Growth Driven by Demand and Sales of hempSMART(TM) Products
ESCONDIDO, Calif., May 21, 2019 (GLOBE NEWSWIRE) -- via NetworkWire – MARIJUANA COMPANY OF AMERICA, INC. (“MCOA” or the “Company”) (MCOA), an innovative hemp and cannabis corporation, today reported its financial results for the first quarter ended March 31, 2019.
First Quarter 2019 Financial and Operational Highlights:
- Total revenues were $114,810 for the quarter ended March 31, 2019, compared to $19,010 for the same period prior year, representing a 504% increase year-over-year. The increase was driven by growth in demand and sales of its hempSMART products in conjunction with the Company’s global expansion program.
- Gross profit for the first quarter of 2019 increased to $74,932, compared to $8,564 for the same period prior year. Gross margins expanded to 65.3% in the first quarter of 2019, compared to 45% from the first quarter of 2018.
- Total operating expenses for the first quarter of 2019 were $989,037, compared to $302,872 for the same period prior year, as a result of increases in SG&A associated with the growth of the Company’s dedicated associate sales program for its hempSMART sales.
- Net loss from operations was $4.2 million for the quarter ended March 31, 2019, compared to net income of $4.2 million for the quarter ended March 31, 2018. The previous year’s income was essentially due to gain in derivatives.
- Usage of cash flow from operations decreased year-over-year to $207,098 for the quarter ended March 31, 2019, from a cash usage of $497,250 for the quarter ended March 31, 2018.
- Total assets were $2,143,188 for the quarter ended March 31, 2019, an increase of 12% from $1,919,782 for the quarter ended March 31, 2018. The increase of total assets is due to an increase in cash, inventory and long-term investments that the Company made in the quarter.
- Total liabilities were $8,087,340 for the quarter ended March 31, 2019, compared to total liabilities of $5,053,887 for the quarter ended March 31, 2018. The increase of liabilities has largely to do with derivative liabilities increasing by $2.7 million and convertible notes issued during the quarter.
- In January, Marijuana Company of America announced that its Scio, Oregon, Hemp Project was underway alongside its 2019 hemp growers license renewal.
- The Company experienced a successful prelaunch of its hempSMART brand in the United Kingdom in January, followed by a U.S. Patent being issued for hempSMART Brain™ in February.
- In March, the Company entered into a Letter of Intent with Natural Plant Extract of California to form a joint venture to operate a California cannabis delivery service named Viva Buds™. The agreement was completed in April.
“Our first quarter results demonstrate our focus on laying the foundation and investments to establish our presence in the high-growth cannabis, hemp and CBD markets,” said Mr. Don Steinberg, Chief Executive Officer of Marijuana Company of America. “During the quarter, we successfully prelaunched our hempSMART line of products in the United Kingdom and promoted them at Super Bowl LIII. Our hempSMART Brain™ product was also issued a U.S. Patent, followed by the exciting news of our engagement with Natural Plant Extract of California to form a joint venture to operate a cannabis delivery service. Our passion from the beginning has been on our hempSMART wellness products, which continue to successfully generate demand and interest worldwide. As a result, we have significantly expanded our hemp research and growth business. With our powerful consortium of partners and joint venture relationships, we believe we are strategically positioned to vertically integrate our operations and further increase our revenue potential.”
“Our first quarter results reflect the full deployment of our marketing strategies for our products and our commitment to grow and strengthen shareholder value,” said Mr. Jesus Quintero, Chief Financial Officer of Marijuana Company of America.”
Further details about the Company’s financial results are available in its quarterly report on Form 10-Q, available in the investor relations section of the Company’s website at www.marijuanacompanyofamerica.com.
About Marijuana Company of America, Inc.
MCOA is a corporation that participates in: (1) product research and development of legal hemp-based consumer products under the brand name hempSMART™, which targets general health and well-being; (2) an affiliate marketing program to promote and sell its legal hemp-based consumer products containing CBD; (3) leasing of real property to separate business entities engaged in the growth and sale of cannabis in those states and jurisdictions where cannabis has been legalized and properly regulated for medicinal and recreational use; and (4) the expansion of its business into ancillary areas of the legalized cannabis and hemp industry as the legalized markets and opportunities in this segment mature and develop.
About Our hempSMART Products Containing CBD
The United States Food and Drug Administration (FDA) has not recognized CBD as a safe and effective drug for any indication. Our products containing CBD derived from industrial hemp are not marketed or sold based upon claims that their use is safe and effective treatment for any medical condition as drugs or dietary supplements subject to the FDA’s jurisdiction.
This news release contains “forward-looking statements” that are not purely historical and may include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs and results of new business opportunities, and words such as “anticipate,” “seek,” intend,” “believe,” “estimate,” “expect,” “project,” “plan” or similar phrases may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects, the future U.S. and global economies, the impact of competition and the Company’s reliance on existing regulations regarding the use and development of cannabis-based products. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K, our quarterly reports on Form 10-Q and other periodic reports filed from time to time with the Securities and Exchange Commission. For more information, please visit www.sec.gov.
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