10-K 1 mj12311510k.htm FORM 10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ________________

Commission File Number: 333-167824

MJ HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

NEVADA
(State or other jurisdiction of
incorporation or organization)

20-8235905
(I.R.S. Employer
Identification No.)

4141 NE 2nd Avenue, Suite 204-A, Miami, Florida 33137
(Address of principal executive offices)

(305) 455-1881
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨		Accelerated filer ¨		Non-accelerated filer ¨		Smaller reporting company þ
				(Do not check if a smaller reporting company)

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of the voting and non-voting shares of the Company’s Common Stock held by non-affiliates based on the last sale of the Common Stock on June 30, 2015, was $4,116,586.

The number of shares outstanding of the issuer’s Common Stock as of March 25, 2016, was 14,027,939.

MJ HOLDINGS, INC.
TABLE OF CONTENTS

PART I

Item 1.	Business	3
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	16
Item 2.	Properties	17
Item 3.	Legal Proceedings	17
Item 4.	Mine Safety Disclosures	17

PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18
Item 6.	Selected Financial Data	18
Item 7.	Management's Discussion And Analysis of Financial Condition And Results of Operations	18
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk
Item 8.	Financial Statements and Supplementary Data	23
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	23
Item 9A.	Controls and Procedures	23
Item 9B.	Other Information	24

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	25
Item 11.	Executive Compensation	26
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	26
Item 13.	Certain Relationships and Related Transactions, and Director Independence	27
Item 14.	Principal Accountant Fees and Services	28

PART IV

Item 15.	Exhibits and Financial Statement Schedules	29

SIGNATURES		45

In this Annual Report on Form 10-K, unless the context otherwise requires, the terms "MJ Holdings, Inc." "MJ Holdings," "we," "us," "our" and the Company refer to MJ Holdings, Inc., formerly Securitas EDGAR Filings, Inc.

Forward-Looking Statements

In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words "believe," "expect," "will," "anticipate," "intend," "estimate," "project," "assume" or other similar expressions, although not all forward-looking statements contain these identifying words. All statements in this report regarding our future strategy, future operations, projected financial position, estimated future revenue, projected costs, future prospects, and results that might be obtained by pursuing management's current plans and objectives are forward-looking statements. You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Important risks that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this report and in our subsequent filings with the SEC. Our forward-looking statements are based on the information currently available to us and speak only as of the date on which this report was filed with the SEC. We expressly disclaim any obligation to issue any updates or revisions to our forward-looking statements, even if subsequent events cause our expectations to change regarding the matters discussed in those statements. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such difference may be significant and materially adverse to our stockholders.

PART I

Item 1. Business

Company Background

We were originally incorporated on November 17, 2006, as Securitas EDGAR Filings, Inc. under the laws of the State of Nevada. Prior to the formation of Securitas EDGAR Filings Inc., the business was operated as Xpedient EDGAR Filings, LLC, a Florida Limited Liability Company, formed on October 31, 2005. On November 21, 2005, Xpedient EDGAR Filings LLC amended its Articles of Organization to change its name to Securitas EDGAR Filings, LLC. On January, 21 2009, Securitas Edgar Filings LLC merged into Securitas Edgar Filings, Inc., a Nevada corporation. Since our inception and until February 2014, we operated as an EDGAR filing agent, wherein we assisted company's in preparing and filing periodic reports with the United States Securities and Exchange Commission ("SEC") on the EDGAR, (electronic data gathering analysis retrieval) platform. On February 14, 2014, we amended and restated our Articles of Incorporation and changed our name to MJ Holdings, Inc., concurrent with our name change, we changed our business model and began exploring opportunities in the legal marijuana industry, principally in real estate opportunities in connection therewith. Our fiscal year is a calendar year ending December 31.

Our principal executive offices are located at 4141 NE 2nd Avenue Suite 204A, Miami, Florida 33137, and our telephone number is (305) 455-1800 . Our website is located at www.mjholdingsinc.com.

Our Business

MJ Holdings owns and leases real estate zoned for legalized marijuana operations to licensed marijuana operators. In addition to our portfolio of income producing real estate, MJ Holdings owns, operates and is developing a portfolio of business units related to the regulated marijuana industry, including internet websites and mobile apps.

The Company does not and will not, until such time as Federal law allows, grow, harvest, distribute or sell marijuana or any substances that violate the laws of the United States of America.

Our Properties

As of the date of this report, we owned the following properties:

Property	Location	Description
Joliet	5353 Joliet Street Denver, CO 80239	Located in Denver, Colorado, the property is a 22,144 sq ft. warehouse situated on 1.41 acres of land, The properties power has been upgraded to 2,500 amps and is equipped with solar panels. The building is properly zoned to grow marijuana and is leased to a state licensed marijuana operator until 2021 with renewal options.
Havana	503 Havana Street Aurora, CO 80010	Located in Aurora, Colorado, the property is a 1,255 sq. ft. free standing building, situated on 0.54 acres of land. The building is zoned B-2 and has been approved by the city of Aurora for use as a recreational marijuana dispensary. The property is leased to a state licensed marijuana operator until 2024 with renewal options.
Sheridan	1126 S. Sheridan Blvd Denver, CO 80232	Located in Denver, Colorado, the property is a 3,828 sq. ft. free standing building, situated on 0.41 acres of land. The building is properly zoned for use as a recreational marijuana dispensary. The property is leased to a state licensed marijuana operator until 2025 with renewal options.

States where Marijuana is Legal

As of 2015, 23 US States have passed laws permitting state licensed healthcare practitioners to recommend marijuana for medical use and permit its residents the use of marijuana for medical and or therapeutic purposes; of which four states and the District of Columbia permit recreational use and an additional 16 states have laws permitting low tetrahydrocannabinol THC, high cannabidiol (CBD) strains for limited conditions.

Business Strategy

MJ Holdings owns and leases real estate to licensed marijuana operators. Additionally, MJ Holdings plans to explore ancillary opportunities in the regulated marijuana industry.

The Company does not and will not, until such time as Federal law allows, grow, harvest, distribute or sell marijuana or any substances that violate the laws of the United States of America.

We have devised our current business strategy based on certain limitations related to the legal status of marijuana under federal law and the fact that we are a public company and make certain representations and warranties in connection with our public filings with the United States Securities and Exchange Commission. We recognize the significant opportunities in the legalized marijuana space and believe that using our current business model, we can position ourselves to not only develop a significant business along our current path, but be able to leverage our position, relationships and assets to capitalize on additional opportunities in the future, if and when federal law reconciles with state law; resulting in the federal legalization of marijuana.

We Own and Lease Real Estate zoned for legalized marijuana operations.

We own and lease real estate, including retail and industrial space, to licensed marijuana operators. Our opportunity exists, due to the fact that certain landlords have been resistant to lease to marijuana operators due to its status under federal law, and as a result, landlords who are willing to lease to marijuana tenants may be able to lease the property at a premium to current market rents.

Financing Real Estate Transactions

To date, we have financed our real estate acquisitions through the issuance of debt and equity. In the future and as needed, we may employ additional financing and ownership structures and incentives to secure our capital needs.

Competition

We face significant competition from a diverse mix of market participants, including but not limited to, other public companies with similar business models, independent investors, hedge funds and other real estate investors, hard money lenders, as well as would be clients, marijuana operators themselves, all of whom, who may compete against us in our efforts to acquire real estate zoned for marijuana grow and retail operations. In some instances, we will be competing to acquire real estate with persons who have no interest in the marijuana business, but have identified value in a piece of real estate that we may be interested in acquiring. Our greatest competitive threat will likely come from banks, if and when they begin servicing marijuana operators, as the interest rates offered by banks are typically lower than those we can offer.

Availability of Suitable Properties

We believe that the opportunity exists to acquire suitable properties of different sizes to accommodate the varying needs of prospective tenants.

Intellectual Property

We don't own any intellectual property, other than common law rights to our logo and trade dress. We do own various internet domain names which we may develop into internet properties and brands at some point in the future.

Government Regulation

Federal Laws

The U.S. Government classifies marijuana as a schedule-I controlled substance; and as a result, in accordance to Federal law marijuana is an illegal substance. Even in those jurisdictions in which the use of medical marijuana has been legalized at the state level, its prescription is a violation of federal law. The United States Supreme Court has ruled in United States v. Oakland Cannabis Buyers' Coop. and Gonzales v. Raich that it is the federal government that has the right to regulate and criminalize cannabis, even for medical purposes. Therefore, federal law criminalizing the use of marijuana pre-empts state laws that legalizes its use for medicinal purposes. Federal prosecutions of marijuana crimes, where the operators are acting in accordance with state law are rare, this is as a result of U.S. Justice department policies of the current presidential administration, to allow states to implement these laws and not prosecute anyone operating in accordance with applicable state law.

While different presidential administrations may maintain a similar policy position towards marijuana, and while as a growing number of states vote to legalize marijuana for medical and recreational use, which may result in a reconciliation of Federal and state laws legalizing marijuana, it is possible that a future presidential administration could reverse course on the progress made towards marijuana legalization, and seek to enforce federal laws and thereby eliminating the legal marijuana industry.

As of the date of this annual report, the Company derives revenue from state-approved marijuana growers and dispensary facilities. While we do not grow or distribute marijuana; deriving rental income from state-approved marijuana growers and dispensary facilities could be deemed to be aiding and abetting illegal activities, a violation of federal law. We intend to remain within the guidelines outlined in the Cole Memo (see the “Risk Factors”), which does not alter the Department of Justice’s authority to enforce federal law, including federal laws relating to marijuana, but does recommend that U.S. Attorneys prioritize enforcement of federal law away from the marijuana industry operating as permitted under certain state laws, so long as certain conditions are met. Where the individual state framework fails to protect the public, the Justice Department has instructed federal prosecutors to enforce the Controlled Substances Act of 1970. However, we cannot provide assurance that the Company is in full compliance with the Cole Memo or any other federal laws or regulations.

The Company’s ongoing and future business plans rely in part, on our ability to successfully establish and maintain effective controls that follow the United States Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) Guidance, “BSA Expectations Regarding Marijuana-Related Businesses,” in vetting and monitoring potential tenants, customers and clients of the Company. On February 14, 2014, FinCEN issued guidance to clarify Bank Secrecy Act (“BSA”) expectations for financial institutions seeking to provide services to marijuana-related businesses. FinCEN issued this guidance in light of certain state initiatives to legalize certain marijuana-related enforcement priorities. The FinCEN guidance clarifies how financial institutions can provide services to marijuana-related businesses consistent with their BSA obligations, and aligns the information provided by financial institutions in BSA reports with federal and state law enforcement priorities. This FinCEN guidance is intended to enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.

While we are not subject to the BSA or FinCEN guidelines, we expect to implement policies and procedures that mirror the stated goals of the FinCEN guidelines to comply with the federal government’s stated objectives with respect to the potential conflict of law. The Company anticipates using FinCEN Guidelines, as may be amended, as the basis for assessing its relationships with potential tenants.

State Laws

As of 2014, 24 US States have passed laws permitting state licensed healthcare practitioners to recommend marijuana for medical use and permit its residents the use of marijuana for medical and or therapeutic purposes; of which four states and the District of Columbia permit recreational use and an additional 11 states have laws permitting low tetrahydrocannabinol THC, high cannabidiol (CBD) strains for limited conditions.

Local Laws; Zoning

Local laws at the city, county and municipal level add an additional layer of complexity to legalized marijuana. Despite a State's having adopted legislation legalizing marijuana, cities, counties and municipalities, within the state seem to have the ability to otherwise restrict marijuana activities, including but not limited to cultivation, retail or consumption.

The effect of local laws and changes based on legal challenges or policy changes will have a direct effect on the values of property we seek to acquire, as more properties are zoned for marijuana operations and or as cities with large populations that may have previously restricted marijuana, ease those restrictions, properties within those cities may become more attractive and real estate prices in neighboring communities, outside those populist hubs, may decline and the corresponding rents they draw. In the event that we have long term leases in place and our tenants remain in good standing, this should not affect our short term cash-flows.

Zoning sets forth the approved use of land in any given city, county or municipality. Zoning is set by local governments and may otherwise be restricted by state laws; for example, under certain state laws a seller of liquor may not be allowed to operate within 1,000 feet of a school. There are and or will be similar restrictions imposed on marijuana operators, which will restrict how and where marijuana operations can be located and the manner and size of which they can grow and operate. Additionally, zoning is subject to change, properties can be re-zoned and a given zoning may be withdrawn. How properties are zoned will have a direct impact on our business operations, additionally we expect to require the assistance of local counsel, as needed to ensure that properties we may acquire are properly zoned. We intend to seek to purchase property that has the appropriate zoning in place for our tenants operations.

Employees

As of December 31, 2015, we had no employees.

Item 1A. Risk Factors

Various portions of this report contain forward-looking statements that involve risks and uncertainties. Actual results, performance or achievements could differ materially from those anticipated in these forward-looking statements as a result of certain risk factors, including those set forth below and elsewhere in this report. These risk factors are not presented in the order of importance or probability of occurrence.

Risks Related to Our Business

We Have a limited Operating History Within this Industry, and we may not Succeed.

We have a limited operating history or experience in procuring, building out or leasing real estate for agricultural purposes, specifically marijuana grow facilities and as such, within this industry we may not succeed. Moreover, We are subject to all risks inherent in a developing a new business enterprise. Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with establishing a new business and the competitive and regulatory environment in which we operate. For example, the medical marijuana industry is a new industry that as a whole may not succeed, particularly should the Federal government change course and decide to prosecute those dealing in medical marijuana under Federal law. If that happens there may not be an adequate market for our properties.

You should further consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages. For example, unanticipated expenses, delays and or complications with build outs, zoning issues, legal disputes with neighbors, local governments, communities and or tenants. We may not successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business to the point of having to cease operations and could impair the value of our common stock to the point investors may lose their entire investment.

We may be unable to identify and or successfully acquire properties which are suitable for our business, we will rely on local real estate professionals and our own due diligence to ensure we are acquiring the right properties and at the right price; zoning; market for properties.

Our business plan involves the identification and the successful acquisition of properties which are zoned for marijuana businesses, including grow and retail, the properties we acquire, will be leased to licensed marijuana operators. There can be no assurance that we will be able to identify and or obtain the capital needed to purchase any properties. Additionally, local governments must approve and adopt zoning ordinances for marijuana grow facilities and retail dispensaries. A lack of properly zoned real estate may reduce our prospects and limit our opportunity for growth and or increase the cost at which suitable properties are available to us, conversely a surplus of real estate zoned for marijuana establishments may reduce demand and prices we are able to charge for properties we may have previously acquired.

Going concern report of independent certified public accountants.

Our limited history of operations, our operating losses, and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern. In this regard, see the Report of Independent Certified Public Accountants accompanying our audited financial statements appearing elsewhere herein which cites substantial doubt about our ability to continue as a going concern. There can be no assurance that we will achieve profitability or generate positive cash flow in the future. As a result of these and other factors, there can be no assurance that our proposed activities will be successful or that the Company will be able to achieve or maintain profitable operations. If we fail to achieve profitability, our growth strategies could be materially and adversely affected.

Additional capital will be required to finance and expand our operations in the future, but that capital may not be available when it is needed and could be dilutive to existing stockholders.

We will require additional capital for future operations including acquiring properties, which we intend to build out and lease to tenants. We plan to finance our property acquisitions and accompanying build-outs through the issuance of secured convertible notes, we anticipate we will be able to meet ongoing expenses and capital requirements with funds generated from the following sources:

cash provided by operating activities;
capital raised through debt and equity offerings.

We intend to raise capital through the issuance of equity and debt to acquire real estate zoned for marijuana grow and retail sale (dispensary). Debt issued may be securitized by the real estate and any fixtures and improvements to the real estate. Revenue generated by the real estate, less a management fee and any spread between the cost of the loan and the proceeds from our leases, will be used to service the debt, beyond which we expect the debt to be non-recourse against the Company. Debt holders may have the opportunity to convert their note to the Company's Common Stock, depending on the terms of the conversion, conversion of debt may dilute the holdings of our existing stockholders, reduce the market price of our common stock, or both.

Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions and a number of other factors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our liquidity, financial condition, results of operations and prospects. Further, if we raise capital by issuing stock, the holdings of our existing stockholders will be diluted.

If we raise capital by issuing debt securities, such debt securities would rank senior to our common stock upon our bankruptcy or liquidation. In addition, we may raise capital by issuing equity securities that may be senior to our common stock for the purposes of dividend and liquidating distributions, which may adversely affect the market price of our common stock. Finally, upon bankruptcy or liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive a

distribution of our available assets prior to the holders of our common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both.

Our failure to obtain the capital, which we require to execute our business plan, will result in the slower implementation of our business plan, lost opportunities to other market participants, each of which could have a detrimental impact on our business, operations and financial condition.

We will need to refinance promissory notes we issue as they mature.

Our success is dependent on our ability to refinance the promissory notes we issue to acquire real estate as those notes mature. We expect that promissory notes will have a maturity between three to five years and upon maturity we will be required to refinance the properties to repay the principal borrowed under the notes. If we are unable to procure replacement financing, either from banks or private investors, we may need to sell those properties, which in turn may have an adverse affect on our cash flow from operations; furthermore, if we sell those properties and those properties have depreciated in value, we will not profit from the appreciation of our equity interest in the properties and any and all of the proceeds from the sale will be used to repay the principal borrowed under the note.

Our business is dependent upon continued market acceptance by consumers.

We are substantially dependent on continued market acceptance and proliferation of consumers of medical marijuana. We believe that as marijuana becomes more accepted, the stigma associated with marijuana use will diminish and, as a result, consumer demand will continue to grow. And while we believe that the market and opportunity in the marijuana space continues to grow, we cannot predict the future growth rate and size of the market.

The alternative medicine industry faces strong opposition.

We believe that the pharmaceutical industry may be an opponent of medical marijuana. If medical marijuana is a commercial success, it may adversely affect the market for Marinol, the current "marijuana pill" which is sold by large and established pharmaceutical companies. To protect its interests, Big Pharma may in turn focus its considerable resources in lobbying efforts to curtail medical marijuana. If the pharmaceutical companies were successful in their attack on medical marijuana, we would likely see a reduction in demand for grow and dispensary space, and the industry in general may suffer which could have a detrimental impact on our business, operations and financial condition.

We plan to pursue additional opportunities in the legal marijuana space. The success of these endeavors is uncertain.

We expect to commit resources and capital to explore and develop new opportunities within the marijuana space. We hope to position ourselves as a diversified marijuana holding and operating company in anticipation of a reconciliation of federal law with state law, which we believe will come as more states legalize marijuana. We cannot assure you that we will be successful in our efforts in establishing operations or that our ownership of certain marijuana businesses or investments will be permitted as a matter of law, or that we will achieve market acceptance for our ventures and or associated products and services, or other new products and services that we may offer in the future. Moreover, these and other new products and services may be subject to significant competition with offerings by new and existing competitors in the business of dispensing regulated pharmaceutical products. In addition, new products, services and enhancements may pose a variety of technical challenges and require us to attract additional qualified employees. The failure to successfully develop and market these new products, services or enhancements could seriously harm our business, financial condition and results of operations.

Potential competitors could duplicate our business model, and others are engaged in similar of not exact businesses.

There is no aspect of our business which is protected by patents, copyrights, trademarks, or trade names. As a result, potential competitors could duplicate our business model with little effort.

We depend upon key personnel, the loss of which could seriously harm our business.

Our operating performance is substantially dependent on the continued services of our executive officers, Mr. Shawn Chemtov, our Co- Chief Executive Officer and co-chairman of our Board of Directors and Adam Laufer, our Co- Chief Executive Officer and co-

chairman of our Board of Directors. We believe Messrs. Chemtov and Laufer possess valuable knowledge about and experience in real estate and securities law and capital markets respectively, and that their knowledge and relationships would be difficult to replicate. We have not entered into an employment agreement with either Messrs. Chemtov or Laufer and, although we are considering doing so, have not acquired key-person life insurance on either such executive officer. The unexpected loss of the services of Messrs. Chemtov or Laufer could have a material adverse effect on our business, operations, financial condition and operating results, as well as the value of our common stock.

Risks Related to Government Regulation

Marijuana is illegal under federal law.

The U.S. Government classifies marijuana as a schedule-I controlled substance; and as a result in accordance to Federal law marijuana is an illegal substance. Even in those jurisdictions in which the use of medical marijuana has been legalized at the state level, its prescription is a violation of federal law. The United States Supreme Court has ruled in United States v. Oakland Cannabis Buyers' Coop. and Gonzales v. Raich that it is the federal government that has the right to regulate and criminalize cannabis, even for medical purposes. Therefore, federal law criminalizing the use of marijuana pre-empts state laws that legalizes its use for medicinal purposes.

As of March 3, 2016, 23 states and the District of Columbia allow its citizens to use medical marijuana. Additionally, voters in the states of Colorado and Washington approved ballot measures last November to legalize cannabis for adult use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. However, there is no guarantee that the administration will not change its stated policy regarding the low-priority enforcement of federal laws.

Additionally, any new administration that follows could change this policy and decide to enforce the federal laws strongly. Any such change in the federal government's enforcement of current federal laws could cause significant financial damage to us and its shareholders.

Should such a change occur, our business operations would be affected to some degree. If our marijuana tenants are forced to shutter their operations, we would need to seek to replace those tenants with non marijuana tenants, who would likely expect to pay lower rents, moreover if the marijuana industry were forced to shutter at once, it would result in a high amount of vacancies at once and create a glut of supply, driving leases and property values lower. Additionally, we'd almost certainly realize an economic loss on any and all improvements made to the properties that were specific to the marijuana industry and we would likely lose any and all investments in the US market that were marijuana related.

Further, and while we do not intend to harvest, distribute or sell cannabis, by leasing facilities to growers of marijuana, we could be deemed to be participating in marijuana cultivation, which remains illegal under federal law, and exposes us to potential criminal liability, with the additional risk that our properties could be subject to civil forfeiture proceedings.

Laws and regulations affecting the regulated marijuana industry are constantly changing, which could detrimentally affect our proposed operations, and we cannot predict the impact that future regulations may have on us.

Local, state and federal medical marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on its operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to our proposed business. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.

Our proposed business is dependent on state laws pertaining to the marijuana industry.

Continued development of the marijuana industry is dependent upon continued legislative authorization of marijuana at the state level. Any number of factors could slow or halt progress in this area. Further, progress, while encouraging, is not assured. While there may be ample public support for legislative action, numerous factors impact the legislative process. Any one of these factors could slow or halt use of marijuana, which would negatively impact our proposed business.

As of March 3, 2016, 23 states and the District of Columbia allow their residents to use medical marijuana. Voters in the states of Colorado and Washington approved and implemented regulations to legalize cannabis for adult use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration has made numerous statements (as memorialized in the "Cole Memo") indicating that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. However, there is no guarantee that the administration will not change its stated policy regarding the low-priority enforcement of federal laws. Additionally, any new administration that follows could change this policy and decide to stringently enforce the federal laws. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to the Company and its stockholders.

The Company derives revenue from state-approved marijuana growers and dispensary facilities.

While we do not grow or distribute marijuana we derive rental income from state-approved marijuana growers and dispensary facilities which could be deemed to be aiding and abetting illegal activities, a violation of federal law. If the Federal government sought to enforce marijuana laws in states that have legalized, the same, we could be prosecuted under federal law, which could result in fines, penalties, potential forfeitures and a cessation of our current business activities.

FDA regulation of marijuana under the Food, Drug and Cosmetic Act, GMPs and possible registration of facilities where medical marijuana is grown.

Should the Federal government legalize marijuana for medical use, it is possible that the U.S. Food and Drug Administration would seek to regulate it under the Food, Drug and Cosmetics Act of 1938. Additionally, the FDA may issue rules and regulations including CGMPs (certified good manufacturing practices) related to the growth, cultivation, harvesting and processing of medical marijuana. Clinical trials may be needed to verify efficacy and safety. It is also possible that the FDA would require that facilities where medical marijuana is grown be registered with the FDA and comply with certain federally prescribed regulations. In the event that some or all of these regulations are imposed, we do not know what the impact would be on the medical marijuana industry, what costs, requirements and possible prohibitions may be enforced. If we or our tenants are unable to comply with the regulations and or registration as prescribed by the FDA, we and or our tenants may be unable to continue to operate their and our business in its current form or at all.

Our clients may have difficulty accessing the service of banks, which may make it difficult for them to contract with us for their real estate needs.

On February 14, 2014, The U.S. government issued rules allowing banks to legally provide financial services to state-licensed marijuana businesses. A memorandum issued by the Justice Department to federal prosecutors re-iterated guidance previously given, this time to the financial industry that banks can do business with legal marijuana businesses and "may not" be prosecuted. The Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued guidelines to banks that "it is possible to provide financial services" to state-licensed marijuana businesses and still be in compliance with federal anti-money laundering laws. The guidance falls short of the explicit legal authorization that banking industry officials had pushed the government to provide and to date it is not clear what if any banks have relied on the guidance and taken on legal marijuana companies as clients. The aforementioned policy may be administration dependent and a change in presidential administrations may cause a policy reversal and a retraction of current policies, wherein legal marijuana businesses may not have access to the banking industry. The inability of potential clients in our target market to open accounts and otherwise use the service of banks may make it difficult for them to contract with us.

Risks Related to Real Estate

We will be subject to general real estate risks.

We will be subject to risks generally incident to the ownership of real estate, including: (a) changes in general economic or local conditions; (b) changes in supply of, or demand for, similar or competing properties in the area; (c) bankruptcies, financial difficulties or defaults by tenants or other parties; (d) increases in operating costs, such as taxes and insurance; (e) the inability to achieve full stabilized occupancy at rental rates adequate to produce targeted returns; (f) periods of high interest rates and tight money supply; (g) excess supply of rental properties in the market area; (h) liability for uninsured losses resulting from natural disasters or other perils; (i) liability for environmental hazards; and (j) changes in tax, real estate, environmental, zoning or other laws or regulations. For these and other reasons, no assurance can be given that we will be profitable.

The economic success of an investment in the Company depends directly upon the results of operations of our properties.

Fluctuations in vacancy rates, rent schedules and operating expenses can adversely affect operating results or render the sale or refinancing of the properties difficult or unattractive. We cannot assure that certain assumptions as to the future levels of occupancy of our properties, cost of repositioning our properties in the marketplace or future costs of operating our properties will be accurate since many of such matters will depend on events and factors beyond our control. Such factors include, without limitation: continued validity and enforceability of the leases; vacancy rates for properties similar to our properties; financial resources of tenants and rent levels near our properties; adverse changes in local population trends, market conditions, neighborhood values, local economic and social conditions; supply and demand for property such as our properties; competition from similar properties; interest rates; real estate tax rates, governmental rules, regulations and fiscal policies; the enactment of unfavorable real estate, rent control, environmental or zoning laws and hazardous material laws; and uninsured losses and effects of inflation.

Our business model depends upon the availability of private financing.

Our ability to acquire, operate and sell properties and achieve the targeted financial performance for such properties depends, in large measure, on its ability to obtain financing in amounts and on terms that are favorable and in some instances, allow for significant leverage at reasonable interest rates. The capital markets in the United States have recently undergone a turbulent period in which lending was severely restricted. Although there appears to be signs that financial institutions are resuming lending, the market has not yet returned to its pre-2008 state; obtaining favorable financing in the current environment remains challenging. If this market does not improve over the next few years, or if it worsens, our financial performance could be adversely affected.

A general economic downturn could adversely affect the economic performance of the properties we own.

Weakness in regional and national economies could materially and adversely impact the tenants in our properties and their business operations. If tenants were to suffer a serious economic setback, they might not be able to pay rent due under their leases. If a number of tenants are unable to pay the rent, we may not receive the anticipated amount of income from our properties or may not be able to pay the debt service to the lenders. In a worst case scenario, this could result in a complete loss of those properties if the lenders were to foreclose. Further, a general or local weakness in economic conditions may reduce the demand for buyers of those properties. There is no assurance that any general appreciation in real estate values or our properties (and currently relatively low capitalization rates) will continue.

We will compete with others for suitable properties.

We will experience competition for real estate investments from individuals, corporations and other entities engaged in real estate investment activities, many of whom have greater financial resources than us. Competition for investments may have the effect of increasing costs and reducing returns to our investors.

Loans that we obtain may prohibit prepayment or require additional payments.

Property loans obtained may prohibit prepayment prior to maturity or some earlier date. If we sought to voluntarily prepay a loan, it may be required to make a defeasance payment to the lender. The defeasance payment is intended to provide the lender with a sum of money that would earn an amount comparable to the interest payments due on the loan through maturity. If interest rates declined prior to defeasance, the defeasance payment generally would be higher; if interest rates increased, the defeasance payment generally would be lower. The inability to prepay loans for a number of years and the defeasance payments described above may adversely impact our ability to sell certain of our properties as contemplated, although a qualified buyer approved by a lender may be able to assume a loan.

There may be restrictions on transfer and encumbrance of our properties.

The terms of any loan are expected to prohibit the transfer or further encumber the properties or any interest in our properties except with a lender's prior consent, which consent each lender is expected to be able to withhold. When borrowing arrangements are entered into by the company, the resulting loans may include provisions that restrict our activities in the management of the the properties. The loans may provide that upon violation of these restrictions on transfer or encumbrance, a lender may declare the entire amount of the loan to be immediately due and payable. If we are unable to obtain replacement financing or otherwise fails to immediately repay

the loan in full, the lender may invoke its remedies under the loan, including proceeding with a foreclosure sale that could result in our losing our entire interest in the property.

Indebtedness and high leverage could adversely affect our profits.

Our properties may be leveraged. Such leverage could have negative consequences, including the following: (a) our ability to obtain additional financing for working capital, capital expenditures, or other purposes may be impaired in the future; (b) certain borrowings may be at variable rates of interest, which will expose the company to the risk of increased interest rates; and (c) leverage may limit our flexibility to adjust to changing economic or market conditions, reduce our ability to withstand competitive pressures, make us more vulnerable to a downturn in general or local economic conditions and substantially increase our risk of loss.

If debt payments to note holder are not made, we could lose our investment in our real estate properties.

Loans obtained from investors to fund the acquisition of real estate properties will in most cases be secured by a first mortgage on the properties. If debt service payments are not made as required, a lender could foreclose on the property securing its debt. This could cause the Company to lose part or all of its investment, which in turn would adversely affect our financial performance.

Lenders may require restrictive covenants.

The loan instruments may contain financial and other restrictive covenants that will limit the company's ability to, among other things, borrow additional funds.

Financial arrangements may involve balloon payment obligations.

It is anticipated that many of the financing arrangements will require a lump-sum or “balloon” payment at maturity. The ability to make a balloon payment at maturity is uncertain and may depend upon the borrower's ability to obtain additional financing. At the time the balloon payment is due, the borrower may or may not be able to refinance the existing loan on favorable terms. The effect of an unfavorable refinancing or a forced sale could adversely affect the company's financial performance.

High interest rates may make it difficult to finance or refinance properties.

If debt is unavailable at reasonable rates, we may not be able to finance acquisition of real estate properties, refinance debt when the loan comes due, or refinance such debt on favorable terms. If interest rates are higher upon refinancing debt, income or gain would be reduced. We may be unable to refinance such debt at appropriate times, which could result in the foreclosure of our properties. If any of these events occur, cash flow would be reduced. This, in turn, would materially impair the results of operations of the company.

Property purchase agreements may not provide adequate protection.

Properties may be sold to us in an “as is” condition. Further, representations and warranties in a property purchase agreement typically do not survive the closing. Accordingly, we will engage third parties to conduct the required due diligence involving engineering, radon, environmental, title and other inspections during the applicable due diligence investigation period. However, upon acquisition of properties, we will have limited recourse with respect to conditions affecting the property that were not discovered during this investigation period. The cost of unexpected repairs and remediation work could be material and would therefore have an adverse effect on the Company’s financial condition and results of operations. If claims arising as a result of a breach of a representation or warranty are discovered after this period, we may not be able to seek indemnification from the seller and would therefore suffer the financial consequences of such a breach, which could be material. Further, even if we were entitled to indemnification from the seller, no assurance can be given that the seller would have sufficient funds to satisfy any such indemnification claims.

Non-refundable deposits and costs may be incurred if acquisitions fail to close.

Property acquisition transactions may require deposits and costs to be incurred by the company which may be non-refundable if such transactions fail to close, thereby reducing funds otherwise available to us.

Environmental liabilities are possible and can be costly.

Federal, state and local laws impose liability on a landowner for releases or the otherwise improper presence on the premises of hazardous substances. This liability is without regard to fault for, or knowledge of, the presence of such substances. A landowner may be held liable for hazardous materials brought onto a property before it acquired title and for hazardous materials that are not discovered until after it sells the property. Similar liability may occur under applicable state law. Sellers of properties may make only limited representations as to the absence of hazardous substances. If any hazardous materials are found within our properties in violation of law at any time, we may be liable for all cleanup costs, fines, penalties and other costs. This potential liability will continue after we sell the property(ies) and may apply to hazardous materials present within the property(ies) before the we acquire the property(ies). If losses arise from hazardous substance contamination which cannot be recovered from a responsible party, the financial viability of the property(ies) may be adversely affected. It is expected that each lender will require us to obtain, and we plan to obtain before any purchase, a Phase I environmental site assessment (“ESA”) to determine the existence of hazardous materials and other environmental problems prior to entering into a loan. However, a Phase I ESA generally does not involve invasive testing, but instead is limited to a physical walk through or inspection of the property(ies) and a review of governmental records. It is possible that we will purchase property(ies) with known or unknown environmental problems which may require material expenditures for remediation.

Uninsured losses may be experienced by the Company.

While we intend to carry comprehensive insurance on our properties, including fire, liability and extended coverage insurance, there are certain risks that may be uninsurable or not insurable on terms that management believes to be economical. For example, management may not obtain insurance against floods, terrorism, mold-related claims, or earthquake insurance. If such an event occurs to, or causes the damage or destruction of, a property, we could suffer financial losses.

Non-compliance with the Americans with Disabilities Act may create liabilities.

If any of our properties are not in compliance with the Americans with Disabilities Act of 1990, as amended (the “ADA”), we may be required to pay for any required improvements. Under the ADA, public accommodations must meet certain federal requirements related to access and use by disabled persons. The ADA requirements could require significant expenditures and could result in the imposition of fines or an award of damages to private litigants. We cannot assure that ADA violations do not or will not exist at any of our properties.

Risks Related to Our Stock

Our common stock is currently deemed a "penny stock," which makes it more difficult for our investors to sell their shares.

Our common stock is subject to the "penny stock" rules adopted under Section 15(g) of the Exchange Act. The penny stock rules generally apply to companies whose common stock is not listed on the Nasdaq Stock Market or other national securities exchange and trades at less than $4.00 per share, other than companies that have had average revenue of at least $6,000,000 for the last three years or that have tangible net worth (i.e., total assets less intangible assets and liabilities) of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than "established customers" complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our common stock. If our common stock is subject to the penny stock rules, investors will find it more difficult to dispose of our common stock.

Volatility in our common stock price may subject us to securities litigation.

The market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities to us and could divert our management's attention and resources from managing our operations and business.

Our management controls a large block of our common stock that will allow them to control us.

As of March 25, 2016, members of our management team beneficially own approximately 85% of our outstanding common stock. As such, management owns approximately 85% of our voting power and controls the Company. As a result, management has the ability to control substantially all matters submitted to our stockholders for approval including:

election of our board of directors;
removal of any of our directors;
amendment of our articles of incorporation or bylaws; and
adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.

In addition, management's stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

Our board of directors can issue additional shares of common and preferred stock which will dilute existing shareholders.

We can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which would result in dilution of existing stockholders' interests in MJ Holdings and could depress our stock price.

Our articles of incorporation authorize 95,000,000 shares of common stock, of which 14,027,939 are outstanding as of March 25, 2016, and 5,000,000 shares of preferred stock, of which none are outstanding. Our Board of Directors is authorized to issue additional shares of our common stock and preferred stock. Although our Board of Directors intend to utilize its reasonable business judgment to fulfill its fiduciary obligations to our stockholders in connection with any future issuance of our capital stock, the future issuance of additional shares of our common stock or preferred stock convertible into common stock would cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a material effect on the market value of the shares.

We have never paid dividends on our Common Stock and We do not expect to pay any cash dividends in the foreseeable future.

We have never paid dividends on our Common Stock and we intend to retain our future earnings, if any, in order to reinvest in the development and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and such other factors as our board of directors deems relevant. Accordingly, investors may need to sell their shares of our common stock to realize a return on their investment, and they may not be able to sell such shares at or above the price paid for them.

Our board could issue "blank check" preferred stock without stockholder approval with the effect of diluting existing stockholders and impairing their voting rights, and provisions in our charter documents could discourage a takeover that stockholders may consider favorable.

Our certificate of incorporation authorize the issuance of up to 5,000,000 shares of "blank check" preferred stock with designations, rights and preferences as may be determined from time to time by our board of directors. Our board is empowered, without stockholder approval, to issue a series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a change in control. For example, it would be possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to effect a change in control of our company.

Our bylaws also allow our board of directors to fix the number of directors. Our stockholders do not have cumulative voting in the election of directors.

Any aspect of the foregoing, alone or together, could delay or prevent unsolicited takeovers and changes in control or changes in our management.

There is no established market four our stock and our common stock is not listed on a stock exchange; as a result, stockholders may not be able to resell their shares at or above the price paid for them.

There is not established market for our common stock. Our common stock trades on the OTC market under ticker symbol MJNE; stocks which trade on the OTC markets tend to be illiquid and volatile and could be subject to significant fluctuations due to changes in sentiment in the market regarding our operations or business prospects, among other factors. Further, our common stock is not listed on a stock exchange, nor do we currently intend to list the common stock on a stock exchange. There are no assurances that an active public market for our common stock will develop. Therefore, stockholders may not be able to sell their shares at or above the price they paid for them.

Among the factors that could affect our stock price are:

industry trends and the business success of our vendors;
actual or anticipated fluctuations in our quarterly financial and operating results and operating results that vary from the expectations of our management or of securities analysts and investors;
our failure to meet the expectations of the investment community and changes in investment community recommendations or estimates of our future operating results;
announcements of strategic developments, acquisitions, dispositions, financings, product developments and other materials events by us or our competitors;
regulatory and legislative developments;
litigation;
general market conditions;
other domestic and international macroeconomic factors unrelated to our performance; and
additions or departures of key personnel.

Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of our common stock.

A substantial portion of our total outstanding shares of common stock may be sold into the market at any time. While most of these shares are held by two of our principal stockholders, who are also executive officers, and we believe that such holders have no current intention to sell a significant number of shares of our stock, if either of these principal stockholders were to decide to sell large amounts of stock over a short period of time such sales could cause the market price of our common stock to drop significantly, even if our business is doing well.

Further, the market price of our common stock could decline as a result of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate. We currently have 14,027,939 shares of common stock outstanding, 1,784,000 of which are freely tradable without restriction under the Securities Act.

Having no independent directors on our board limits our ability to establish effective independent corporate governance procedures.

We do not have any independent directors on our board of directors nor do we maintain a standing audit committee, compensation committee or nominating and governance committee. Accordingly, without independent directors, we cannot establish effective standing board committees to oversee functions such as audit, compensation and corporate governance. In addition, our executive officers are also directors, Shawn Chemtov, and Adam Laufer are co-chairmen of our board of directors and our co-CEOs respectively. This structure gives our executive officers significant control over all corporate issues.

Unless and until we have a larger board of directors that would include a majority of independent members, there will be limited oversight of our executive officers' decisions and activities and little ability for you to challenge or reverse those activities and decisions, even if they are not in your best interests.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results. As a result, we could become subject to sanctions or investigations by regulatory authorities and/or stockholder litigation, which could harm our business and have an adverse effect on our stock price.

As a public reporting company, we are required to comply with the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC, including periodic reports, disclosures and more complex accounting rules. As directed by Section 404 of Sarbanes-Oxley,

the SEC adopted rules requiring public companies to include a report of management on a company's internal control over financial reporting in their Annual Report on Form 10-K. Based on current rules, we are required to report under Section 404(a) of Sarbanes-Oxley regarding the effectiveness of our internal control over financial reporting.

Requirements associated with being a reporting public company will require significant company resources and management attention.

We are a voluntary filer under the Securities Exchange Act of 1934, as a result of having filed a Registration Statement on Form S-1 on June 28, 2010, which was declared effective on April 18, 2011, pursuant to section15(d) of the Securities Exchange Act of 1934. As a voluntary filer we intend to continue to file periodic reports to maintain current information with the SEC on Forms 10-Q, 10-K and 8-K as prescribed by the rules and Regulations of the Securities Exchange Act of 1934. We work with independent legal, accounting and financial advisors to ensure adequate disclosure and control systems to manage our growth and our obligations as a company that files reports with the SEC. These areas include corporate governance, internal control, internal audit, disclosure controls and procedures and financial reporting and accounting systems. However, we cannot assure you that these and other measures we may take will be sufficient to allow us to satisfy our obligations as an SEC reporting company on a timely basis.

In addition, compliance with reporting and other requirements applicable to SEC reporting companies will create additional costs for us, will require the time and attention of management and will require the hiring of additional personnel and legal, audit and other professionals. We cannot predict or estimate the amount of the additional costs we may incur, the timing of such costs or the impact that our management's attention to these matters will have on our business.

Our officers and directors have limited liability, and we are required in certain instances to indemnify our officers and directors for breaches of their fiduciary duties.

We have adopted provisions in our Articles of Incorporation and Bylaws, which limit the liability of our officers and directors and provide for indemnification by us of our officers and directors to the full extent permitted by Nevada corporate law. Our articles generally provide that our officers and directors shall have no personal liability to us or our shareholders for monetary damages for breaches of their fiduciary duties as directors, except for breaches of their duties of loyalty, acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, acts involving unlawful payment of dividends or unlawful stock purchases or redemptions, or any transaction from which a director derives an improper personal benefit. Such provisions substantially limit our shareholders' ability to hold officers and directors liable for breaches of fiduciary duty, and may require us to indemnify our officers and directors.

Any future litigation could have a material adverse impact on our results of operations, financial condition and liquidity, particularly since we do not currently have director and officer insurance. Our lack of D&O insurance may also make it difficult for us to retain and attract talented and skilled directors and officers.

From time to time we may be subject to litigation, including potential stockholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. To date we have not procured directors and officers liability ("D&O") insurance to cover such risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines, and expenses including attorneys' fees) of officers and directors who are the subject of a lawsuit as a result of their service to the Company. While we are currently seeking such insurance, there can be no assurance that we will be able to do so at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. While neither Nevada law nor our articles of incorporation or bylaws require us to indemnify or advance expenses to our officers and directors involved in such a legal action, we expect that we would do so to the extent permitted by Nevada law. Without D&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to the Company could have a material adverse effect on our financial condition, results of operations and liquidity. Further, our lack of D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers, which could adversely affect our business.

Item 1B. Unresolved Staff Comments

None

Item 2. Properties

The following table provides certain summary information about our real estate properties as of December 31, 2015:

Property

Year Built / (Renovated)

Zoning

Date of

Purchase

Building
Square

Feet

Land

Area

Lease
Expiration

Date

Monthly Rental

Income as of

December 31,
2015 ⁽¹⁾

5353 Joliet Street

Denver, Colorado

1980 /

(2014)

Industrial

6/19/2014

22,144

1.41 acres

8/31/2021

30,233

503 Havana Street

Aurora, Colorado

1967 /

(2007)

Retail

9/24/2014

1,255

0.54 acres

9/30/2024

13,914

1126 S. Sheridan Blvd

Denver, Colorado

1973 /

(2015)

Retail

5/4/2015

3,828

0.41 acres

4/30/2025

12,359

(1)

Monthly rental income is straight-line rental income over the lease term, including the reimbursement of certain operating expenses, in effect as of December 31, 2015

We currently are using office space, provided to us by our co-CEO Shawn Chemtov, at no cost.

Item 3. Legal Proceedings

There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.

Item 4. Mine Safety Disclosures

Not applicable

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our shares of common stock are currently quoted on the OTC Bulletin Board under the symbol MJNE. The following table sets forth the high and low closing bid prices of our common stock for the quarterly periods for the years ended December 31, 2015 and 2014. These bid prices represent prices quoted by broker-dealers on the OTC Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions.

	Fiscal 2015		Fiscal 2014
	High	Low	High	Low
First Quarter	3.00	0.88	26.24	5.00
Second Quarter	2.00	0.55	12.00	2.00
Third Quarter	2.00	0.50	8.83	1.90
Fourth Quarter	2.00	0.50	3.99	1.32

Holders

As of March 25, 2016, there were 24 shareholders of record. However, we believe that there are more beneficial holders of our common stock as beneficial holders may hold their stock in "street" name.

Dividends

We did not pay any cash dividends on our common stock during 2015 or 2014 and have no intention of doing so in the foreseeable future. We intend to retain any earnings for use in our operations and the expansion of our business. Any future determination to declare and pay cash dividends will be made at the discretion of our board of directors, subject to applicable laws and will depend on our financial condition, results of operations, liquidity, capital requirements, general business conditions, any contractual restriction on the payment of dividends and other factors that our board of directors may deem relevant.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

Item 6. Selected Financial Data

Smaller reporting companies are not required to provide the information required by this item.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following management's discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes thereto included elsewhere in this report.

Executive Overview and Plan of Operation

On February 14, 2014, we amended and restated our Articles of Incorporation and changed our name to MJ Holdings, Inc., concurrent with our name change, we changed our business model and began exploring opportunities in the legal marijuana industry, principally in real estate opportunities in connection therewith. Our fiscal year is a calendar year ending December 31.

Our principal executive offices are located at 4141 NE 2nd Avenue Suite 204A, Miami, Florida 33137, and our telephone number is (305) 455-1800.

How We Plan to Generate Revenue

As of December 31, 2015, we have acquired three real estate properties in Colorado that are leased to state licensed marijuana operators and generating $56,506 in monthly rental income. The following table provides certain summary information about our real estate properties:

Property

Year Built / (Renovated)

Zoning

Date of

Purchase

Building
Square

Feet

Land

Area

Lease
Expiration

Date

Monthly

Rental

Income⁽¹⁾

5353 Joliet Street

Denver, Colorado

1980 /

(2014)

Industrial

6/19/2014

22,144

1.41 acres

8/31/2021

30,233

503 Havana Street

Aurora, Colorado

1967 /

(2007)

Retail

9/24/2014

1,255

0.54 acres

9/30/2024

13,914

1126 S. Sheridan Blvd

Denver, Colorado

1973 /

(2015)

Retail

5/4/2015

3,828

0.41 acres

4/30/2025

12,359

56,506

(1)

Monthly rental income is straight-line rental income over the lease term, including the reimbursement of certain operating expenses, in effect as of December 31, 2015

The Company does not and will not, until such time as Federal law allows, grow, harvest, distribute or sell marijuana or any substances that violate the laws of the United States of America.

Critical Accounting Policies, Judgments and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of these consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the consolidated financial statements. We believe that the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of the consolidated financial statements.

Deferred Leasing Costs

Commissions and other direct costs associated with the acquisition of tenants, or lessees, are capitalized and amortized on a straight-line basis over the terms of the related leases. Costs associated with unsuccessful leasing opportunities are expensed.

Leasing commissions of $205,077 were deferred during the year ended December 31, 2014. Leasing commissions of $17,511 were refunded during the year ended December 31, 2015. Deferred leasing costs charged to property expenses for the years ended December 31, 2015 and 2014, were $27,571 and $2,532, respectively. As of December 31, 2015, $157,463 of deferred leasing costs are included on the Balance Sheet as a deferred asset.

Debt Issuance Costs

Costs associated with obtaining, closing, and modifying loans and/or debt instruments such as, but not limited to placement agent fees, attorney fees and state documentary fees are capitalized and charged to interest expense over the term of the loan.

Debt issuance costs of $10,634 and $19,152 were capitalized during the years ended December 31, 2015 and 2014, respectively. Debt issuance costs charged to interest expense for the years ended December 31, 2015 and 2014, were $13,210 and $5,218, respectively. As of December 31, 2015, $11,357 of debt issuance costs are included on the Balance Sheet within Prepaid expenses and other assets.

Real Estate Property

Real estate property is recorded at cost, less accumulated depreciation and amortization. Real estate property, excluding land, is depreciated using the straight-line method over the estimated useful life of the respective assets. Leasehold improvements are amortized using the straight-line method over the shorter of the related lease term or useful life. Maintenance, repairs, and minor improvements are charged to expense as incurred; major renewals and betterments that extend the useful life of the associated asset are capitalized. When real estate property is sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in results of operations for the period.

Revenue Recognition

Before revenue can be recognized, four basic criteria must be met: persuasive evidence of an arrangement exists; the delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured.

The Company's revenues are rental income generated by leasing acquired real estate properties to licensed marijuana operators. All leases are classified as operating leases. Rental income is recognized on a straight-line basis over the terms of the leases. Straight-line rent is recognized for all tenants with contractual fixed increases in rent. Deferred rent receivable represents rental revenue recognized on a straight-line basis in excess of billed rents. Reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as rental income in the period the applicable costs are incurred.

Stock-Based Compensation

The Company estimates the fair values of share-based payments on the date of grant using a Black-Scholes option pricing model, which requires assumptions for the expected volatility of the share price of our common stock, the expected dividend yield, and a risk-free interest rate over the expected term of the stock-based financial instrument.

Since the number of outstanding and free-trading shares of the Company’s common stock is limited and the trading volume is relatively low, we do not have sufficient company specific information regarding the volatility of our share price on which to base an estimate of expected volatility. As a result, we use the average historical volatilities of similar entities within our industry as the expected volatility of our share price.

The expected dividend yield is 0% as the Company has not paid any dividends on its common stock and does not anticipate it will pay any dividends in the foreseeable future.

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant date with a remaining term equal to the expected term of the stock-based award.

For stock-based financial instruments issued to parties other than employees, we use the contractual term of the financial instruments as the expected term of the stock-based financial instruments.

The assumptions used in calculating the fair value of stock-based financial instruments represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented.

Results of Operations For the Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014

Revenue

Revenue for the year ended December 31, 2015, was $625,864 compared with revenue of $108,871 for the year ended December 31, 2014. Revenues for 2015 and 2014 were generated as a result of rental income from operating leases for three real estate properties. Revenue increased by $516,993 for 2015 compared with revenue for 2014 as a result of a full year of revenues from two properties acquired in June 2014 and September 2014 and a third real estate property acquired in May 2015.

Certain property expenses are reimbursable to the Company through our existing leasing arrangements. During the years ended December 31, 2015 and 2014, the Company recorded $57,223 and $13,157, respectively, of revenue pursuant to operating lease agreements to offset a portion of the property expenses incurred during the respective periods.

Operating Expenses

Property expenses consist of those costs associated with acquiring and leasing real estate properties. These expenses include costs for commissions, appraisals, real property taxes, insurance, repairs and maintenance. For the year ended December 31, 2015, we incurred property expenses of $123,589 compared with $72,859 for the year ended December 31, 2014. The increase of $50,730 in property

expenses was primarily attributed to an increase of $37,197 in property taxes and insurance costs associated with a full year of expenses for two properties acquired in 2014 and a third property acquired in May 2015 and an increase of $25,040 in leasing commissions during 2015. These property expenses were partially offset by a reduction of $12,385 in property appraisals and inspection fees as a result of less property evaluations during 2015 compared with 2014.

General and administrative expenses for the year ended December 31, 2015, decreased by $801,251 to $257,318 compared with general and administrative expenses of $1,058,569 for the year ended December 31, 2014. The decrease in general and administrative expenses during 2015 was primarily attributed to a reduction in professional fees, legal fees, and consulting services, of which $723,342 was associated with non-cash stock-based compensation for consulting services.

Depreciation expense for the year ended December 31, 2015, was $102,526 compared with depreciation expense of $38,173 for the year ended December 31, 2014. Depreciation expense increased by $64,353 for 2015 compared with depreciation expense for 2014 as a result of a full year of depreciation recorded for two properties acquired in 2014 and a third property acquired in May 2015.

Other Expenses

Interest expense for the year ended December 31, 2015, increased by $149,862 to $254,212 compared with interest expense of $104,350 for the year ended December 31, 2014. The increase in interest expense for 2015 was primarily due to a full year of interest expense incurred on a $1,800,000 promissory note used to fund a real estate property acquisition in June 2014 and interest expense incurred on a $925,000 promissory note used to fund a real estate property acquisition in May 2015.

We had a net loss of $111,781, or a basic and diluted loss per share of $0.01, for the year ended December 31, 2015, compared with a net loss of $1,165,080, or a basic and diluted loss per share of $0.09, for the year ended December 31, 2014. The decrease of $1,053,299 in the net loss for 2015 compared with 2014 was due to an increase in revenues of $516,993 and a reduction in operating expenses of $686,168 for 2015, partially offset by an increase of $149,862 in interest expense associated with two promissory notes used to fund the acquisitions of two of our three real estate properties acquired in 2014 and 2015.

Liquidity and Capital Resources

The following table summarizes the cash flows for the years ended December 31, 2015 and 2014:

	2015		2014
Cash Flows:
Net cash provided by (used in) operating activities	$	110,353	$	(227,295)
Net cash used in investing activities		(897,143)		(2,993,439)
Net cash provided by financing activities		914,366		3,396,048

Net increase in cash		127,576		175,314
Cash at beginning of period		175,792		478

Cash at end of period	$	303,368	$	175,792

The Company had cash of $303,368 at December 31, 2015, compared with cash of $175,792 at December 31, 2014, an increase of $127,576. The increase in cash during 2015 was primarily attributed to proceeds of $925,000 received from a promissory note and $110,353 of cash generated by operating activities; partially offset by the acquisition of real estate property for $895,143 and debt issuance costs of $10,634 associated with the promissory note.

Operating Activities

We had net cash provided by operating activities of $110,353 for the year ended December 31, 2015, which consisted of a net loss of $111,781 and a decrease in net operating assets and liabilities of $12,580; offset by non-cash charges of $234,714.

The net cash provided by operating activities of $110,353 for the year ended December 31, 2015, represented an increase of $337,648 compared with net cash used in operating activities of $227,295 for year ended December 31, 2014. The increase in net cash provided by operating activities for 2015 was the result of a $1,068,225 decrease in net loss for 2015, which was partially offset by a reduction of non-cash charges of $666,749 and a reduction of $63,828 in changes in operating assets and liabilities for 2015 compared with 2014.

Investing Activities

In May 2015, we acquired a real estate property in Denver, Colorado, for $771,750. Pursuant to the terms of a lease agreement for real estate property located in Aurora, Colorado, the Company agreed to contribute $150,000 to improvements to the property. During 2015, we incurred $123,393 of the $150,000 commitment for building improvements.

In June 2014 and September 2014, we acquired real estate properties for $2,970,806 in Denver and Aurora, Colorado. In December 2014, we incurred $22,633 of the $150,000 commitment for building improvements for the property located in Aurora, Colorado.

Financing Activities

We had $914,366 in net cash provided by financing activities for the year ended December 31, 2015, as a result of proceeds of $925,000 from the issuance of a promissory note, partially offset by debt issuance costs of $10,634 during 2015.

We had $3,396,048 in net cash provided by financing activities for the year ended December 31, 2014, as a result of proceeds of $1,800,000 from the issuance of a promissory note and proceeds of $1,615,000 received from the sale of common stock, partially offset by debt issuance costs of $19,152 during 2014.

Although we can provide no assurances, we believe our cash on hand, coupled with revenues generated by rental income and our ability to refinance our equity in the real estate we own, will provide sufficient liquidity and capital resources to fund our business for the next twelve months. In the event we experience liquidity and capital resources constraints because of unanticipated operating losses, we may need to raise additional capital in the form of equity and/or debt financing. If such additional capital is not available on terms acceptable to us or at all then we may need to curtail our operations and/or take additional measures to conserve and manage our liquidity and capital resources, any of which would have a material adverse effect on our business, results of operations and financial condition.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Seasonality

We do not consider our business to be seasonal.

Commitments and Contingencies

We are subject to the legal proceedings described in "Item 3. Legal Proceedings" of this report. We believe that any ultimate liability resulting from such legal proceedings will not have a material adverse effect on our business, results of operations or financial condition.

Inflation and Changing Prices

Neither inflation nor changing prices for the years ended December 31, 2015 and 2014 had a material impact on our operations.

Item 8. Financial Statements and Supplemental Data

The information required by this Item 8 is incorporated by reference herein from "Item 15. Exhibits and Financial Statement Schedules" of this report.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Co-Chief Executive Officers and our Principal Financial Officer, to allow timely decisions regarding required disclosure.

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2015. Based upon that evaluation, our Co-Chief Executive Officers and our Principal Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2015.

Evaluation of Internal Controls and Procedures

We are responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined by Securities Exchange Act Rule 13a-15(f). Our internal controls are designed to provide reasonable assurance as to the reliability of our financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Internal control over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Under the supervision and with the participation of our Co-Chief Executive Officers and our Chief Financial Officer, we have evaluated the effectiveness of our internal control over financial reporting as of December 31, 2015, as required by Securities Exchange Act Rule 13a-15(c). In making our assessment, we have utilized the criteria set forth by the 2013 Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. We concluded that based on our evaluation, our internal control over financial reporting was effective as of December 31, 2015.

The Company is neither an accelerated filer nor a large accelerated filer, as defined in Rule 12b-2 under the Exchange Act, and there is not otherwise included in this Annual Report an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not required to be attested by the Company’s registered public accounting firm pursuant to Item 308(b) of Regulation S-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fourth quarter ended December 31, 2015, or subsequent to the date the Company completed its evaluation, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors & Executive Officers

The names of our directors and certain information about them are set forth below:

Name of Director	Age		Position with Company	Director Since
Shawn Chemtov		42	Co-CEO, Co-Chairman of the Board of Directors	February 10, 2014
Adam Laufer		42	Co-CEO, Co-Chairman of the Board of Directors	February 10, 2014

Shawn Chemtov was appointed Co-CEO and a member of the Board of Directors of the Registrant on February 10, 2014. Mr. Chemtov is an active commercial real estate developer who owns and manages a portfolio of income producing commercial and residential property. Mr. Chemtov is also the CEO of CMG Capital, a licensed mortgage lender, which he founded in 2004. CMG Capital is a direct correspondent lender and an FHA licensee and portfolio lender which has closed more than a billion dollars in residential and commercial property loans since its inception and has raised and is currently servicing approximately $50,000,000 in real estate loans. Mr. Chemtov is a member of, the Florida Association of Mortgage Professionals and Entrepreneurs Organization respectively.

Adam Laufer was appointed as Co-CEO and a member of the Board of Directors of the registrant on February 10, 2014. Mr. Laufer, is an entrepreneur and corporate securities attorney. In 2013, Mr. Laufer, prior to his resignation as CEO and a director of Soleil Capital LP (OTC:JOBI,) successfully negotiated and executed the acquisition of a portfolio of electronic cigarette and personal vaporizer patents. In 2009, Mr. Laufer executed a reverse merger transaction with Vapor Corp. (OTC:VPCO), an electronic cigarette company. And from 2009-2013, Mr. Laufer continued to serve the electronic cigarette company as an advisor; consulting on matters of corporate strategy and regulatory issues related to electronic cigarette products, during which time the company's revenues grew from approx $1M to approx $23M. Mr. Laufer has significant experience in working with, start-up and development stage businesses in defining their corporate strategy, identifying funding and growth opportunities, and in implementing liquidity strategies. Mr. Laufer is a member in good standing of the Florida Bar.

Board Committees

Our board does not have a standing audit committee, a compensation committee or a nominating and governance committee.

Director Compensation

Our board does not have any non-employee directors and no additional compensation is paid to any of our employee directors for serving as a director.

Section 16(a) Beneficial Ownership Reporting Compliance

We are a voluntary filer and Section 16(a) of the Securities Exchange Act of 1934 is not applicable to us.

Code of Ethics

The Company has a code of ethics, "Business Conduct: "Code of Conduct and Policy," that applies to all of the Company's employees, including its principal executive officer, principal financial officer and principal accounting officer, and the Board. The Company intends to disclose any changes in or waivers from its code of ethics by posting such information on its website or by filing a Current Report on Form 8-K.

Item 11. Executive Compensation

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table provides certain summary information concerning the compensation earned for services rendered to the Company for the fiscal years ended December 31, 2015 and 2014, by our Chief Executive Officer and our two other most highly compensated executive officers (the "named executive officers") who served in such capacities at the end of the fiscal year ended December 31, 2015. Except as provided below, none of our named executive officers received any other compensation required to be disclosed by law in excess of $10,000 annually.

Name and Principal Position

Year

Salary ($)

Bonus ($)

Stock Awards ($)

Option Awards ($)

Non-Equity Incentive Plan Compensation ($)

Change in Pensions Value and Nonqualified Deferred Compensation Earnings ($)

All Other Compensation ($)

Total ($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Shawn Chemtov

2015

co-Chief Executive Officer

2014

Adam Laufer

2015

co-Chief Executive Officer

2014

Outstanding Equity Awards at Fiscal Year-End

The following table provides information with respect to outstanding stock option awards for shares of our common stock classified as exercisable and unexercisable as of December 31, 2015 for the named executive officers.

Option Awards

Stock Awards

Name

Number
of Securities
Underlying
Unexercised
Options (#)
Exercisable

Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable

Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)

Option
Exercise
Price ($)

Option
Expiration
Date

Number of
Shares or
Units of
Stock That
Have Not
Vested (#)

Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested (#)

Equity
Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares,
Units
or Other
Rights
That Have
Not Vested ($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Shawn Chemtov

Adam Laufer

Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of our common stock as of March 25, 2016:

• each person whom we know beneficially owns more than 5% of our common stock;

• each of our named executive officers and directors; and

• all of our executive officers and directors as a group.

Except as otherwise indicated, each person and each group shown in the table has sole voting and investment power with respect to the shares of common stock indicated. For purposes of the table below, in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, a person is deemed to be the beneficial owner, of any shares of our common stock over which he or she has or shares, directly or indirectly, voting or investment power or of which he or she has the right to acquire beneficial ownership at any time within 60 days. As used in this prospectus, “voting power” is the power to vote or direct the voting of shares and “investment power” includes the power to dispose or direct the disposition of shares. Common stock beneficially owned and percentage ownership was based on 14,027,939 shares outstanding on March 25, 2016, plus 166,665 shares deemed outstanding pursuant to Rule 13d-3, for a total of 14,194,604 shares outstanding.

Unless otherwise indicated, the address for each person is our address at 4141 NE 2nd Avenue Suite #204A., Miami, Florida 33137.

Beneficial Owner	# of Shares	% of Total
*Directors and Executive Officers:*

Shawn Chemtov	5,959,548	41.98%
co-Chief Executive Officer

Adam Laufer	5,959,547	41.98%
co-Chief Executive Officer

All directors and executive officers as a group (2 persons)	11,919,095	83.97%

*Over 5% Shareholders:*
None

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The following is a description of transactions since January 1, 2014, to which we have been a party in which:

the amounts involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years; and
our directors and executive officers or holders of more than 5% of our common stock, or any member of the immediate family of the foregoing persons or entities affiliated with them, had or will have a direct or indirect material interest.

In February 2014, in connection with the change of control of the Company, our Co-CEOs and Co-Chairman of our board of directors, Messrs. Chemtov and Laufer, purchased the outstanding stockholder loans from Messrs. Peraman and Sarfoh. On August 31, 2014, the outstanding stockholder loans and accrued interest of $99,450 were converted to 19,890 shares of the Company's common stock at a conversion price of $5.00 per share.

In June 2014 the Company acquired real estate property in Denver, Colorado for $2,214,000. The acquisition was partially funded with proceeds from the issuance of a secured promissory note in the amount of $1,800,000. The promissory note is held by Chemtov Mortgage Group ("CMG"), an entity wholly-owned by the Company's co-CEO, Shawn Chemtov. CMG has assigned all ownership and security interest granted to it pursuant to the promissory note to 5353 Mortgage Loan, LLC, a single purpose entity created solely for the purpose of this transaction. CMG invested $100,000 of the $1,800,000 of funds used to finance the purchase of the promissory note. CMG acts as the loan servicing entity for the promissory note, administering the note, processing payments from the Company, and transferring all payments to 5353 Mortgage Loan, LLC. CMG charges no administration fees for servicing the promissory note. During the years ended December 31, 2015 and 2014, the Company paid $180,000 and $80,918, respectively, of interest due pursuant to the promissory note held by CMG.

In May 2015 the Company acquired real estate property in Denver, Colorado for $771,750. The acquisition was funded with proceeds from the issuance of a secured promissory note in the amount of $925,000. The promissory note is held by CMG, an entity wholly-owned by the Company's co-CEO, Shawn Chemtov. CMG has assigned all ownership and security interest granted to it pursuant to the promissory note to a single purpose entity created solely for the purpose of this transaction. CMG acts as the loan servicing entity for the promissory note, administering the note and processing payments from the Company. CMG charges no administration fees for

servicing the promissory note. During the year ended December 31, 2015, the Company paid $53,346 of interest due pursuant to the promissory note held by CMG.

Board Composition and Director Independence

Our business and affairs are managed under the direction of the board of directors. Our board of directors is currently comprised of two members, Messrs. Chemtov and Laufer. Because of their relationships with us, none of them are "independent" under the rules of any national securities exchange or Rule 10A-3 under the Securities Exchange Act of 1934, or the Exchange Act.

Item 14. Principal Accountant Fees and Services.

Paritz & Company, P.A. ("Paritz") has served as the Company’s independent registered public accounting firm for the years ended December 31, 2015 and 2014. In accordance with the requirements of the Sarbanes-Oxley Act of 2002, all audit and audit-related services and all non-audit services performed by our current independent public accounting firm are approved in advance by our Board of Directors, including the proposed fees for any such service, in order to assure that the provision of any such service does not impair the accounting firm's independence. The Board of Directors is informed of each service actually rendered.

Independent Auditor Fees

The following table sets forth fees billed, or expected to be billed, to the Company by the Company’s independent auditors for the years ended December 31, 2015 and 2014, for (i) services rendered for the audit of the Company’s annual financial statements and the review of the Company’s quarterly financial statements; (ii) services rendered that are reasonably related to the performance of the audit or review of the Company’s financial statements that are not reported as Audit Fees; (iii) services rendered in connection with tax preparation, compliance, advice and assistance; and (iv) all other services:

	Paritz & Company, P.A.
	2015		2014
Audit fees	$	14,110	$	14,300
Audit related fees		−		−
Tax fees		−		−
Other fees		−		−
Total Fees	$	14,110	$	14,300

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) List of Documents filed as part of this report:

(1) Financial Statements

Report of Paritz & Co., Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2015 and 2014

Consolidated Statement of Operations for the years ended December 31, 2015 and 2014

Consolidated Statement of Changes in Stockholders' Equity for the years ended December 31, 2015 and 2014

Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules

Schedule III - Real Estate and Accumulate Depreciation

All other schedules are omitted because they are not applicable, or because the required information is included in the financial statements or notes thereto.

(b) Exhibits.

The following exhibits are filed herewith or incorporated herein by reference.

Exhibit Number	Description of Exhibit
3.1	Amended and Restated Certificate of Incorporation of the Registrant (1)
3.2	Bylaws of the Registrant (2)
4.4	Specimen Common Stock Certificate (2)
14.1	Code of Ethics (2)
31.1*	Rule 13a14(a)/15d-14(a) Certification of co-Chief Executive Officer
31.2*	Rule 13a14(a)/15d-14(a) Certification of Chief Financial Officer
31.3*	Rule 13a14(a)/15d-14(a) Certification of co-Chief Executive Officer
32.1*	Section 1350 Certification of co-Chief Executive Officer
32.2*	Section 1350 Certification of Chief Financial Officer
32.3*	Section 1350 Certification of co-Chief Executive Officer
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Definition Linkbase Document

*	Filed herewith.
(1)	Incorporated by reference to the Registrant's Periodic Report on Form 8-K as filed with the SEC on February 28, 2014.
(2)	Incorporated by reference to Registration Statement on Form S-1, filed with the Securities and Exchange Commission, Registration Statement File No. 333-167824, on June 28, 2010.

Paritz & Company, P.A.

15 Warren Street, Suite 25

Hackensack, New Jersey 07601

(201)342-7753

Fax: (201) 342-7598

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Stockholders of MJ Holding, Inc.

We have audited the accompanying balance sheets of MJ Holding, Inc. as of December 31, 2015 and 2014, and the related statements of income, stockholders’ equity (deficit), and cash flows for each of the years in the two year period ended December 31, 2015. Our audit also includes the financial statement schedule listed in the index at Item 15. MJ Holding’s management is responsible for these financial statements and financial statement schedules. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MJ Holding, Inc. as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements referred to above have been prepared assuming that MJ Holdings, Inc. will continue as a going concern. The ability of the Company to continue as a going concern is dependent upon, among other things, its successful execution of its plan of operations and ability to raise additional financing. There is no guarantee that the Company will be able to raise additional capital or sell any of its products or services at a profit. As discussed in note 3 to the financial statements, the Company incurred a net loss of $111,781 for the year ended December 31, 2015 and an accumulated deficit of $1,449,491 as of December 31, 2015. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty

/s/Paritz & Company, P.A.

Hackensack, NJ

March 29, 2016

MJ Holdings, Inc.

Consolidated Balance Sheets

As of December 31, 2015 and 2014

	2015			2014
Assets
Real estate property:
Land	$	747,389		$	551,251
Buildings and improvements		3,141,193			2,442,188
Computer equipment and software		2,000			—
		3,890,582			2,993,439
Accumulated depreciation		(140,699	)		(38,173	)
Real estate property, net		3,749,883			2,955,266
Cash		303,368			175,792
Deferred leasing costs		157,463			202,545
Deferred rent receivable		54,664			6,936
Prepaid expenses and other assets		17,450			73,377
Total Assets	$	4,282,828		$	3,413,916

Liabilities and Stockholders’ Equity
Liabilities
Notes payable - related party	$	2,725,000		$	1,800,000
Security deposits		95,203			102,045
Accounts payable and accrued liabilities		118,983			195,582
Total Liabilities		2,939,186			2,097,627

Stockholders’ Equity
Preferred stock, par value $0.001, 5,000,000 shares authorized; 0 shares issued and outstanding		—			—
Common stock, par value $0.001, 95,000,000 shares authorized; 14,027,939 and 13,878,522 shares issued and outstanding, respectively		14,028			13,879
Additional paid-in capital		2,779,105			2,640,120
Accumulated deficit		(1,449,491	)		(1,337,710	)
Total Stockholders’ Equity		1,343,642			1,316,289
Total Liabilities and Stockholders’ Equity	$	4,282,828		$	3,413,916

See accompanying notes to financial statements

MJ Holdings, Inc.

Consolidated Statements of Operations

For the years ended December 31, 2015 and 2014

	2015			2014
Revenues:
Rental income	$	625,864		$	108,871

Operating Expenses:
Property expenses		123,589			72,859
General and administrative expenses		257,318			1,058,569
Depreciation expense		102,526			38,173
Total operating expenses		483,433			1,169,601

Operating income (loss)		142,431			(1,060,730	)

Interest expense, net - related party		(241,002	)		(99,132	)
Interest expense, net		(13,210	)		(5,218	)

Loss before income taxes		(111,781	)		(1,165,080	)

Provision for income taxes		—			—

Net Loss	$	(111,781	)	$	(1,165,080	)

Basic and diluted net loss per common share:
Weighted average shares outstanding		13,958,592			13,457,822
Net loss per common share	$	(0.01	)	$	(0.09	)

See accompanying notes to financial statements

MJ Holdings, Inc.

Consolidated Statements of Changes in Stockholders' Equity

For the years ended December 31, 2015 and 2014

	Preferred Stock			Common Stock			Additional			Accumulated Deficit			Total Stockholders'
	Shares	Amount		Shares	Amount		Paid-in Capital			Accumulated Deficit			Equity (Deficit)
Balance at January 1, 2014	—	$	—	12,218,205	$	12,218	$	57,190		$	(172,630	)	$	(103,222	)

Sale of common stock	—		—	1,615,000		1,615		1,613,385			—			1,615,000
Common stock issued for services	—		—	14,602		15		77,485			—			77,500
Warrants issued to consultant	—		—	—		—		784,976			—			784,976
Cashless exercise of warrants	—		—	10,825		11		(11	)		—			—
Accounts payable paid by principal stockholders	—		—	—		—		7,665			—			7,665
Conversion of notes payable and accrued interest to common stock	—		—	19,890		20		99,430			—			99,450
Net Loss	—		—	—		—		—			(1,165,080	)		(1,165,080	)
Balance at December 31, 2014	—	$	—	13,878,522	$	13,879	$	2,640,120		$	(1,337,710	)	$	1,316,289

Common stock issued for services	—		—	149,417		149		138,985			—			139,134
Net Loss	—		—	—		—		—			(111,781	)		(111,781	)
Balance at December 31, 2015	—	$	—	14,027,939	$	14,028	$	2,779,105		$	(1,449,491	)	$	1,343,642

See accompanying notes to financial statements

MJ Holdings, Inc.

Consolidated Statements of Cash Flows

For the years ended December 31, 2015 and 2014

	2015			2014
Cash flow from operating activities:
Net Loss	$	(111,781	)	$	(1,165,080	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		102,526			38,173
Stock-based compensation		139,134			862,476
Deferred rental income		(47,728	)		(6,936	)
Amortization of deferred leasing and debt costs		40,782			7,750
Changes in operating assets and liabilities:
Deferred leasing costs		17,511			(205,077	)
Prepaid and other assets		53,351			(59,443	)
Security deposits		(6,842	)		102,045
Accounts payable and accrued liabilities		(76,600	)		198,797
Net Cash Provided by (Used in) Operating Activities		110,353			(227,295	)

Cash flow from investing activities:
Acquisition of real estate property		(895,143	)		(2,993,439	)
Acquisition of computer equipment and software		(2,000	)		—
Net Cash Used in Investing Activities		(897,143	)		(2,993,439	)

Cash flow from financing activities:
Proceeds from the sale of common stock		—			1,615,000
Proceeds from notes payable - related party		925,000			1,800,000
Payment of debt issuance costs		(10,634	)		(19,152	)
Proceeds from loans from stockholders		—			200
Net Cash Provided by Financing Activities		914,366			3,396,048

Net increase in cash		127,576			175,314

Cash at beginning of period		175,792			478
Cash at end of period	$	303,368		$	175,792

Supplemental disclosure of cash flow information:
Cash paid for interest to related party	$	233,346		$	80,918

Supplemental schedule of non-cash financing activities:
Accounts payable paid by principal stockholders	$	—		$	7,665
Stockholder loans and accrued interest converted to common stock	$	—		$	99,450

See accompanying notes to financial statements

MJ Holdings, Inc.

Notes to the Consolidated Financial Statements

December 31, 2015

Note 1 - Description of Business

MJ Holdings acquires real estate zoned for legalized marijuana operations and leases the acquired real estate to licensed marijuana operators, including but not limited to providing complete turnkey growing space and related facilities to licensed marijuana growers and dispensary owners. In addition to our portfolio of income producing real estate, MJ Holdings owns, operates and is developing a portfolio of business units related to the regulated marijuana industry, including internet websites, mobile apps and consumer products.

The Company does not and will not, until such time as Federal law allows, grow, harvest, distribute or sell marijuana or any substances that violate the laws of the United States of America.

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, 5353 Joliet, LLC, MJ Havana, LLC and MJ Sheridan, LLC. Intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions are required in the determination of the fair value of financial instruments and the valuation of long-lived and indefinite-lived assets. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates.

Fair Value of Financial Instruments

Financial instruments include cash, payables, and debt obligations. Except as described below, due to the short-term nature of the financial instruments, the book value is representative of their fair value.

Warrants to Purchase Common Stock and Other Derivative Financial Instruments

We classify as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock. We classify as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). We assess the classification of warrants issued to purchase our common stock and any other financial instrument at each reporting date to determine whether a change in classification between assets and liabilities is required.

Cash

At times the Company has cash in financial institutions in excess of federally insured limits. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its cash balances.

Deferred Leasing Costs

Debt Issuance Costs

Real Estate Property

Long –lived Assets

Long-lived assets, including real estate property and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. We did not record any impairments of long-lived assets during the year ended December 31, 2015.

Revenue Recognition

Stock-Based Compensation

The expected dividend yield is 0% as the Company has not paid any dividends on its common stock and does not anticipate it will pay any dividends in the foreseeable future.

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant date with a remaining term equal to the expected term of the stock-based award.

For stock-based financial instruments issued to parties other than employees, we use the contractual term of the financial instruments as the expected term of the stock-based financial instruments.

Income Taxes

Advertising Costs

Costs related to advertising are expensed as incurred and are included in general and administrative expenses.

Research and Development Costs

Costs related to research and development activities of new business units related to the regulated marijuana industry are expensed as incurred and are included in general and administrative expenses. These costs for 2015 and 2014 were primarily third-party consulting fees.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. In July 2015, the FASB delayed the effective date of the new guidance to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is now permitted after the original effective date of December 15, 2016. The Company is currently in the process of evaluating the impact of adoption of the new accounting guidance on its consolidated financial statements and has not determined the impact of adoption on its consolidated financial statements.

In August 2014, FASB issued guidance that requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The new guidance is effective for the annual period ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. Since this guidance primarily addresses certain disclosures to the financial statements, we anticipate no impact on our financial position, results of operations or cash flows from adopting this standard. The Company is currently in the process of evaluating the additional disclosure requirements of the new guidance and has not determined the impact of adoption on its financial statement disclosures.

In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This guidance provides that debt issuance costs related to a recognized liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for fiscal years and interim periods beginning after December 15, 2015, and is required to be applied on a retrospective basis. Early adoption is permitted for financial statements that have not been previously issued. As of December 31, 2015, we had $11,357 in debt issuance costs associated with $2.7 million of notes payable that would be reclassified from other assets to a reduction in the carrying amount of the note payable. The adoption of this standard is not expected to have a material impact on our financial position and will not impact our results of operations or cash flows.

Note 3 - Going Concern

The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. During the year ended December 31, 2015, the Company incurred a net loss of $111,781. The Company had an accumulated deficit of $1,449,491 as of December 31, 2015. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. Although we can provide no assurances, we believe our cash on hand, coupled with revenues generated by rental income and our ability to refinance our equity in the real estate we own, will provide sufficient liquidity and capital resources to fund our business for the next twelve months.

In the event the Company experiences liquidity and capital resource constraints because of unanticipated operating losses, we may need to raise additional capital in the form of equity and/or debt financing. If such additional capital is not available on terms acceptable to us or at all, then we may need to curtail our operations and/or take additional measures to conserve and manage our liquidity and capital resources, any of which would have a material adverse effect on our financial position, results of operations, and our ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 4 - Real Estate Property Acquisitions

5353 Joliet Street

In June 2014, through its wholly-owned subsidiary, 5353 Joliet LLC, the Company acquired an owner-occupied 22,144 square feet industrial building situated on 1.4 acres of land in Denver, Colorado for $2,214,000. The acquisition was funded with proceeds from the issuance of a secured promissory note in the amount of $1,800,000 and $414,000 of cash on-hand. The promissory note is held by Chemtov Mortgage Group ("CMG"), an entity wholly-owned by the Company's co-CEO, Shawn Chemtov. CMG has assigned all ownership and security interest granted to it pursuant to the promissory note to 5353 Mortgage Loan, LLC, a single purpose entity created solely for the purpose of this transaction. CMG invested $100,000 of the $1,800,000 of funds used to finance the purchase of the promissory note. CMG acts as the loan servicing entity for the promissory note, administering the note, processing payments from the Company, and transferring all payments to 5353 Mortgage Loan, LLC. CMG charges no administration fees for servicing the promissory note.

The promissory note bears interest at 10% per annum, provides for cash interest payments on a monthly basis, matures on June 1, 2016, and is callable at the option of the Company at any time after June 19, 2015. The Company has guaranteed the promissory note and has pledged its ownership interest in 5353 Joliet LLC, and as such its fee-simple ownership interest in the property as security for the promissory note. The promissory note does not restrict the Company's ability to incur future indebtedness. For the years ended December 31, 2015 and 2014, the Company recorded $180,000 and $95,918, respectively, of interest expense related to the promissory note.

In September 2014, the Company entered into a lease agreement contingent upon the lessee obtaining city and state licenses and permits for its intended operations at the premises. The contingencies were met by the lessee, and the lease agreement became effective December 1, 2014. The lease agreement is for a term of seven years and a monthly rent obligation of $25,835, subject to annual increases of 2% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the lessee as additional rent based on the actual expenses incurred - see Note 5 below for additional lease details.

503 Havana Street

In September 2014, through its wholly-owned subsidiary, MJ Havana LLC, the Company acquired an owner-occupied 1,250 square foot building situated on 23,625 square feet of land in Aurora, Colorado for $756,000, exclusive of closing costs. The acquisition was funded with cash on-hand. The property is zoned B-2 and has been approved by the city of Aurora as a retail dispensary for recreational marijuana.

Prior to closing on the property acquisition, the Company had pre-negotiated a 10-year lease agreement with a third-party, a licensed marijuana dispensary company serving both medical and adult (21+) customers in Colorado. Once the closing of the property was completed with the seller, the pre-negotiated lease was executed in September 2014 with the third-party. Pursuant to the terms of the lease agreement, the Company agreed to contribute $150,000 to improvements to the property - see Note 5 below for additional lease details. As of December 31, 2015, the Company had paid $146,026 towards the tenant's building improvements.

1126 South Sheridan Boulevard

In May 2015, through its wholly-owned subsidiary, MJ Sheridan LLC, the Company acquired real estate property located at 1126 South Sheridan Boulevard in Denver, Colorado, for $771,750, exclusive of closing costs. The Company funded the acquisition through the issuance of a promissory note in the amount of $925,000 to a related party of which $771,750 was used to purchase the property. The balance of the funds will be used by the Company as working capital. The acquired property is 17,729 square feet with a 3,828 square foot one story free-standing building. The property is zoned B-2 and has been approved by the city of Denver as a retail dispensary for recreational marijuana.

The promissory note is held by CMG, an entity wholly-owned by the Company's co-CEO, Shawn Chemtov. CMG has assigned all ownership and security interest granted to it pursuant to the promissory note to a single purpose entity created solely for the purpose of this transaction. CMG acts as the loan servicing entity for the promissory note, administering the note and processing payments from the Company. CMG charges no administration fees for servicing the promissory note.

The promissory note bears interest at 10% per annum, provides for cash interest payments on a monthly basis, matures on June 1, 2017. The promissory note is collateralized with the Company's ownership interest in the newly acquired property and its previously acquired property located at 503 Havana Street in Aurora, Colorado. The promissory note does not restrict the Company's ability to incur future indebtedness. For the year ended December 31, 2015, the Company recorded $61,054 of interest expense related to the promissory note.

A summary of real estate property at December 31, 2015, is as follows:

	Estimated		December 31,
	Life		2015
Buildings		30 years	$	2,995,167
Improvements		9-10 years		146,026
Land		Not depreciated		747,389
Computer equipment and software		3 years		2,000
Total real estate property				3,890,582
Less: Accumulated depreciation				(140,699	)
Real estate property, net			$	3,749,883

Note 5 - Operating Leases

The Company generates revenues by leasing its acquired real estate properties through operating leasing arrangements. A summary of revenues generated from our rental properties for the years ended December 31, 2015 and 2014, is as follows:

	2015		2014
Revenues:
Rental payments	$	520,913	$	88,778
Reimbursed operating expenses		57,223		13,157
Deferred rental income		47,728		6,936
Total revenues from rental properties	$	625,864	$	108,871

503 Havana Street

In September 2014, the Company entered into a non-cancelable operating lease agreement with a marijuana dispensary (the "Lessee") to move into the Company's acquired property located at 503 Havana Street in Aurora, Colorado. The lease agreement is for a term of ten years and a monthly rent obligation of $11,250, subject to annual increases of 3% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the Lessee as additional rent based on the actual expenses incurred. Pursuant to the terms of the lease agreement, the Company has agreed to contribute $150,000 to improvements to the property.

Upon the expiration of the term of ten years, the Lessee has the option to renew the lease agreement for one additional ten-year term, on the same terms as provided in the lease agreement. During the third year of the lease agreement, the Lessee may exercise an option to purchase the Property.

5353 Joliet Street

In September 2014, the Company entered into a lease agreement for its property and warehouse building located at 5353 Joliet Street in Denver, Colorado. The lease agreement is for a term of seven years and a monthly rent obligation of $25,835, subject to annual increases of 2% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the lessee as additional rent based on the actual expenses incurred.

The lease was contingent upon the lessee, obtaining city and state licenses and permits for its intended operations at the premises, within the dates provided in the lease agreement. The contingencies were met by the lessee, and the lease agreement became effective December 1, 2014.

Upon the expiration of the seven-year term, the lessee has the option to renew the lease for two separate five-year terms, subject to rent reviews and adjustments, as set out in the lease agreement.

1126 South Sheridan Boulevard

In May 2015, the Company entered into a lease agreement for its acquired property located at 1126 South Sheridan Boulevard in Denver, Colorado. The lease agreement is for a term of ten years and a monthly rent obligation of $10,945, subject to annual increases of 3% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the Lessee as additional rent based on the actual expenses incurred.

Future minimum rental payments, excluding the reimbursement of specified operating expenses, for non-cancelable operating lease agreements are as follows as of December 31, 2015:

2016		574,387
2017		588,457
2018		602,886
2019		617,681
2020		632,857
Thereafter		1,489,861
Total minimal rental payments	$	4,506,129

Note 6 - Related Party Transactions

In February 2014, in connection with the change in control of the Company, the principal stockholders paid $7,665 of the Company's accounts payable, which was recorded as a capital contribution to the Company.

During year ended December 31, 2014, the Company borrowed $5,277 from its principal stockholders and repaid $5,077 of the borrowings to its principal shareholders, resulting in $200 of net borrowings from related parties. The $200 of net borrowings was included as part of the stockholder loans converted into shares of the Company's common stock on August 31, 2014, discussed below in Note 7.

During the years ended December 31, 2015 and 2014, the Company paid $233,346 and $80,918, respectively, for interest due pursuant to $2,725,000 of promissory notes held by CMG, wholly-owned by the Company's co-CEO and shareholder, Shawn Chemtov - see Note 4 above for additional details regarding promissory note held by related party.

Note 7 - Stockholder Loans Payable

Stockholder loans payable consisted of three promissory notes with each of two of its stockholders in which the Company may borrow up to $25,000, $20,000, and $10,000, respectively. These borrowings accrued interest at 5%, 8%, and 8% per annum, respectively. They were due in part in December 2014 and December 2016.

In February 2014, in connection with the change of control of the Company, Messrs. Chemtov and Laufer, purchased the Stock holder loans from Messrs. Peraman and Sarfoh.

On August 31, 2014, the outstanding balance of $99,450 for the stockholder loans and the associated accrued interest were converted to 19,890 shares of the Company’s common stock at a conversion price of $5.00 per share.

For the year ended December 31, 2014, the Company accrued interest expense of $3,214 related to the stockholder loans, which was included as part of the stockholder loans converted to shares of the company's common stock on August 31, 2014, discussed above.

Note 8 - Sale of Unregistered Securities

The Company conducted a private placement of its shares of common stock, whereby we sold 1,615,000 shares of common stock for an aggregate of $1,615,000. We began accepting subscriptions on March 24, 2014 and closed the private placement on April 9, 2014.

For the year ended December 31, 2014, the Company received proceeds from the private placement of $1,615,000.

The shares were issued pursuant to an exemption from the registration requirements under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D promulgated thereunder (“Regulation D”) since, among other things, the transactions did not involve a public offering and the securities were acquired for investment purposes only and not with a view to or for sale in connection with any distribution thereof. Offers and sales were made solely to persons qualifying as “accredited investors” (as such term is defined by Rule 501 of Regulation D).

The securities offered will not be and have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Note 9 - Stock Based Compensation

Warrants

In May 2014, the Company entered into a consulting services agreement for the generation of qualified leads and referrals for the Company’s real estate financing products, with a wholly-owned subsidiary of Medbox, Inc ("Medbox"), a leader in dispensing technologies and consulting services in the regulated marijuana industry.

During the term of the Agreement, the Company had agreed to pay Medbox (i) 50% of any management fee and (ii) 50% of the Net Revenue generated by the Medbox clients. Additionally, during the term of the agreement, Medbox was to receive warrants to purchase 33,333 shares of the Company’s common stock each month until Medbox had been issued an aggregate of 600,000 warrants. The warrants have a five-year term. The exercise price for each monthly warrant was determined based on the volume weighted average price of the Company's common stock for the thirty days prior to the grant date of the warrant.

The Agreement’s initial term was for six months, and was to renew automatically for successive one month terms and could be canceled by either party with 5 days written notice. In October 2014, the agreement with Medbox was terminated and no additional warrants were issued to Medbox pursuant to the agreement.

The fair values of the warrants granted during the term of the agreement were determined using the Black-Scholes option pricing model with the following weighted-average assumptions:

Risk-free interest rate:		1.64%
Expected term:		5 years
Expected dividend yield:		0.00%
Expected volatility:		131.22%

For the year ended December 31, 2014, the Company recorded $784,976 of stock-based compensation expense related to warrants issued for services, which has been classified as General and administrative expenses.

In May 2014, Medbox exercised 33,333 shares of warrants pursuant to a cashless exercise provision, in which Medbox received 10,825 shares of the Company's common stock based on an exercise price of $6.42 per share.

A summary of warrants issued, exercised and expired during the years ended December 31, 2014 and 2015, is as follows:

			Weighted
			Avg.
			Exercise
Warrants:	Shares		Price
Balance at January 1, 2014		—	$	—
Issued		199,998		5.97
Exercised		(33,333)		6.42
Expired		—		—
Balance at December 31, 2014		166,665	$	5.88
Issued		—		—
Exercised		—		—
Expired		—		—
Balance at December 31, 2015		166,665	$	5.88

Common Stock

During the years ended December 31, 2015 and 2014, the Company issued 149,417 and 14,602 shares of common stock, respectively, for consulting services and recorded $139,134 and $77,500, respectively, of stock-based compensation expense for these consulting services, which has been classified as General and administrative expenses. The stock-based compensation expense was calculated based on the grant date fair value of the common stock shares issued in exchange for the consulting services.

Note 10 - Income Taxes

The Company did not incur any federal or state income tax expense or benefit for the years ended December 31, 2015 and 2014.

The provision for income taxes differs from the amounts which would result from applying the federal statutory rate of 34% to the Company’s loss before income taxes as follows:

	For the years ended December 31,
	2015		2014
Computed "expected" income tax benefit	$	(38,006)	$	(396,127)
State income tax benefit, net of federal benefit		(5,773)		(31,398)
Change in valuation allowance		70,007		323,344
Write-off of prior year net operating losses		—		57,406
Nondeductible expenses		122		27,523
True-up of deferred tax asset for stock compensation		(26,350)		19,481
Prior year differences		—		(229)
Provision for income taxes	$	—	$	—

Temporary differences that give rise to the components of deferred tax assets and liabilities are as follows:

	As of December 31,
	2015		2014
Deferred tax assets:
Deferred expenses	$	174,384	$	191,915
Net operating loss carry-forwards		253,278		184,747
Property and equipment		14,492		4,088
Advance payment		8,603		—
Deferred tax assets		450,757		380,750
Less: Valuation allowance		(450,757)		(380,750)
Net deferred tax assets	$	—	$	—

As of December 31, 2015, the Company had net operating losses of approximately $684,000 for federal and state income tax purposes that can be carried forward for up to twenty years and deducted against future federal taxable income. The net operating loss carryforwards expire in various years through 2035. All of the federal and state net operating losses incurred prior to 2014 are subject to 100 percent limitation under the provisions of Internal Revenue Code section 382 due to an ownership change and the continuity of business requirement.

As of December 31, 2015 and 2014, management determined a valuation allowance against the net deferred tax assets of $450,757 and $380,750, respectively. In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making the assessment.

The Company files federal and state income tax returns. These returns remain subject to examination by taxing authorities for all years after December 31, 2011.

MJ Holdings, Inc.

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2015

			Initial Cost						Total Cost													Life on Which Depreciation in Latest Income Statement is Computed
Description / Location of Property	Encumbrances		Land		Buildings & Improvements		Improvement Costs Capitalized Subsequent to Acquisition		Land		Buildings & Improvements		Total		Accumulated Depreciation		Net Real Estate		Year of Construction	Date Acquired
5353 Joliet Street Industrial Building Denver, Colorado	$	1,800,000	$	324,912	$	1,889,088	$	—	$	324,912	$	1,889,088	$	2,214,000	$	96,378	$	2,117,622	1980		6/19/2014	30 yrs. ⁽¹⁾
503 Havana Street Retail Store Aurora, Colorado		—		226,339		530,467		146,026		226,339		676,493		902,832		22,447		880,385	1967		9/24/2014	30 yrs.⁽¹⁾ 9 yrs. ⁽²⁾
1126 S Sheridan Blvd Retail Store Denver, Colorado		925,000		196,138		575,612		—		196,138		575,612		771,750		21,763		749,987	1973		5/4/2015	30 yrs.⁽¹⁾
	$	2,725,000	$	747,389	$	2,995,167	$	146,026	$	747,389	$	3,141,193	$	3,888,582	$	140,588	$	3,747,994

⁽¹⁾ Estimated useful life for buildings
⁽²⁾ Estimated useful life for building improvements

The following table reconciles the changes in the balance of real estate during the years ended December 31, 2015 and 2014:

	2015		2014
Balance at beginning of period	$	2,993,439	$	—
Additions:
Acquisitions during period		771,750		2,970,806
Improvements		123,393		22,633
Deductions:
Dispositions during period		—		—
Balance at end of period	$	3,888,582	$	2,993,439

The following table reconciles the changes in the balance of accumulated depreciation during the years ended December 31, 2015 and 2014:

	2015		2014
Balance at beginning of period	$	38,173	$	—
Depreciation expense during period		102,415		38,173
Dispositions during period		—		—
Balance at end of period	$	140,588	$	38,173

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Miami, Florida this 30th day of March 2016.

	MJ HOLDINGS, INC.

	By:	/s/ Shawn Chemtov
	Shawn Chemtov
	co-Chief Executive Officer

	By:	/s/ Adam Laufer
	Adam Laufer
	co-Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Name	Title	Date
/s/Shawn Chemtov		March 30, 2016
Shawn Chemtov	Chief Executive Officer and Director (Principal Executive Officer, Principal Financial Officer)

/s/Adam Laufer		March 30, 2016
Adam Laufer	Chief Executive Officer and Director (Principal Executive Officer)