Even though medical marijuana is legal in 24 states and recreational cannabis initiatives are gaining traction throughout the U.S., weed is still a touchy topic for most in the medical profession. Sure, some trusted doctors will talk openly about marijuana’s legitimacy as medicine – and many more are coming on board – but journalists’ interview requests to major hospitals and medical schools are still met with a nervous, “Uh, we can’t talk about that on the record.” Which is why Walgreens’ latest Tumblr post is so remarkable.
Walgreens, the largest drug retailing chain in the U.S. with more than 8,000 stores in all 50 states, is now tackling the subject of medical marijuana. Right above a recipe for “All natural fruit roll-ups” on Walgreens’ Tumblr is the headline: “What is medical marijuana?” And its tone is surprisingly sane and straightforward, especially for one of the largest pharmacies in the world.
“The healing properties of marijuana are due to its high cannabidiol content,” the Walgreens blog post reads.
“Marijuana also contains tetrahydrocannabinol, a molecule that can stimulate appetite, decrease nausea, reduce pain and produce a psychoactive effect.”
The post, written by Dahlia Sultan – a resident at the University of Illinois at Chicago’s College of Pharmacy – talks plainly about cannabis’ dangers: “Research has indicated it may impair your lungs, memory, and judgment.” But it also addresses the medical conditions marijuana has been proven to successfully treat.
“Research has also shown marijuana provides pain relief in ways traditional pain medicines don’t. Medical marijuana can improve appetite and relieve nausea in those who have cancer and it may help relieve symptoms such as muscle stiffness in people who have multiple sclerosis.”
We’ve written about many of these studies, and we also covered the Journal of the American Medical Association’s 2015 analysis that showed cannabis as a legitimate treatment for some ailments – including severe pain, nausea, and vomiting related to chemotherapy and spasticity from multiple sclerosis – while its efficacy regarding most conditions is unproven in part because of research blockades.
For America’s largest retailer of pharmaceuticals to speak this straightforwardly about cannabis certainly signals a sea change. The Walgreens blog encourages readers, “If you’d like more information about the use of medical marijuana, talk with your doctor.”
As cannabis financial analyst Alan Brochstein points out in New Cannabis Ventures, “I can’t recall any S&P 500 company ever sharing such a supportive view, especially one that is involved in the lives of so many people who count on it for advice on health and wellness.”
The last line of the Walgreens blog points out an interesting if obvious fact: “Disclaimer: Walgreens is not a licensed medical marijuana provider.” Perhaps the company recognizes that – as cannabis-derived prescription drugs continue their march toward possible FDA approval – that won’t always be the case ?
Arkansas may surprisingly be the first state in the South to legalize marijuana. Although this seems ridiculous and to some even unlikely, cannabis proponents learned this week that their bill looking to legalize marijuana in the state now may be plausible before voters get their vote in November. This week, after turning down a proposed ballot initiative almost ten times, the Arkansas Attorney General, Leslie Rutledge, finally signed the initiative that would allow “cultivation, production, distribution, sale, possession, and use of the cannabis plant and cannabis-related products” recreationally as well as medically.
The Arkansas Cannabis Amendment (ACA), which was proposed by Summit resident Mary Berry, may be one of the most thorough cannabis ballot measures to ever come about over the last twenty years in the United States. That is because instead of isolating a certain portion of cannabis smokers, the initiative looks just to end the state’s prohibition by allowing all adults aged twenty-one or older to use cannabis where they believe it would suit them best.
“It’s going to be treated very similar to alcohol,” Don Lane of Arkansas True Grass said in an interview. “The medicinal people will get what they need, the people who like to sit down and have a beer on the weekends can sit down and have some cannabis on the weekends.”
The proposed ballot initiative indicates that cannabis would be sold throughout Arkansas in retail outlets. Each transaction on recreational cannabis would come with a five percent tax along with the state’s typical 6.5 percent sales tax. The sale of cannabis to patients with a written recommendation from a licensed specialist would not be taxed. The more interesting part about the Arkansas Cannabis Amendment is how devoted it is to home cultivation. Although it seems ridiculous, Arkansas may be the pioneer for legal marijuana in the south.
Form 10-Q/A for PAZOO, INC.
This Quarterly Report on Form 10-Q contains terminology referring to Pazoo, Inc., such as “us,” “our,” and “the Company.”
Management intends the following discussion to assist in the understanding of our financial position and our results of operations for the three months and six months ended June 30, 2015 and June 30, 2014.
Pazoo (“Pazoo”) was incorporated in Nevada on November 16, 2010 under the name “IUCSS, Inc.” A name change from IUCSS, Inc. to Pazoo occurred on May 9, 2011. We are a health and wellness company. Presently, our primary business is Pazoo.com, an online, content driven, ad supported health and wellness web site for people and their pets. Additionally, this site has e-commerce functionality which allows Pazoo.com to be an online retailer of nutritional foods/supplements, wellness goods, and fitness apparel. Pazoo, Inc. does not have any brick and mortar establishments. At present our only revenue source is www.pazoo.com which generates product sales and online advertising revenue. As of June 30, 2015, we had total assets of $2,299,761 and plan to make additional investments in online content.
Pazoo, Inc., is a company focused on health, wellness and safety. Our focus is to provide best-in-class laboratory testing of cannabis and cannabinoids to protect consumers from impurities, contaminants and other irregularities. Through our wholly-owned subsidiary, Harris Lee, and our partnership with MA & Associates, Pazoo provides industry-leading laboratory testing of cannabis. Harris Lee’s and MA’s license agreements with Steep Hill Labs, Inc. allows the Pazoo subsidiaries to use Steep Hill’s top-rated testing protocols in select markets as we expand throughout the USA. Pazoo’s subsidiaries are currently licensed to test cannabis in Nevada, Oregon and Colorado, with other states to come. Additionally, Pazoo delivers a comprehensive array of health and wellness information on its website www.pazoo.com.
Our principal executive offices are located at 760 Route 10, Suite 203, Whippany, New Jersey 07981. Our telephone number is (855) PAZOO-US. Our internet address is www.pazoo.com.
Sources of Revenue
We currently have three lines of business relating to and revolving around the health and wellness arena:
? Advertising Revenue from Our Website, www.pazoo.com. Through advertising providers and agencies, pazoo.com is paid for every ad impression that appears on a page for which a visitor goes to. As we build our visitor base, ad revenue will increase. However, just having the traffic does not effectively increase advertising revenue. To get the full value of each visitor, the time on site must be long enough so that a visitor is interested in going to multiple pages for which there are ads on each page. The only way this will transpire is if the visitor’s experience is gratifying. This is why pazoo.com is so focused on quality content that’s interesting and informative. A bad visitor experience will result in a low time on site and fewer page views. Internet tracking tools have much improved over the past decade and will continue to improve in the coming years, especially when it comes to advertising and overall website analytics. Pazoo continues to constantly improve is this area at all times.
Pazoo.com has a unique and compelling online marketing platform. Pazoo.com offers the following important marketing advantages to its target audiences:
1. A comprehensive solution as a content source – information on a full spectrum of disciplines within the health and wellness marketplace;
2. Health and wellness experts that have expertise in these varied disciplines and write about their areas expertise; and
3. Content that is both for the health and wellness of people as well as their pets (over 60% of American homes have pets).
1. An e-commerce platform that is functional;
2. Relationships with manufacturers, distributors and other e-commerce companies so that increasing product offerings will not be time consuming;
3. Members on the pazoo.com content team with merchandising experience: i.e. a Pazoo expert is buyer of pet products for a large pet retailer; and
4. Members on the pazoo.com content team that are experienced in e-commerce marketing; i.e. we will look to offer our consumers low cost and timely delivery of product by negotiating with shipping companies to offer a flat rates on various products.
? Pharmaceutical Testing Facilities. We entered this arena through our April 2014 acquisition of a 40% minority equity stake in MA & Associates, LLC. MA & Associates was launched in September of 2013 to provide quality control services to the medical cannabis industry. MA & Associates’ primary mission is to protect the public health by providing infrastructure and analytical services to legally authorized distributors and producers of cannabis and to regulators tracking their operations. As of June, 2015, we have acquired a 100% equity state in MA & Associates, LLC and the testing laboratory in Las Vegas Nevada is open for business.
The company will provide the medical cannabis industry guidelines on how the regulation and inspection by public health authorities is to be implemented. MA & Associates’ primary customer base includes all of the licensed cannabis cultivators, in the State of Nevada, and their customers are required by law to have their products tested before they can be transferred to the dispensaries.
We have further expanded our footprint in this arena through our acquisition of 100% stake in Harris Lee Holdings, LLC, a company formed to take the MA & Associates testing model outside of Nevada and into other states. The company is currently in the process of partnering with Harris Lee Colorado, LLC to take over an existing lab in Denver, Colorado, and just announced it has leased a space in Portland, Oregon where it will be establishing a testing lab. We are in a unique position to provide the mandated health and safety testing upon which this burgeoning industry must hinge moving forward.
Critical Accounting Policy and Estimates Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Results of Operations
Comparison of the three months ended June 30, 2015 to the three months ended June 30, 2014
Net Sales. We had net sales of $1,399 and $34,093 in the three months ended June 30, 2015 and June 30, 2014, respectively.
Cost of Goods Sold. We had cost of goods sold of zero and $244 in the three months ended June 30, 2015 and June 30, 2014, respectively.
Operating Expenses. Operating expenses consisted primarily of selling, general and administrative expenses and professional fees. Total operating expenses increased to $750,227 for the three month period ended June 30, 2015 from $492,211 for the three month period ended June 30, 2014. The components of operating expenses are detailed below.
Selling, General and Administrative expenses increased to $401,921 from $320,808, in 2015 versus 2014 which was mainly comprised of professional fees, stock compensation, and marketing & advertising.
Professional fees increased to $299,035 from $136,701 in 2015 versus 2014. The increase in professional fees was attributed to an increase in investor relations and investor consultants.
Results of Operations
Comparison of the six months ended June 30, 2015 to the six months ended June 30, 2014
Net Sales. We had net sales of $21,632 and $51,419 in the six months ended June 30, 2015 and June 30, 2014, respectively.
Cost of Goods Sold. We had cost of goods sold of zero and $569 in the six months ended June 30, 2015 and June 30, 2014, respectively.
Operating Expenses. Operating expenses consisted primarily of selling, general and administrative expenses and professional fees. Total operating expenses increased to $2,116,730 for the six month period ended June 30, 2015 from $834,283 for the six month period ended June 30, 2014. The components of operating expenses are detailed below.
Selling, General and Administrative expenses increased to $1,482,783 from $605,039, in 2015 versus 2014 which was mainly comprised of professional fees, stock compensation, and marketing & advertising.
Professional fees increased to $527,556 from $172,134 in 2015 versus 2014. The increase in professional fees was attributed to an increase in investor relations and investor consultants.
Net Loss. Our net loss increased to $4,221,774 for the six months ended June 30, 2015 from $1,132,733 for the same period in 2014. The increase is primarily attributable to higher operating expense, as outlined above.
Liquidity and Capital Resources. In the six month period ended June 30, 2015, we had outstanding 667,848,681 common shares, 2,463,526 Series A Preferred Stock shares, 1,637,500 Series B preferred stock, and 1,080,000 shares of Series C Preferred Stock shares to fund business operations and invest in companies.
Our total assets were $2,299,761 as of June 30, 2015, which primarily consisted of goodwill, intangible assets and accounts receivable primarily for advertising revenue.
We had negative working capital of $2,713,250 as of June 30, 2015.
Our total liabilities were $4,311,103 which was mainly comprised of derivative liabilities of $1,542,994, convertible debt of $1,152,240 and contingent consideration liabilities of $1,228,581.
Our total stockholder’s deficit as of June 30, 2015 was $2,011,343 and we had a retained deficit of $11,641,724 through the same period.
We used $1,067,321 in net cash for operating activities for the six months ended June 30, 2015, which included a net loss of $4,221,774 and gain on derivative liability of $6,031.
We had $1,084,341 net cash used in investing activities in the six month period ended June 30, 2015 due primarily to investment in MA & Associates.
We had $1,570,667 net cash provided by financing activities in the six month period ended June 30, 2015 due primarily to borrowings on convertible notes and proceeds from sale of Series A preferred stock and warrants.
As of June 30, 2015, we had no formal long-term lines of credit or bank financing arrangements.
Off-Balance Sheet Arrangements. We have no off-balance sheet arrangements.
In accordance with FASB ASC 855-10-50-1 we evaluated our subsequent events through August 14, 2015. Refer to Note 9, Subsequent Events, for detailed information.
On this week’s “IT’S TIME!” show Buffer’s guest is none other than Mills and Buffer, who is the Founder of MED-X, Inc., as well as the COO, which is a company that is taking advantage of the booming Marijuana industry in the United States at full force with products that offer effective nontoxic and 100% all-natural pest management for marijuana growers. These same products today are being utilized and spread throughout the pest control and hospitality sector nationally. Mills and Buffer also talked about the unique business ventures MED-X offers thru StartEngine.com allowing potential investors to get in on the action and purchase shares of the stock in the company. With a very interesting interview that displayed the flip side of the coin and how a new creative business can be set into motion in America today in a way that was not available to entrepreneurs just a few years ago.
There are just five more months before medical cannabis outlets can be opened in Hawaii. However, business owners may still be seeing obstacles that have not been seen before in the archipelago. Dispensaries can open during the middle of July. However, industry experts state that they may be confronted with challenged that those in other states do not need to face. For instance, there are concerns over trade over the water and such. Also, there are not many labs to test crops at which is another issue state lawmakers must deal with.
“Hawaii is going to be a really interesting market in general, basically because of the geography,” Chris Walsh, managing editor of Marijuana Business Daily, stated. “First, it’s a chain of islands separated by bodies of water, and second, it’s remote.”
At the moment, the Hawaii Department of Health is looking at dispensary applications, and will likely begin giving out licenses in April. Woody Harrelson, an actor, and huge cannabis activist, as well Henk Rogers, a video game designer, are one of the fifty-nine residents who applied for licenses. Thanks to a law passed in 2015, Hawaii will give out eight licenses to cannabis businesses, each of which will be able to have two production centers and two dispensaries. Three licenses “will be awarded for Oahu, two for Hawaii Island, two for Maui and one for Kauai.”
The same law did not allow for inter-island trade. Cannabis activists state that this will separate the industry into unique economies on each part of the archipelago, which is unique to just Hawaii. Also, there could be cannabis shortages, and even not allow some businesses to sell cannabis until laboratories are allowed.
All medical cannabis must be examined in a laboratory approved by the state before it is distributed. However, there are none in the state of islands. Some are concerned that expensive startups and low patient numbers will not allow laboratories to be approved.
“Clearly, not every island can support a full-on laboratory,” Pam Lichty, president of the Drug Policy Action Group, stated.
With less than five months to go before medical marijuana dispensaries can open in Hawaii, business owners could be facing unique obstacles in a state of islands separated by federal waters. Dispensaries can open as soon as July 15, but industry experts say they could be confronted with challenges unlike those in other states, such as navigating rules that ban inter-island transport and limit the number of growers – all of which could cause marijuana shortages.
“Hawaii is going to be a really interesting market in general, basically because of the geography,” said Chris Walsh, managing editor of Marijuana Business Daily.
Actor and marijuana advocate Woody Harrelson and video game designer Henk Rogers are among 59 Hawaii residents who have applied for licenses. Under a law passed in 2015, Hawaii will grant eight licenses for marijuana businesses, each of which can have two production centers and two dispensaries. Marijuana advocates say that will separate the industry into distinct economies on each island, unlike other states.
All medical marijuana must be tested in a state-approved laboratory before it’s sold, but currently, there are none in Hawaii. In response, Hawaii lawmakers are considering whether to allow marijuana to be transported to another island if a laboratory isn’t available. Rep. Della Au Belatti, who introduced the bill, said lawmakers are trying to figure out how to get around federal laws that prevent marijuana from being transported by sea or air.
Some airports in Washington, Oregon, and Alaska allow travelers to fly with marijuana, airport officials told The Associated Press. The Federal Aviation Administration is required to revoke pilots’ licenses if they knowingly commit a federal crime involving a controlled substance on an aircraft – for instance, transporting marijuana. The Department of Justice says it is less likely to interfere with state marijuana programs as long as they’re well-regulated, according to a 2013 memo.
Medical marijuana advocates in Hawaii say patients would benefit from relaxed laws on inter-island transport. Hawaii’s medical marijuana industry could also face other problems, such as the nation’s highest electricity costs and a thriving underground market. Hawaii was the first state to legalize medical marijuana through the legislative process 16 years ago, which means many patients already know where to find marijuana.
While medical marijuana patients in Canada currently only have access to their medicine by way of mail order, the nation’s largest drugstore chain hopes to expand the distribution by stocking a variety of cannabis products in over a thousand stores across the 10 provinces. Shoppers Drug Mart Corp. is reportedly in negotiations with a number of cannabis producers all over the country in an attempt to strike a package and supply deal that would allow all of the company’s 1,300 pharmacies to carry a generic version of marijuana branded with the Shoppers name. A report from The Globe and Mail indicates that a group of executives from the company have been engaged in a number of meetings with federally licensed pot producers over the past few weeks in hopes taking Canada’s medical marijuana program to the next level. A representative for the drugstore chain confirmed these plans by suggesting that trained pharmacists should be responsible for dispensing cannabis medicine.
“Pharmacists are medication experts and play a significant role in the prescribing and monitoring of medication to ensure safe and optimal use,” Tammy Smitham, a company spokesperson, told G&M. “We believe that dispensing medical marijuana through pharmacy, like other medications, is the safest option.”
The implications behind this deal are immense, especially considering that the Canadian government is now working to completely end pot prohibition and wants to establish a taxed and regulated marketplace for which to allow its citizens to purchase weed no differently than they do beer. By getting the ball rolling, Shoppers Drug Mart is positioning itself to become one of Canada’s first national retail outlets to sell cannabis products to the masses – a concept equal to stores such as CVS and Wal-Mart selling alcohol in the United States.
Although Canadian pharmacies were not originally keen on the idea of selling medical marijuana, a recent Supreme Court ruling allowing edible cannabis to be used by patients has opened up some of these companies to the idea of getting in on the business. Pharmacies, like Shoppers, would not likely sell raw cannabis as it is typical seen in dispensaries here in the U.S., but they would stock various oils and other edible products.
In order for any pharmacy chain to begin selling medical marijuana, they would first need to obtain permission in the form of a distribution license from Health Canada. As it stands, medical marijuana is sold exclusively online. Interestingly, once the U.S. government finally decides to legalize marijuana for medicinal use, it can be expected that many national retail chains will jump onboard in an effort to cash in on a billion dollar industry. This is when everything will start to change in the realm of those medical marijuana program designed for individual states.
It has become crucial at this juncture to understand that the nationwide legalization of medical marijuana stands to eliminate a number of liberties enjoyed by patients in many of the 23 states and the District of Columbia with programs already in place. The federal government is never going to allow cannabis to be “Smoked” as long as it is deemed “For medicinal purposes only,” which is all the more reason for the collective marijuana reform community to rally in support of ending prohibition, once and for all. By treating marijuana similar to alcohol and tobacco, the majority of our freedoms, specifically the ability to “Smoke pot,” would remain intact, and every adult citizen would be allowed to use cannabis products for whatever purpose they see fit.
There are a ton of people who enjoy getting a bit impaired after smoking marijuana. However, there are some people who become paranoid after smoking, but why? Well, a group of researchers from England has discovered a gene that may forecast the probability of a person experiencing psychosis after smoking marijuana. Remarkable efforts over the last decade have been put into finding genetic factors that may indicate that a person’s reaction to cannabis will include bad psychological effects. There have been many interesting results as well, most recently from England; a new study has made the belief that genetics can indicate one’s experience while high more concrete.
The experience more specifically being observed is cannabis-induced psychosis, but what is that? In the past, many scientists have connected psychosis with smoking marijuana; this was also known as ‘reefer madness.’ Nowadays, little to nobody actually believes that marijuana will turn someone into marijuana, but despite that, there is still an evident connection between marijuana and psychotic episodes. The risk is minuscule, and not that many smokers will experience a bit of psychosis.
“Putting yourself repeatedly in a psychotic or paranoid state might be one reason these people could go on to develop psychosis when they might not have done otherwise. Although cannabis-induced psychosis is very rare, when it happens it can have a terrible impact on the lives of young people. This research could help pave the way towards the prevention and treatment of cannabis psychosis,” Celia Morgan, Professor of Psychopharmacology at the University of Exeter and lead author of the report, stated.
Research of the past has linked the connection between psychosis and cannabis use in those that have previously been diagnosed with schizophrenia and even found various genes that also had an effect. This study found that those who have a variation in the “AKT1” experienced more visual distortions, memory impairment, and paranoid delusions after consuming cannabis.
Many big companies invested in legal marijuana are thinking about risking doing work with Mexico following a Supreme Court decision that made legalization possible for the country that has been experiencing years of intense drug violence. From medical cannabis cultivators to marijuana private equity firms, many cannabis entrepreneurs see Mexico as an excellent new opportunity although marijuana is still illegal, and the market is run by brutal drug cartels.
“Me personally, I’m not afraid to go to Mexico,” Daniel Sparks, head of government affairs at BioTrackTHC, a U.S.-based provider of marijuana supply-chain software, stated.
He added that just like how mafias and bootleggers stopped selling illegal moonshine after Prohibition ended in the United States, Mexico’s cartels will have little to no interest in a legal cannabis market, particularly if it was compiled of reliable pharmaceutical and technological firms.
“I am not so optimistic to think that a cannabis business in Mexico would not encounter opposition or violence from the cartels. However, their profit margins are being eroded daily, monthly and yearly by the continued expansion of medical and recreational marijuana programs in more and more U.S. states.”
Justin Trudeau, Canada’s new prime minister, has agreed to make the plant legal, and a Supreme Court decision during the end of 2015 gave Mexico the opportunity to one day do the same, allowing the ruling party to draft a bill to regulate medical pot.
“It shows North America … is moving in the same direction, and that’s more than just symbolic: it’s indicative of what will happen at a global scale,” Brendan Kennedy, chief executive of pot private equity firm Privateer Holdings, reported. “Mexico is an interesting investment opportunity.”
His firm has found that legal medical and recreational marijuana in Mexico could generate over $1.7 billion in revenue annually.
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