Over the past few years, Medbox Inc (OTCMKTS:MDBX) has been one of the hottest names on the OTC markets. The company is one of the original hot marijuana stocks that soared to over $105 per share back in 2012. Now shares are in penny stock land and attempting to rise again on the back of a new agreement to sell Cannabidiol (CBD) oil.The exciting part about MDBX shares is that when they get going, they can really catch fire. However, over the past four months shares have been in a steady downward trend after rising almost 600% in September. Investors are just not as excited about pot stocks as they once were before. MDBX is trying to change that by entering new growth markets and expanding its existing line of Medbox vending machines and its Vaporfection vapor business.
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Shares bounced last week after MDBX signed a deal with Whole Hemp Company in Colorado. 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.MDBX interim CEO Jeff Goh said of the deal:
“Our agreement with Whole Hemp marks a major achievement for Medbox that is expected to bring in a meaningful revenue stream and provide multiple paths for additional growth in the years ahead. This agreement combines the strengths of both organizations to create tremendous value for all stakeholders."
This deal is a continuation of the MDBX strategy. The company’s goal is to provide specialized services to operators of dispensaries, cultivation centers, manufacturers and research facilities in those states where approved. Whole Hemp fits this mold is that they are a premier grower of industrial hemp and manufactures phyto Cannabinoid rich hemp oil (PC-rich) that can be used in many commercial applications.
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It won’t take much to move the needle for MDBX in terms of revenues. MDBX latest figures show that the company has recorded sales of just $390k through the first 9 months of 2015. This is down from $534k in revenues recorded during the same period in 2014. MDBX balance sheet shows $21 million in liabilities to just $9 million in assets. Management is aware of these weaknesses and looks to be trying to improve the company’s foundation by signing new deals. Earlier this month MDBX signed a deal with San Diego medical marijuana patient delivery service Sunrise Patient Group, a subsidiary of Rise Industries Inc. The deal goes into effect this month and will generate immediate revenue flow for MDBX.With a market cap of just $2.4 million and trading at just $.02 per share, MDBX could get investors excited again. We have seen explosive moves higher in the past for MDBX shares and look forward to the next surprise. In order to not miss out on the next big move in MDBX shares, sign up for the Insider Financial newsletter and get the latest on MDBX and all of our other hot stock picks.Disclosure: We one no shares of MDBX and have not been compensated for this article.
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