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SearchCore Sees Smokin’ Business to Top Growth List

SearchCore Inc.’s business has sprouted dramatically of late.

Its business: online aids for customers and operators of medical-marijuana dispensaries.

SearchCore tops the Business Journal’s annual list of fastest-growing public companies based in Orange County. The Newport Beach-based Internet marketer had revenue growth of 1,657% during two years through June 30.

SearchCore’s revenue went from $841,730 for the 12 months through June 2010 to $14.8 million for 12 months through June of this year.

The company offers its customers software and business services.

SearchCore’s business includes:

• WeedMaps.com, a finder site for medical marijuana dispensaries. SearchCore has said that WeedMaps.com provides more than 10 million page views per month for subscribing dispensaries.

• SafeAccessMD, software designed for use by doctors who prescribe medical marijuana. SafeAccessMD includes electronic medical record and appointment scheduling, among other things, and is compliant with federal regulations intended to protect patients’ healthcare data.

• MMJMenu.com, aimed at the operators of medical marijuana dispensaries. Site features include inventory control and tracking, patient information, patient check-in and online order capability.

“We don’t just track dollars and cents, we track every gram of medicine at your [medical marijuana center],” the company pledges on the MMJMenu website.

SearchCore changed its name from General Cannabis Inc. earlier this year, and company officials said the name change reflected the company’s plans to expand beyond the medical marijuana world.

“The simple fact is that we believe we can expand our … business model into other niche non-cannabis-related industries,” then-President Doug Francis said at the time of the name change.

• Headquarters: Newport Beach

• Business: Online marketing services

• Founded: 2003

• Ticker symbol: SRER (OTC)

• 2011 revenue: $11.9 million

• Recent earnings: $3.3 million for second quarter

• Market value: About $62.5 million

• Notable: Once known as General Cannabis Inc.; offers search function for marijuana dispensaries

SearchCore trades on the over-the-counter stock market and doesn’t have analyst coverage. Its share price has fallen 51% since the beginning of the year with a recent market value of $26 million.

Jim Pakulis, SearchCore’s chief executive, could not be reached for comment for this story.

SearchCore was established in 2003 and went through several name changes before taking on the General Cannabis name in November 2010.

The company grew primarily through buying a series of startups related to medical marijuana after becoming General Cannabis.

It bought WeedMaps Media in 2010. That deal led to the appointment of a pair of executives with Francis becoming SearchCore’s president and Justin Hartfield its chief Web officer.

SearchCore spent $4.2 million in 2011 to buy Marijuana.com, a company that included an Internet bulletin board. SearchCore said Marijuana.com attracted 3.5 million page views per month and some 300,000 users at the time of the deal.

SearchCore filed a registration statement with the Securities and Exchange Commission in early 2011 with the intent of selling about 23.5 million shares of common stock prior to the Marijuana.com deal. The company said in the filing it expected net proceeds of about $9.4 million from the proposed stock sale and intended to use it for acquiring Internet intellectual property, revenue-generating businesses, staff and working capital.

SearchCore laid out some risk factors in its filing, including the fact that marijuana use is still illegal under federal law despite some 15 states allowing the use of the drug for medicinal purposes.

“The federal, and in some cases, state law enforcement authorities have frequently closed down dispensaries and investigated and/or closed physician offices that provide medicinal cannabis recommendations,” SearchCore said in its filing.

S-1

SearchCore withdrew the S-1 filing in August.

“No securities have been sold or issued pursuant to the registration statement, and the registrant does not intend to sell or issue any securities in connection therewith,” Pakulis said in a letter to the SEC.

August also saw the resignation of company president Francis and Hartfield to pursue other interests. SearchCore bought 40 million shares of its common stock back from Francis and Hartfield in connection with their departure.

Hartfield and Francis now are involved with the Prometheus Institute, a think tank that Hartfield co-founded nine years ago. Prometheus produces software called Do-It-Yourself Democracy.

“I will continue to fight for the legalization of marijuana as well as the right for patients to have easy, local access to medical marijuana,” Hartfield said in a release. “While it’s always difficult to leave something you helped create, I’m following my passion of increasing personal liberties through technology.”

Francis said he decided to pursue personal interests in public policy development now that SearchCore is diversifying.

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