Medical Marijuana Inc. CEO Dr. Stuart Titus on the CBD revolution
Medical Marijuana Inc. (OTCMKTS:MJNA) is the very first medical cannabis company to be publicly traded in the United States. With a market cap of over US$500 million, it ranks among the most successful marijuana companies in the U.S. too. CEO Dr. Stuart Titus joins us to discuss his company’s business model.
Listen to the podcast interview with Dr. Stuart Titus:
James West: Stu, thanks for joining us today.
Dr. Stuart Titus: A great pleasure to be on with you.
James West: Stu, let’s talk a bit about the history of Medical Marijuana. You were the first one in the game in the United States on the publicly traded side, weren’t you?
Dr. Stuart Titus: Yes. Our company was the first publicly traded company in the United States in the industrial camp, medical cannabis space, and this is going back to March of 2009. I was personally involved as the Number 7 investor in the company.
James West: I see. So you started off as an investor, not as a sort of in-the-trenches founder, I guess, which you quickly became.
Dr. Stuart Titus: Yes, that’s correct, and then March of 2011 the new group came in who bought out the Medical Marijuana Inc. from the original founders, and this group had been researching CBD for about four years prior, and Mike built a very nice business relationship with some of the senior management people, and we’ve been working together diligently ever since.
James West: So your focus is not so much then on the THC-bearing recreational aspect; you’re specifically focused on the CBD therapeutic side?
Dr. Stuart Titus: So yes, our company does have four divisions in nutraceutical sales of hemp-based CBD products, but we also have two divisions that are in pharmaceutical development, and one of those divisions actually is on the THC side, combination THC/CBD medicated chewing gum that’s under clinical trials in Europe for pain and muscular spasticity indications in multiple sclerosis patients.
James West: Interesting. So, where do you see the biggest future for Medical Marijuana Inc?
Dr. Stuart Titus: Well, certainly we’re excited about the growing CBD market; we really think once it’s fully developed, this may rival the THC market, at least that the THC market has been developing for the last 50 years. CBD has been a relatively new phenomenon. But there are many people who want the medicinal benefits without necessarily having the high. Certainly THC has been shown to be a great pain-relieving attribute for many patients, and they obviously, we’re seeing states where medical cannabis is legal, a tremendous decrease in Medicare Part D spending – that’s your prescription drug coverage, which is down about 25 percent. So presumably many patients are switching from their prescription medications over to the natural botanical cannabis side, and are getting some good relief.
So, certainly we feel there’s a great opportunity in that space as well, although being a public company, we really can’t participate at this time until federal laws and regulations change.
James West: So since the DEA refused to reclassify marijuana last year, how has that impacted your ability to evolve CBD-centric products like the RSHOX?
Dr. Stuart Titus: Well, the DEA’s position on THC really didn’t have much of an impact on our business; it’s just something that our market is appealing to a little different crowd. Certainly hemp products, the hemp food products, are fully legal in the US as of 2004 with a Federal court ruling, so that particular ruling just delayed our entry into the THC side, but truly did not really have any impact on our CBD business.
James West: Okay. So what is the next step for the RSHO product in 2017 to get it out there into the market?
Dr. Stuart Titus: Well, certainly we’re excited about the international opportunities. Many countries accept products that are available here in the US as over-the-counter or nutraceutical products, but other countries actually accept these products with doctor prescription as a botanical remedy, and the opportunity to expand our operations into countries such as Brazil, Mexico, Paraguay, has been a tremendous thing for us, and certainly we look forward to growing international business as well as expanding our sales throughout the United States and domestic markets.
James West: Sure. What was your sales volume for CBD-related products in 2016?
Dr. Stuart Titus: So 2016 we haven’t fully reported our full year-end numbers yet, but we’re expecting it to be right around $8 million in sales, which is about what our sales numbers were the previous year. so we’re certainly believing that the expansion of these international markets, as well as increased awareness and education here in the US, is going to further drive sales, and we’re looking for 2017 to be a flagship and banner year for us.
James West: Mm-hmm. Okay, is the product going to be available in, for example, you mentioned a few countries there, but I didn’t hear anything like Canada. Do you have any plans to ship the product to Canada?
Dr. Stuart Titus: Well at this time, we’re waiting for the Canadian regulatory authorities to come out with their new regulations on medical cannabis, which of course will include CBD. Interestingly enough, in Canada, unlike the US, CBD currently is a scheduled substance, thus we’re not able to ship into the Canadian markets at this time. However, coming up this spring 2017 with the Trudeau administration and their new policies on medical cannabis, which will certainly include CBD, we believe that the opportunities will allow us to be shipping to Canada, hopefully sometime by this summer.
James West: Great. So, do you perceive a threat, risk, or opportunity in the choice of Jeff Sessions for Attorney General?
Dr. Stuart Titus: Well certainly the choice of Jeff Sessions as somewhat of a Conservative, kind of a, maybe you wouldn’t call him the most cannabis-friendly individual, you know, we certainly have seen a lot of opposition with administration and the heads of various government agencies in the past. Certainly we believe that looking overall at the Trump administration that Donald Trump really wanted to make America great again. Certainly we believe that this is one of the next great growth industries in all of America. Certainly there are a huge number of Americans employed in this arena and space, and we believe if we got legalization, if we got the banking, this is only going to further economic growth and development throughout the country.
So in looking at the overall picture, I think we’re very optimistic about our future.
James West: Stu, I see that you – does this company actually have 3.03 billion shares outstanding?
Dr. Stuart Titus: Our company has about 3 billion shares outstanding at this time, yes.
James West: Wow, that’s – I’ve never talked to a company with that kind of share float before. Is there any impetus or reason to roll the shares back so that earnings might accrue better in terms of earnings per share for investors, or what’s the strategy there?
Dr. Stuart Titus: Well certainly we’ve looked at a number of different strategies at this time, to try to fund some of our internal operations as well as fund some of our portfolio companies that are in pharmaceutical development. And certainly pharmaceutical development is not a cheap game, it’s certainly very intensive in terms of your upfront expenditures, though we truly believe for long term value of shareholders that these endeavours will pay significant rewards down the road – yes, this is something that we’ve been kicking around.
I don’t know that there’s anything coming up on the near term with it, but certainly we’re going to be addressing this fact, and I think once we’re in a comfortable position with cash flow and a little bit further along with some of our clinical development, some of our pharma development partners, like getting closer to the finish line, if you will, I think you’ll see us with a little different strategy. Kind of tying it all in with a future uplifting of our company’s shares to maybe a little higher level of exchange.
James West: Okay, great. Dr. Stuart Titus, thank you very much for your time today.
Dr. Stuart Titus: Absolutely. Great pleasure to be on, thank you so much for the wonderful questions, and the opportunity.
James West: Thank you. Bye for now.
Dr. Stuart Titus: Very good.
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