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Notis Global Inc (OTCMKTS:MDBX) Hoping For A Comeback

Notis Global Inc (OTCMKTS:MDBX) Hoping For A Comeback
Written by
Alex Carlson
Published on
March 15, 2016
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InsidrFinancial

Notis Global Inc (OTCMKTS:MDBX) has been hoping to get past the old Medbox name and move forward under the name Notis Global. However, a new name cannot escape the nightmare of dilution. Investors in MDBX are getting nervous after the company filed a Schedule 14A on March 2 about a board meeting on April 15. The primary goal of this meeting is to approve another authorized share increase. This time MDBX is proposing an increase from 400,000,000 to 10,000,000,000 shares. The same filing also said that the company will issue 1.6 billion shares due to note conversion plus shares for warrants. Overall, this is not promising news for existing shareholders.Notis Global says that it is "a pioneer in the burgeoning, multi-billion dollar legal cannabis industry. The company and its partners are working to bring best practices and drive significant revenues in the cannabis industry. Through key partnerships, Notis is a leading U.S. based provider of Cannabidiol (CBD) oil and is a partner in one of the largest hemp operations in the United States. Notis also invests and partners in the the operation of several licensed retail dispensaries across the country." In the latest shareholder updates, the company said:

In conjunction with its partners, including Whole Hemp Company, Notis is on track to be one of the largest U.S. growers, processors and revenue producers of hemp products from seed to sale. With cultivation facilities located in Pueblo, Colo., Notis uses best farming practices, growing product outdoors and in greenhouse facilities. Notis is positioned to become a leading U.S. based provider of Cannabidiol (CBD) oil with a dedicated sales team, driving revenue and bringing the product to market. Through key partnerships, Notis is working with some of the world's leading researchers on continuous innovations of CBD-related medical products to help patients around the world.

The deal with Whole Hemp is a bright spot for the company. The terms of the agreement call for MDBX to receive 50% of the sales of hemp and cannabis crops grown on a dedicated 40-acre parcel of land on Whole Hemp’s Colorado Springs farm and on approximately 10 acres of land on the Medbox farm in Pueblo, Colorado. MDBX will also build 10,000 square foot greenhouses on its Pueblo property and Whole Hemp Company will pay for their construction. Next year, the two companies plan to cultivate hemp on 1,000 acres of Colorado farmland owned by Whole Hemp. Overall, the deal looks to be a win-win for MDBX and Whole Hemp.In looking at the financials, it's not a pretty picture for MDBX. For the quarter ended September 30 2015, the company posted revenues of just $342k and recorded a net loss of $9.2 million. Over the past four quarters, MDBX has lost a cumulative of $34.8 million. Most of the money spent has been selling, general and administrative expenses. Management has done an excellent job of burning through money as fast it can.We think the only event that can get shares of MDBX moving again is renewed interest from investors in pot stocks. If investors start buying the entire sector on the back of a new green rush, MDBX could benefit. Roughly 14 states could legalize marijuana this year, adult-use cannabis or possibly both, either at the ballot box or through state legislatures. While it’s doubtful all those states will be successful, there’s a good chance at least a handful will legalize in 2016. No other single year has offered such incredible promise in terms of the sheer volume of states that could legalize, thanks to other pioneering marijuana markets and growing support for cannabis in general.MDBX may have a new name, but it still remains the same Medbox with the same share structure, bad management, and upcoming dilution. On March 21, MDBX will trade as NGBL. We don't think that will help either. We will be updating Insider Financial as soon as we know more. For continuing coverage on MDBX and our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in MDBX and have not been compensated for this article.

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