What's the difference between medical marijuana stocks Growlife Inc. (OTCBB:PHOT), Medical Marijuana Inc. (OTCMKTS:MJNA), and Cannabis Science Inc. (OTCMKTS:CBIS)? More than you might think, and far more than the market has realized. Though traders have largely lumped MJNA, PHOT, and CBIS into the same group, one of these stocks is not like the other two.
While Medical Marijuana and Cannabis Science are focused on the development of cannabis-based products and/or plant buds that home-growers would use to start legally growing their own supply, Growlife supports the legal marijuana industry's customers by providing them with the equipment needed to make it possible.... lights, hydroponic setups, electronic meters and such.
In many ways it's the smarter side of the business for Growlife Inc. to be in. While marijuana may be legal for medical reasons in eighteen states and legal for recreational usage in two states (with more likely on the way real soon), clearly there's still a great deal of regulation to deal with; the rules are designed to keep home-grower operations small. At the same time, dispensaries have had - and always will - a ton of red tape to cut through. Point being, while opportunity exists for direct-suppliers like Cannabis Science Medical Marijuana, it's the tougher road to navigate.
Think of it like this. The gold rush of 1849 drew droves of people from the east to the western part of the country, in search of gold-prospecting fortunes. Most of those so-called 49'ers didn't make a penny, but do you know who made out like bandits? The folks selling picks and shovels.
In the same sense, Growlife is well-positioned to capitalize on the nation's slowly-growing adoption and acceptance of cannabis for medicinal purposes, and even recreational purposes. Indeed, the biggest piece of the PHOT portfolio is Phototron, which simply offers plant-growing systems, which face none of the regulatory hurdles MJNA and CBIS must deal with.
It's not just the company's product base that makes Growlife unique relative to other players in the game though. The company is the only hemp/cannabis small cap name that's fully reporting (to the SEC). PHOT has also refused to use table-pounding stock promoters to artificially inflate the stock's price, while some of its peers have. Though Growlife did get swept up with another stock's pumping effort over the past several months - because of the "rising tide lifts all boats" effect - it wasn't something the company had hoped for. Indeed, it was worked hard to maintain the same level of credibility a blue-chip would have; choosing to let Grassroots Research perform its unbiased assessment of the company rather than 'buying' a promoter's opinion in an effort to stir up a buzz.
That being said, traders are gradually figuring all of this out, and it's starting show up - even if faintly - on the charts of the three companies in question.
While Cannabis Science Inc. and Medical Marijuana Inc. shares have both fallen under their key 200-day moving average lines now that the effect of recent promotions have finally worn off, interestingly, Growlife Inc. shares have managed to find support at, and remain above, their 200-day moving average line. It's a big deal. In fact, the support at the 200-day average for PHOT almost looks like it's ready to spark a rebound in the stock, in the way it's sloped upward, and leading the stock to higher lows while pushing it up and into other key moving average lines.
The bottom line is, PHOT is a different kind of company than CBIS and MJNA. As more traders recognize this, it's apt to break away from the pack and reward investors that had enough patience and foresight to take the plunge.
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