American Cannabis Company Inc (OTCMKTS:AMMJ) Expands California Exposure Under the Radar

American Cannabis Company Inc (OTCMKTS:AMMJ) Expands California Exposure Under the Radar


American Cannabis Company Inc (OTCMKTS:AMMJ) was caught by the Jeff Sessions news, just like the rest of the cannabis space on Thursday. Attorney General Sessions rescinded a federal measure enabling less risk in state legalization of marijuana that dates back to the Obama era. However, one place that might be toughest to regulate at a federal level is California. AMMJ’s most recent announcement ties these ideas together in a way that might actually put the stock in an interesting position going forward.

To wit: the company just announced that it has secured a consulting contract with California City Cannabis Company (California City) in the state of California. According to the release, in conjunction with the consulting agreement, AMMJ will acquire an equity stake in California City’s project (which we describe more below). The project is still non-operational and in the development stage at this point, but presents some interesting dimensions.

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.

AMMJ 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.

AMMJ 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.

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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According to the AMMJ release, “California City has plans to construct a cannabis business park located in California City, California. The plans for the park include a total twenty to twenty-five acres of land set aside for development, and the potential hosting of future extraction, cultivation and distribution businesses. It is expected that this property will ultimately house up to sixteen (16) greenhouses at 25,000-35,000 square feet per unit, with a canopy limit of 22,000 plants. The project will begin with the initial construction of two greenhouses, which California City expects to expand into sixteen greenhouses over the next three years. California City’s project has been initially granted permits for medical cultivation and extraction and anticipates converting all of its licenses to recreational use after city regulatory review and approval.”

If the project has adequate funding (and the ROI on California cannabis investment has to be through the roof right now), then this could end up being a big deal.

Terry Buffalo, CEO of American Cannabis Company, commented: “We are ecstatic to be a part of this project in California City. We see tremendous potential in the scalability of this project and look forward to having a long-standing relationship with this client. Being equity participants in the project allows our company to focus on the long-term goals of our client and increase value to our shareholders. We want our client to be a sustainable success, as this business park will serve as a beacon for all aspiring cannabis business entrepreneurs who wish to cultivate, extract or distribute cannabis.”

Currently trading at a market capitalization of $57.1M, AMMJ has a store ($1.9M) of cash on the books, which compares with virtually no total current liabilities. AMMJ is pulling in trailing 12-month revenues of $2.9M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 318%. You can bet we will update this one again as new information comes into view. Sign-up for continuing coverage on shares of $AMMJ stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $AMMJ, either long or short, and we have not been compensated for this article.

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