Americann Inc (OTCMKTS:ACAN) is an extremely interesting story in the cannabis patch right now. The stock is lights-out ripping right now, and a big part of that is the company’s recent announcement that it has completed its acquisition of a nearly 53-acre property from Boston Beer Company for $4,475,000. The Company plans to develop the property as the Massachusetts Medical Cannabis Center, one of the largest and most technologically advanced cannabis cultivation facilities in the nation.
Traders will note just shy of 290% during the past month in terms of shareholder gains in the stock. Shares of ACAN stock have also seen an influx of interest lately, with the stock’s recent average trading volume running above 840% beyond what we have been seeing over the larger time frame. Traders should note this as important due to the limited float size in the stock (around 15M 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.
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.
The company was formerly known as Nevada Health Scan, Inc. and changed its name to AmeriCann, Inc. in February 2014. AmeriCann, Inc. was founded in 2010 and is based in Denver, Colorado.
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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.
The press release discussing the company’s new project was extremely revealing, as was the 8-k out six days earlier.
“Designs for the MMCC include the construction of sustainable greenhouse cultivation, processing, and infused product facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program. The Company has received unanimous approval from the Town of Freetown Planning Board for the development of 977,000 square feet of cannabis cultivation and processing infrastructure on the property. In addition, AmeriCann has signed definitive agreements with a provisionally licensed organization to become the initial tenant in the planned MMCC.”
The property was immediately sold to a trust and leased back to the company for a minimum of $30k/month.
“As part of the closing transaction, AmeriCann transferred the property to a real estate investment group, Massachusetts Medical Properties, LLC and entered into a 50-year lease with options to extend for an additional 40 years. The sale-leaseback transaction allows AmeriCann to focus on raising capital to build revenue-generating infrastructure on the property. When fully developed, the MMCC is projected to create over 300 jobs with an annual projected payroll of over $14 million to the local community. Construction is expected to commence in early 2017 with first cannabis produced by late 2017.”
From the 8-k: “As part of a simultaneous transaction, the Company sold the property to Massachusetts Medical Properties, LLC (“MMP”) for approximately $3,572,000, and MMP and the Company entered into a lease, pursuant to which MMP agreed to lease the property to the Company for an initial term of fifty (50) years. The Company has the option to extend the term of the lease for four (4) additional ten (10) year periods. The lease is a triple net lease, with the Company paying all real estate taxes, repairs, maintenance and insurance. The lease payments will be the greater of (a) $30,000 per month; (b) $0.38 per square foot per month of any structure built on the property; and (c) 1.5% of all gross monthly sales of products sold by the Company, any assignee of the Company, or any subtenant of the Company. The lease payments will be adjusted up (but not down) every five (5) years by any increase in the Consumer Price Index. Between October 17, 2016 and April 17, 2017, the monthly lease payments will accrue, with all accrued lease payments to be paid to MMP on April 17, 2017.”
At this time, carrying a capital value in the market of $41.1M, ACAN has almost no cash on the books, alongside total assets a bit less than $4.2M, which compares with an appreciable load ($3.42M) of total accumulated debt. Obviously, the company is making a bet on growth for the overall segment. They will either be bust or one of the leaders in the space, depending on how big their end market ends up being. And that will be largely a factor of how votes go on November 8. We will be waiting with baited breath, and will update the story again very soon. 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 hot stock pick!
