American Cannabis Company Inc (OTCMKTS:AMMJ) is a micro-cap B2B MMJ stock that continues to get tons of attention, but hasn’t been among the 2017 class of momentum favorites in the space. The key catalyst driving recent action was the company’s announcement it has secured its second client in the state of Florida. This new client expects to open a cultivation operation and multiple dispensary locations in an effort to create a cannabis-business chain.
Furthermore, American Cannabis Co will be working with this new client to deploy and remotely oversee retail dispensing, cultivation and infused product manufacturing operations. With the addition of this new client, AMMJ has now secured its second consulting contract featuring the Company’s acquisition of an equity stake in the Client’s current and future business operations.
According to the release, the company will provide end-to-end solutions for this new client, including operational planning activities, conceptual design work, deployment of operations, and ongoing remote management. 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.
American Cannabis 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 operational best practices. American Cannabis Company also developed and owns a portfolio of branded products including: The Satchel, SoHum Living Soils, The Cultivation Cube and The High Density Cultivation System. We also 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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As noted above, AMMJ recently announced a clear broadening of its exposure in the Florida market.
Terry Buffalo, CEO of American Cannabis Company, commented: “We are excited to be working with this particular Florida client, as well as having negotiated to acquire an equity position in their business. We are happy to now have completed two client agreements containing an equity component in favor of the Company. We are continuing to see the tide change in the direction of this type of equity stake model, and we are actively exploring the development of hybrid relationships like these, that generate both consulting revenues and the opportunity for recurring profits from our equity interest. We feel that this new strategy will provide a beneficial long-term value to both our clients and our shareholders.”
Traders will note roughly flat 1-3 month action. The situation may be worth watching. American Cannabis Stock has a history of dramatic rallies. Moreover, the listing has witnessed a pop in interest, as transaction volume levels have recently pushed greater than 100% beyond what we have been seeing over the larger time frame. This is particularly important with a float in play that’s extremely small — of 25.6M 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.
Earning a current market cap value of $36.2M, American Cannabis has virtually no cash on the books, which is balanced by about $150K in total current liabilities. One should also note that debt has been growing over recent quarters. AMMJ is pulling in trailing 12-month revenues of $2.8M. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -31%. This may be a very interesting story and we will look forward to updating it again soon. For continuing coverage on shares of American Cannabis Stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!