American Cannabis Company Inc (OTCMKTS:AMMJ) is a B2B services player in the MMJ space that basically qualifies as a pick and shovel amid the gold rush that now characterizes the marijuana industry as legalization picks up steam in the US and Canada. The stock has been ranging sideways, but has seen volume kick up in recent action on the back of the company’s announcement it has secured its sixth client in the state of Pennsylvania.
According to the most recent press release, the company states that it will work with the new client to “strategically plan, deploy and remotely oversee the client’s retail dispensing, cultivation and infused product manufacturing operations within the city of Philadelphia.” In addition to the Company’s consulting engagement, AMMJ will also be taking an equity interest in the client’s project and operations.
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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According to the company’s recent release, they plan to provide end-to-end solutions for this new client, which include operational planning activities, conceptual design work, application completion, deployment of operations and ongoing remote management. AMMJ expects to leverage this contract to secure additional revenues through long-term consulting agreements and potential future sales of ancillary products.
Terry Buffalo, CEO of American Cannabis Company, commented: “We are excited to be working with this particular client, as well as collaborating with them by taking an equity position in their business. The Company is actively exploring the development of hybrid relationships like this, 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.”
As noted above, AMMJ stock has been roughly sideways on the chart of late. However, volume has been kicking up a bit, with the stock’s recent average trading volume running 12% over what American Cannabis has registered over the longer term.
Traders should note this as important with a float in play that’s limited — under 26M shares. This type of thing is something to watch out for: ramping trading activity can overwhelm available supply in a stock with this type of small float, leading to an upward burst in prices.
Now commanding a market cap of $37.9M, AMMJ has virtually no cash on the books, which must be weighed relative to 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%. You can bet we will update this one again as new information comes into view. 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!