NEW YORK (MainStreet) — The Amway of CBDs and hemp products has been acquired by the first-ever publicly traded marijuana penny stock.
Medical Marijuana Inc. (MJNA) announced Thursday that it had acquired Kannaway, a network marketing company, for an undisclosed sum with the assistance ofHoulihan Capital, which has performed valuations ofUrban Outfitters, Tootsie Roll EnterprisesandU.S. Airways.
“Kannaway offers Medical Marijuana shareholders a unique, built-in educational and distribution network comprised of tens of thousands of Kannaway brand ambassadors,” says Michelle Sides, chief operating officer with Medical Marijuana.
Launched in April 2013, Kannaway says its mission is to educate consumers about hemp history in America. In the process, it has gained a following of hemp lifestyle enthusiasts called the Kannaway Nation.
“The Constitution was signed on hemp paper,” says Edgar Montero, vice president of international expansion with Kannaway.
The newly minted Kannaway Medical Marijuana will use the acquirer's financial, operational and technical resources to expand internationally and into new product areas, Montero says.
“We are looking to introduce nutritional products in the form of powders, proteins, supplements and sports drinks made with CBD, hemp proteins and other natural, organic and non-GMO compounds,” Montero says. “We want to bring the hemp plant and CBDs back into the consumer's daily diet.” CBD refers to cannabidiol, a compound in cannabis that is described as having medical effects without getting users high.
Valued at up to $242 million, Kannaway has products that include skin care and energy chews.
"Our skin care products are made locally in California, and the hemp and CBD oil we use we get from an MJNA subsidiary,” Montero says. “The mass use of hemp and CBD will make for a more green society.”
"What we bring to Medical Marijuana Inc. is an avenue to educate thousands of people about the misconception between cannabis, hemp, CBD and other compounds," Montero says. "Hemp can be transformed into 26,000 products, from fuel to paper and construction materials to plastics and asphalts. Anything you can do with oil, you can create with hemp."
With a U.S. sales staff of some 10,000 people and multiple offices in California, Atlanta, Dallas and Puerto Rico, Kannaway plans to expand with an additional 150,000 sales people in Europe and South America in 2015.
The Kannaway sales force may very well earn more than the 30% they currently do on direct sales.
"There are nine different ways our brand ambassadors are compensated, and we are going to be more aggressive with our compensation plan since we have new tools to bring additional value," Montero says.
One of Kannaway’s partnerships is with KannaLife Sciences, which holds a license of the CBD patent owned by the U.S. government. “We have right of first refusal for the non-pharmaceutical products created by KannaLife Sciences,” Montero says. “We created a new skincare line called Kanna Active through our partnership.”
Although KannaLife Sciences is also a subsidiary of Medical Marijuana Inc., Kannaway was in business with the company before its acquisition by Medical Marijuana this month.
“Kannaway is the Amway of hemp and CBDs,” Montero says. “With Medical Marijuana as our parent company, the story we can tell now is that we are the first cannabis company publicly traded in the world, and that brings the Kannaway brand more certainty and visibility.”
— By Juliette Fairley for MainStreet