Americann Inc (OTCMKTS:ACAN) is a struggling player in the cannabis patch that has been searching for a catalyst to stanch the flow of selling in the tape over the past 3 months, a period that has seen nearly 80% stripped from share prices. In its latest headline, ACAN has made it very clear that it supports the landmark adult use cannabis bill signed by Massachusetts Governor Charlie Baker on July 28, 2017. That bill is understood by ACAN as a real catalyst.
According to their latest press release, the new law implements the successful ballot measure approved by voters in November of 2016. Massachusetts is the first state in the eastern U.S. to legalize the adult use of marijuana. You may say, this is old news. And we can certainly sympathize with that position. However, one must admit that, compared to some of the western states going through a similar process, Massachusetts is much more of an island, which points to a more powerful market opportunity for those positioned there. We think ACAN is simply drawing attention to this fact given that MA is one of its strongholds, according to management.
Americann Inc (OTCMKTS:ACAN) frames itself as a company that provides various services to the regulated cannabis industry in the United States. The company offers services that include consulting, design, construction, and financing to approved and licensed marijuana operators. It focuses on developing, owning, and supporting medical cannabis cultivation and processing facilities.
According to company materials, “AmeriCann is a publicly traded company that plans to develop and lease sustainable, state-of-the-art medical cannabis cultivation properties. The Company has over 1,000,000 square feet of facilities in the planning and design stages of development. The Company has designed a proprietary line of cannabis infused products which will be branded and licensed to companies in regulated markets. AmeriCann, Inc. is a Certified B Corp, an acknowledgment of the company’s commitment to social and environmental ethics, transparency and accountability. AmeriCann became the first public cannabis company to earn this respected accreditation.”
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As noted above, ACAN shares have been in a tailspin of late, and the company is searching for catalysts. But it isn’t necessarily a throwaway gesture for management to work to point out the importance of its positioning in the Massachusetts market given its potential to be a regional leader as more eastern states gradually and perhaps inexorably shift toward more progressive attitudes toward marijuana in the future.
“Based on our first-hand experience in Colorado we believe the bill Governor Baker signed is well-drafted and will usher in an exciting new industry in the Commonwealth that will have a number of benefits,” added Tim Keogh, a Massachusetts native and President and CEO of Colorado-based AmeriCann.
“As the industry develops it will create thousands of new jobs, hundreds of millions in much-needed tax revenue and provide welcomed medical and other benefits for the residents of Massachusetts. And while tax revenue is what people focus on, the job creation is in many ways the more important driver for the economy,” continued Mr. Keogh.
We’ve witnessed about 40% added to share values of the name over the past couple days of action, a rally that has pushed up against longer standing distributive pressure in the stock. The situation may be worth watching. ACAN is a stock whose past is littered with sudden rips. Furthermore, the name has witnessed a pop in interest, as transaction volume levels have recently pushed exceeding 200% over what the stock has registered over the longer term.
Traders should note this as important given the stock’s extremely small trading float of 7.4M shares. Traders should not overlook this combination, as a restricted trading float and a jump in trading volume can crimp supply and push share prices higher.
Earning a current market cap value of $31.46M, ACAN has a store ($204K) of cash on the books, which must be weighed relative to about $990K in total current liabilities. ACAN is pulling in trailing 12-month revenues of $90K. However, the company is seeing declines on the top line on a quarterly y/y basis. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $ACAN stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $ACAN, either long or short, and we have not been compensated for this article.