Medical Marijuana Inc. reported net income of $7.9 million in the third quarter, a nearly sevenfold increase from $1.2 million a year ago.
The publicly traded company, which develops a variety of products and services for the cannabis and hemp industries, generated $10.4 million in revenue. That’s more than triple the $3 million it reported in the same quarter of 2012.
The financial gains were fueled by an installment payment that is part of a previous deal involving a Medical Marijuana Inc. portfolio company. The payment totaled $10 million, most of it in stock.
Without that revenue, Medical Marijuana Inc.’s core business generated about $604,000 in revenue and posted a net loss of $86,463 – substantially lower than a year ago.
Some investors are concerned about what will happen once the installment payments run out. The last one is scheduled for the fourth quarter and will total $6.5 million. If the company can’t boost revenues from its core business by early next year, its financial health will look considerably different.
Medical Marijuana Inc. trades over-the-counter under the symbol MJNA.
Officials said operating expenses in the third quarter exceeded projections by about $250,000, mainly because of the company’s move to a new headquarters office, the hiring of additional executives and employees, product launches and legal counsel.
On the flip side, the company’s cost of goods sold was “significantly” less than projected.
Medical Marijuana Inc. acknowledged that it has experienced some “rough patches” in transitioning this year from a holding company to marketing and sales firm that also manages cannabis-related businesses.
But officials said they are optimistic about the fourth quarter, the progress the company is making and the future of the industry in general.