MedBox Inc. has seen a meteoric rise in its share price since last fall, piquing the interest of the mainstream investment community and drawing attention to medical marijuana stocks in general.
Much of the spike is tied to an avalanche of hype fueled by the financial press in the wake of marijuana legalization in Colorado and Washington. Because there are a relatively few number of shares available for public trading, even a slight increase in interest can send the price soaring. The stock (which trades on the over-the-counter market under the symbol MDBX) rocketed from a couple bucks a share in November to as much as $200 in a matter of days. MedBox shares have since come down significantly – they’re now under $50 – but are still well above where they were in the fall.
While the hype was a major factor in the stock’s rise, the company’s financial health appears to have improved as well.
California-based MedBox – which provides automated dispensing technology and consulting services to the MMJ industry and health care facilities – reported this week that revenues hit $4.5 million in 2012, a 32% increase from $3.4 million a year earlier. Income rose nearly ninefold, with MedBox posting a profit of $881,304 last year vs. $95,395 in 2011.
The company ended the year with about $1 million in cash compared with just $42,356 in December 2011, while cost of sales came in significantly lower and operating expenses as a percentage of costs dipped slightly.
It’s not all rosy, though. The fourth quarter was a mixed bag. Revenue came in at $956,526 and net income totaled $95,204. The company did not provide similar data for the same quarter of 2011, making comparisons difficult. But both numbers – and particularly the income figure – are less than the quarterly averages for the year. Perhaps that’s why the stock has dropped by about $7 a share since MedBox released its earnings earlier this week.
However, MedBox appears to be off to a good start in 2013: The company reported record revenues in January, saying sales came in at more than $900,000. It also announced today that it has acquired an equity stake in Bio-Tech Medical Software Inc. and has a new licensing agreement with the firm that could boost revenues.
“Our business continues to move forward at a rapid, but sensible, pace,” Medbox CEO Bruce Bedrick said in a release. “We have shown that our patented, innovative products – many of which cannot be duplicated – when combined with hard work and solid business practices, equal long-term success for our company’s clients and shareholders alike.”
MedBox, like most medical cannabis stocks, is thinly traded, and therefore huge price swings are common. So expect some volatility – in either direction – that’s not rooted in fundamentals.
The company is currently conducting an audit of its financial results and hopes to get listed on another, more prominent exchange – such as the Nasdaq – in the near future.