Never mind that Forbes published a detailed and disturbing analysis of CannaVest (CANV), a marijuana stock that sure looks like a shell game. It barely has a business. Annual revenue came to $2.2 million last year. CannaVest said it had a “gross profit” of $1.3 million but it doesn’t explain what that means. Meanwhile, selling general and administrative expenses of $2.4 million, and the whole ball of yarn comes out to a net loss of $2.3 million.
Oh, and CannaVest had no revenue for 2012.
Shares in this so-called marijuana stock are up just 21% for the year-to-date to trade at $33 a pop. That’s after tumbling from a high of $165.
CannaVest isn’t even a marijuana stock. It has no connection to medical marijuana at all. This so-called marijuana stock sells health and wellness products made from hemp. Hemp is a cousin of marijuana (cannabis), but it’s used to make things like rope and oil.
Furthermore, the cannabidiol extracted from hemp might have therapeutic uses, but it’s still illegal under federal law. CannaVest is taking advantage of a gray area in the law in order to work with cannabidiol at all.
CannaVest has nothing to do with medical marijuana. It has no net income and paltry revenue. And yet the market cap is more than $1 billion. If that doesn’t strike you as odd, you might as well just set fire to your money.