. It is generating revenues, which is more than can be said for a lot of companies in space, and furthermore, these revenues are expanding quarter over quarter. Gross profit is increasing while net loss is shrinking. Cash to debt isn’t great, and dilution is probably on the cards near term, but it is not crippling, and while the company continues to grow its revenues, it is serviceable.The bottom line here is that Medical Marijuana itself is a bit shaky from an analytical perspective, because it's share price doesn't seem to correlate with that of its major holdings. However, it does correlate with the wider industry, and given the activity we expect throughout 2017 in both the medical and recreational sides of the space, we think there's plenty of growth potential here.We will be updating our subscribers as soon as we know more. For the latest updates on MJNA, sign up below!Disclosure: We have no position in MJNA and have not been compensated for this article.