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Medical Marijuana Investing Abroad

Canipa Holdings Strikes European Deal

Written by Brian Hicks
Posted August 2, 2013

As the medical marijuana market continues to heat up and expand within the U.S., some companies appear to be more ambitious than others. Allow me to introduce Medical Marijuana Inc. (OTC: MJNA), which is—via its subsidiary Canipa Holdings—looking to target European markets.

Canipa has, MarketWatch reports, signed an exclusive international distribution and marketing agreement with an unnamed Europe-based pharma/nutra/cosmetics company. The European company, which has a portfolio of more than 20 hemp-based consumer products, will have its marketing and distribution managed by Canipa, and the products will be added to the HempMedsPX platform.

From MarketWatch:

"Some of the products Canipa Holdings will be marketing and selling are approved for specific medical claims in parts of the European market," says Charles Vest, Director of Communications for HempMedsPX, the marketing company for Medical Marijuana Inc. and all MJNA subsidiary companies. "We want to make clear, however, that these products will be marketed as consumer-only in the United States and its territories."

This is pretty major stuff. It’s the biggest such deal Canipa Holdings has signed so far. Canipa also gains exclusive online marketing and sales rights for the brand new portfolio, and on top of that, the company will also be the sole brick-and-mortar retail presence for these hemp-based consumables across the U.S. (where feasible legally), as well as in Canada and Mexico.

The deal does exclude certain regions—namely, the Middle East, Poland, the Czech Republic, Hungary, Slovakia, and Latvia.

It appears that most of the products on the new portfolio are available for sale in more than 2,000 pharmacies spread over 1,000 retail stores across Europe. Currently, Canipa is working out regulatory matters and will make a product offering announcement in due time.

Indeed, the company includes Canada and the Caribbean Islands in its anticipated markets list. Let’s not forget that Italy and the Czech Republic recently legalized medical marijuana, indicating a parallel wave of pro-marijuana legislation creeping across Europe even as more and more U.S. states seek to decriminalize or legalize medical marijuana.

Stock prices for Medical Marijuana Inc. have held around $0.30/share for the past few weeks, but it’s hard not to see the benefit of this latest development; markets posted an 11 percent increase, which subsequently evened out.

This company is clearly making a reputation for itself as one of the early successes of the burgeoning marijuana market. The company mainly manufactures cannabis-based products that can be sold over the counter, mostly as health and wellness products. This new expansion outside the borders of the U.S. is highly promising, and investors should certainly take note.

A Euro-American Market for Marijuana?

There could very well emerge a Euro-American market, wherein European nations import marijuana-based products grown here in the U.S. I’m not sure Uncle Sam would object to the extra revenue. Let’s also not forget that medical marijuana is already legal in several states here in the U.S., and that Colorado and Washington have both actually legalized marijuana for recreational usage.

It’s no coincidence, surely, that Medical Marijuana Inc. has chosen this time to try and break into European markets. A European wave of marijuana legalization seems underway, and the company appears well-positioned to make the most of it.

The subsidiary company, Canipa Holdings, was created specifically to help Medical Marijuana Inc. expand through Europe, the Middle East, and Asia. The company works to obtain product and marketing approvals and also procure distribution partners and rights in various territories, according to Medical Marijuana’s portfolio of products.

HempsMedPX is a platform that offers distribution, contracting, and marketing for both the CannaVest Corp. and Medical Marijuana Inc. product portfolios. It covers a full range of services, including marketing, sales, customer service, and logistics, alongside distribution. It is, essentially, a communication hub of sorts for the companies under the umbrella of Medical Marijuana Inc.

This development is something all investors curious about the medical marijuana market should observe closely. Clearly, the market reacted favorably to Medical Marijuana’s move. It remains to be seen what the long-term impact is, and that undoubtedly depends on whether Canipa Holdings can successfully execute its European strategy.

If the company indeed sets up a profitable European arm of operations, you may be sure that other companies will be looking to follow suit. Such expansion is, without a doubt, a good thing for the emergent marijuana market.

 

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