Why Invest in mCig, Inc. (MCIG)?
Dear Potential mCig Investor,
There are certain periods in history when a technology uniquely improves a human activity. This was true for automobiles, which significantly improved the way we commute as well as telecommunications which changed the way humans interact with each other. These moments represent opportunity for businesses that are able to identify them and capitalize.
For hundreds of years, humans have consumed tobacco, marijuana, and other plant materials by inhaling the smoke that is produced from burning them. The French coined the term “Cigarette” in the 1830’s which meant a small cigar. Cigarettes allowed people to easily consume plant materials and grew so popular nearly half the population in the world smoked them.
Economically, tobacco and cigarettes were one of the main components of the US economy with tobacco tax receipts representing up to 35% of all tax receipts in the late 1800’s and early 1900’s. By 1965 over 50% of men and 33% of women were smoking at least 100 cigarettes a year.
In the 1970’s this 200 year trend peaked as modern science was able to prove what had been hypothesized all along: the consumption of burnt plant material carried serious serious health risks leading to cancer and even death. As word spread on the risks of smoking, governments began to take action by better informing their citizens and restricting tobacco companies from marketing their products. This ultimately lead to the passing of laws that required tobacco companies to include health warnings on the labels of their products.
By 2006 about 21% of the population (nearly 1.4 Billion people) smoked at least 100 cigarettes a year representing a decline of nearly 50% in 40 years. While smoking continued to grow in some emerging nations, it became evident that the smoking industry was in permanent decline and this was justifiable as there is no social utility for a product that causes harm and even death.
Technology Revolutionizes Tobacco Consumption
In late 2000 a Chinese pharmacist named Hon Lik came up with an idea to deliver nicotine (the active ingredient in tobacco) by combining a small lithium-ion battery and an atomizer that would vaporize a nicotine liquid. The result was revolutionary as nothing was being burned leading to a clean delivery of nicotine without the negative effects of tar, smoke, or second hand smoke. At first these devices were seen as novelty items from China. However, over the past three years Electronic Cigarettes (eCigs) have been gaining momentum and taking market share converting traditional smokers and leading to a renaissance by non-smokers. Electronic Cigarettes now account for as much as 1% of US Cigarette sales. Reynolds American (NYSE: RAI) a $30 billion traditional tobacco company projects that industry revenue will double to $1 Billion this year and as much as $5 Billion within five years.
Wells Fargo (NYSE: WFC) analyst Bonnie Herzog predicts even faster growth, with sales topping $10 Billion by 2017. Most recently, Citigroup in a 60 page report called Electronic Cigarettes one of the “10 most disruptive innovations in the world” and projected that the industry would grow at 50% a year over the next 5 years. All this has led the traditional tobacco industry to take notice and even enter the space via merger and acquisition. The first of these acquisitions occurred on May 2012 when traditional tobacco company Lorillard (NYSE: LO) bought Blucigs for $135 million.
At mCig, Inc. we believe the eCig trend represents one of the most important technological conversions since humans switched from horses to automobiles or calculators to computers. The opportunity is so exciting due to the sheer volume of people that consume plant material in conventional format which as of 2012 amounts to over 1.2 billion.
The history of marijuana (AKA Cannabis) is quite different from tobacco. Tobacco was accepted by governments even in the face of scientific scrutiny and was only regulated once the evidence was irrefutable. Marijuana on the other hand has been heavily scrutinized, regulated, and classified as an illegal substance even though there has been virtually no scientific evidence of bodily harm. A study by UCSF Professor Dr. Leland Kim shows that tobacco smoking causes nearly 443,000 deaths in the US alone while marijuana causes zero. The history of marijuana is deeply embedded with that of American culture and other leading cultures of the world. US President Thomas Jefferson himself said “Hemp is of first necessity to the wealth & protection of the country.” Unfortunately, since the time of the founding fathers millions of Americans have been arrested and even incarcerated for the possession of marijuana and tens of billions of tax dollars have been expended on regulating and enforcing the criminality of this herb.
The Decriminalization and Legalization of Marijuana
Following the global economic crisis of 2008 a renewed effort was made by the marijuana lobby for both decriminalization of the herb as well as legalization. This push was ultimately successful as the prospect of taxing marijuana like alcohol or tobacco represented an inflection point in the conversation for the merits of legalization. This culminated in marijuana being fully decriminalized and even legalized for adults 21 and up in the states of Colorado (Amendment 64) and Washington (Initiative 502).
Colorado and Washington represent only the start of this trend. On a Federal level, there have been important developments as well. Most recently US Attorney General Eric Holder in a speech to the House of Delegates indicated that he had mandated a review and modification of all Justice Department policies relating to the sentencing of non-violent drug offenders.
The map to the left illustrates how other states are considering decriminalization, legalization or both.These laws went into effect in December 2013 marking the first time in nearly 80 years that Americans were allowed to consume marijuana legally.
As a business opportunity marijuana legalization spawned a mini gold rush creating an entire industry from legal growing operations to secondary and tertiary businesses to support the conversion of this industry from illegal to legal. MMJ Business Daily has done a good job of analyzing the data and projects that the current size of the legal marijuana industry in the US (only Washington and Colorado) is about $1.5 Billion and will grow to $6.0 Billion by 2018.
Keep in mind these are only the revenues for Colorado and Washington, currently the only two states offering full legalization. MMJ projects that the size of the total US market if legalized would be $46 Billion. Globally, this market is even larger with the United Nations (in a report from 2005) stating there are nearly 150 million active marijuana smokers in the world expending over $150 billion a year.
At mCig, Inc. we believe this trend is in its infancy and that over the next decade marijuana will be fully decriminalized in most developed nations. As a business opportunity, we believe that this trend is similar to the one that occurred with alcohol after prohibition and that the ultimate market opportunity will be in excess of $100 billion a year.
mCig – A Technology Company at the Intersection of Two Major Trends
After recognizing the market opportunity we set out to develop a consumer product that would solve a gap in the market right at the intersection of these two trends. Building on past experience in the field of water filtration and vaporization and erring on the side of business caution (refusing to engage in any business that was directly related to illegal narcotics) we designed and engineered in the United States, the mCig – a consumer device loosely modeled after the eCig – but that’s where the similarities end.
Unlike traditional eCig’s the mCig was purpose built for the consumption of a variety of plant materials as opposed to being pre-packaged with plant material or vapor. This allows one to consume the plant material of their choice as not everyone favors nicotine. This also means that the mCig is well positioned to be the leading device for the consumption of both traditional tobacco as well as other herbs including ones that have been recently legalized.
Priced at only $10, the mCig is not only one of the cheapest eCig’s around but also cheaper than any competing product which allows for the heating of loose leaf herbs. As the first mover in the industry, we believe that the mCig will be a game-changing device providing a smoother and more efficient alternative to traditional smoking by leveraging technology.
Through its wholly owned subsidiary VitaCig, the company is harnessing mobile vaporization technology for medical delivery applications. The company launched its first consumer product: The VitaCig, a $3 nicotine-free device that looks and feels like an electronic cigarette (eCig). Unlike a traditional eCig, the VitaCig delivers a water-vapor of natural flavors, vitamins, and phytonutrients. The VitaCig was launched in April 2014 in three flavor categories: Relax, Refresh, Energize with plans for additional flavor categories and targeted medical applications in the future – See more at: http://www.vitacig.org/
mCig, Inc. (Stock Market Symbol: MCIG) is a technology company focused on two long-term secular trends sweeping the globe: (1) The decriminalization and legalization of marijuana for medicinal or recreational purposes (2) The adoption of electronic vaporizing cigarettes (commonly known as “eCigs”) by the world’s 1.2 Billion smokers. The company manufactures and retails the mCig — the world’s most affordable vaporizer priced at only $10. Designed in the USA — the mCig provides a superior smoking experience by heating plant material, waxes, and oils delivering a smoother inhalation experience. The company also owns Vapolution, Inc. which manufactures and retails home-use vaporizers such as the Vapolution 2.0. Through its wholly owned subsidiary, VitaCig, Inc. the company manufactures and retails the VitaCig, a $3 nicotine-free eCig that delivers a water-vapor mixed with vitamins and natural flavors.
The company believes that a well regulated marijuana industry is emerging as more states follow the lead of Washington and Colorado in legalizing marijuana. A similar trend is developing within the eCig industry following the first acquisition of an electronic cigarette brand (Blucigs) by a traditional tobacco company Lorillard Inc. for $135 million followed by another acquisition in February 2014 by Altria Group Inc. of Green Smoke for $150 million. Wells Fargo analyst Bonnie Herzog estimates that eCig sales may rise from $1 Billion in 2013 to $10 billion over the next three years.
mCig, Inc. (Stock Market Symbol: MCIG) has positioned itself as a first mover at the intersection of these two trends and hopes to create shareholder value by making the mCig one of the leading choices for electronic consumption of plant material.
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Any statements contained on this site that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties.
The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, risks and uncertainties relating to the Company’s ability to develop, market and sell products based on its technology; the expected benefits and efficacy of the Company’s products and technology; the availability of substantial additional funding for the Company to continue its operations and to conduct research and development, and future product commercialization; and the Company’s business, research, product development, regulatory approval, marketing and distribution plans and strategies.
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