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Saturday, January 23, 2021

Updated Look at American Cannabis Company Inc (OTCMKTS:AMMJ)

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American Cannabis Company Inc (OTCMKTS:AMMJ) is a penny play in the business services niche of the cannabis patch in the US and Canada. The stock has been relatively rangebound of late, but has some interesting catalysts in play and we thought it was a good time to update the story.

The company has made two key announcements in recent weeks. Most recently, it announced its Maryland-based client successfully secured a dispensary license for the state’s new medical cannabis program. This authorization allows the client to distribute cannabis to qualifying patients within the state of Maryland. Just before that, the company came out with an announcement that it has signed another client in Pennsylvania who will be applying for a dispensary license in the state’s upcoming medical marijuana program. AMMJ expects to leverage this contract to secure additional revenues through long-term consulting agreements and potential sales of ancillary products.

American Cannabis Company Inc (OTCMKTS:AMMJ) promulgates itself as a company that provides solutions for businesses operating in the cannabis industry in the United States and Canada.

It provides advisory and consulting services, including commercial cannabis business planning services, cannabis business license applications, cultivation build-out consulting, cannabis regulatory compliance, compliance audit services, cannabis business growth strategies, and cannabis business monitoring services.

The company also sells products and equipment used in the cultivation, processing, transportation, or retail sale of cannabis. Its product offerings include The Satchel, a pouch-like case designed as a child-proof exit package solution for the regulated cannabis industry; SoHum Living Soil, a just-add-water soil; High Density Racking System, which ensures the proper use of space; The Cultivation Cube, a self-contained and scalable cultivation system; and other products for cultivation operations, medicinal and recreational cannabis dispensary operations, and infused-products.

The company is headquartered in Denver, Colorado.

According to company materials “American Cannabis Company, Inc. offers end-to-end solutions to existing and aspiring participants in the cannabis industry. We utilize our industry expertise to provide business planning and market assessment services, assist state licensing procurement, create business infrastructure and implement operational best practices. American Cannabis Company also developed and owns a portfolio of branded products including: The patented Satchel, SoHum Living Soils, The Cultivation Cube™ and The High Density Cultivation System. In addition, we design and provide other industry specific custom product solutions. The building and development of our brands and product suite is based on our Geoponics Philosophy, “the art and science of agriculture in soil.””

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Of securing a new client in Pennsylvania, the company’s chief, Corey Hollister, commented: “We are excited to be working with this client in the pursuit of a state licensed dispensary operation within the upcoming Pennsylvania medical marijuana program. As more states adopt medical marijuana programs, we are seeing a variety of market structures for license ownership ranging from vertically integrated frameworks all the way to decoupled and hybrid models. Pennsylvania has selected a hybrid model that permits for standalone dispensary operations, and our client is well positioned to capitalize on this opportunity.”

Where the more recent catalyst is concerned, Hollister noted: “We are excited about our client securing a license to operate in this emerging market. Maryland has done a strong job structuring the market and positioning operators for success in meeting the needs of qualifying patients within the state.”

AMMJ is a stock who’s past is littered with sudden rips. Moreover, the stock has witnessed a pop in interest, as transaction volume levels have recently pushed 8% over the long run average. Traders should note this as important due to the relatively small float size in the stock (just a tad more than 16M shares). One is wise to respect the dynamic this may create — a jump in average daily transaction volume in a stock with a restricted float can unleash fireworks as supply is squeezed.

At this time, carrying a capital value in the market of $35.7M, American Cannabis Company has an extremely small store of cash on the books, which is balanced by an appreciable load ($150k) of total accumulated debt. AMMJ is making real money, with trailing 12-month revenues coming in at 2.77M. However, the company is seeing declines on the top line, with y/y quarterly revenues falling at -31%. We will update the story again soon as developments transpire. For continuing coverage on shares of $AMMJ stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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