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A Closer Look At American Cannabis Company Inc (OTCMKTS:AMMJ)

A Closer Look At American Cannabis Company Inc (OTCMKTS:AMMJ)
Written by
Alex Carlson
Published on
September 26, 2016
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American Cannabis Company Inc (OTCMKTS:AMMJ) is making another run up the charts after building support at the $.10 level. We last profiled the company back in April and said that we were surprised it took investors this long to discover AMMJ. It's one of the few cannabis names producing steady revenues and not burning through investor cash and keeping debt levels to a minimum. In taking a closer look, Green Rush 2.0 is just around the corner and investors need to pay attention to AMMJ.First up, a little background on the company. American Cannabis Company Inc describes itself as offering "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."AMMJ was co-founded by Corey Hollister and Ellis Smith. They are the former owners of The Village Green Society which is a cannabis business located in Boulder, CO. The pair were the first to utilize a niche growing technique known as True Living Organics (TLO) on a commercial scale to cultivate medical cannabis for the Colorado patient market; which was an innovation they received national recognition for. Furthermore, the two partners were able to help the regulated cannabis industry identify a new type of pest/mite; the Hemp Russet Mite.We believe the timing couldn't be better for investors to allocate a portion of their portfolio to cannabis names. According to a report from a cannabis analytics firm New Frontier and Arcview Market Research, sales of recreational pot shot up 184% year over year, up to $998M in 2015 from $351M in 2014. Colorado and Washington state were responsible for a lot of the industry’s growth, the report said. Colorado tax revenue and recreational sales is predicted to be $135M for 2015, a 77% hike from $76M in revenue in 2014. Washington pulled in $70M in tax revenue. Come November, the states of California, Nevada, Arizona, Massachusetts, Maine, Rhode Island and Vermont are all expected to decide on recreational legalization this year. Florida, Ohio, Missouri, and Pennsylvania will vote on medical legalization in some form.To fund its growth plans, AMMJ signed an investment agreement with Tangiers Global LLC for a fixed funding equity commitment of up to $5 million. The closing is subject to an effective registration statement. Concurrent with execution of the investment agreement, the Company also entered into a bridge loan facility of up to $330,000 pursuant to which it issued an 8% fixed price convertible promissory note due February 14, 2017. Proceeds of both the bridge loan and equity facilities may be used for working capital purposes and to pursue acquisition or other strategic opportunities.In June, the US Patent Office issued a patent to AMMJ for The Satchel™, the company's child-resistant exit package solution. The Satchel™ is a pouch-like case designed as a high-quality, child-resistant exit package solution for the regulated cannabis industry. The Satchel™ meets the child-safety requirements of the Consumer Products Safety Commission (CPSC), making it compliant in all states. The Satchel™ was also tested and meets the standards set by the American Society for Testing and Supplies (ASTM).This month, AMMJ announced third quarter sales to date for SoHum Living Soils™ of over $53,000 to multiple customers. SoHum is a proprietary "just add water" growing medium that contains 100% natural ingredients and provides the plant a full buffet of macro/micro nutrients to achieve genetic optimization of the Cannabis plant. Not only does SoHum optimize the plant's potential, it eliminates the need for complex feeding schedules and the associated risks of operator error. CEO Corey Hollister said:

"SoHum Living Soils™ is an innovative solution for the regulated cannabis markets. The product reduces cost and risk while improving quality and consistency, providing a truly meaningful value proposition for customers. SoHum is the basis for ACC's Geoponics methodology, 'the art and science of agriculture in soil'. The goal of our methodology is to establish profitable and ethical cultivation methods in the regulated Cannabis markets that support our mission of '...redefining society's relationship with Cannabis through responsible stewardship.'"

Currently trading with a market cap of $7.9 million, AMMJ is an exciting story among cannabis names. In looking at the company's latest financials in the quarter ending June 30, AMMJ reported $229k in cash, $523k in total assets, $398k in total liabilities, $444k in revenues, and a net loss of $85k. In comparison to other pot stocks, AMMJ is in a much better financial position while trading with a market cap of less than $10 million. We will be updating our subscribers as soon as we know more. For the latest updates on AMMJ, sign up below!Disclosure: We have no position in AMMJ and have not been compensated for this article.

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