The medicinal cannabis sector is emerging as investors consider the profit potential in the corporatization of an industry that, since its inception, has relied on secrecy for success. Taking note of shifting attitudes--medicinal marijuana is now legal in 15 states--the southern-California based General Cannabis Inc. (OTCPK: CANA) has become a pioneer in the new business approach toward medicinal cannabis.
A technology-based Internet marketing services company, General Cannabis operates within the ancillary markets of medicinal marijuana. Today, the company reported their financial results for the first quarter ending March 31, 2011.
Total revenue for the quarter was $2.7 million, an increase of 55 percent over revenue of $1.7 million in the first quarter of 2010 and indicative of how both the company and the industry are expanding. The increase in revenue was primarily due to continued strong growth of General Cannabis’s wholly-owned subsidiary, WeedMaps Media, the online community and finder site for cannabis, patients, dispensaries and medical clinics.
Total operating expenses were $2.7 million for the first quarter, as compared to $1.5 million for the first quarter in 2010. The increase was the result of higher salaries and benefits, marketing expenses, occupancy costs, professional fees, and non-cash amortization expense related to the Company's recent acquisitions. The $2.7 million of operating expenses included approximately $0.4 million of amortization expense and $0.4 million of expenses associated with the company's relocation into new office space during the quarter. The new, larger office space was selected to accommodate a growing technology department and promote overall business expansion.
Net income from continuing operations was $4,000 for the first quarter of 2011 versus $239,000, for the first quarter of 2010. Absent the above mentioned amortization expense and office relocation expenses, incurred to encourage continued growth, the net income from continuing operations for the first quarter of 2011 would have been approximately $770,000.
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