American Green Inc (OTCMKTS:ERBB) is heavily banking on a new Green Rush happening in the marijuana space. While players like Terra Tech Corp and Cannabis Sativa Inc have staged big rallies so far this year, American Green has been left behind in sub-penny land. All eyes are now on former CFO and new CEO Jonathan Miller to turn things around for ERBB. So far he has started 2016 with a series of positive news announcements, but they have not been able to move the needle much of the share price.American Green is heavily banking on the Arizona marijuana market. Just yesterday, ERBB signed a Purchase Agreement for a Class A building in Tempe, Arizona that will be a prime location for a Medical Marijuana Dispensary it will lease to one of its license holder clients. This will be the only MMJ dispensary in a Class A building in the greater Phoenix area. The surrounding cities of Tempe, Chandler and Ahwatukee will provide the bulk of clients for the dispensary. It has easy on/off access from I-10. The area is underserved and should generated substantial revenue based on existing patient counts in the area.ERBB's primary focus is the Phoenix market. Its Phoenix-based indoor medical marijuana cultivation site will house a 12,000 square foot medical marijuana cultivation facility intended for use by its licensed tenant-client — Natural Herbal Remedies. Construction of the facility is already underway and American Green Premium marijuana products will be available to authorized Arizona buyers this coming year. The 12,000 square-foot facility is expected to begin cultivation in late July after the completion of construction. At a cost of approximately $1.4 million, the facility will produce approximately 200 pounds of cannabis material per month that will be sold as a combination of flower and extracts.In February, ERBB launched The American Green Express, which will deliver cannabis to approved recipients, starting in Arizona. The service will offer a new level of convenience for patients and will feature the development and integration of a software and logistics application for use in Arizona and other states. CEO Jonathan Miller said:
"There are several delivery services out there doing an 'okay' job but they are clearly struggling to provide a comprehensive service that fulfills the needs of the patients while complying with the strict laws and regulations outlined in each state. We believe our company can provide a complete and effective solution that will set the standard for this market segment and generate sustainable and recurring revenues for the company. American Green Xpress will differentiate itself from the competition because they are not integrating all of the software 'hooks' that people see in other apps such as Uber, Instagram and Salesforce. The Xpress delivery app will drive revenues for American Green while increasing sales volume with home delivery -- a time-tested, common way to shop. Patients can schedule delivery, and we can update customers with new product announcements through in-app messaging."
While shares of ERBB have lagged behind other pot stocks, we think shares could be get going again on the back of a new Green Rush. We think 2016 will be a breakout year for the marijuana industry and the cannabis sector. Roughly 14 states could legalize marijuana this year, adult-use cannabis or possibly both, either at the ballot box or through state legislatures. While it’s doubtful all those states will be successful, there’s a good chance at least a handful will legalize in 2016. No other single year has offered such incredible promise in terms of the sheer volume of states that could legalize, thanks to other pioneering marijuana markets and growing support for cannabis in general.ERBB was one of the first publicly traded technology companies in the cannabis industry. The company claims to have over 50k shareholders, most of whom are disappointed with the company. The good news is it was former CEO Stephen Shearin that caused this heartache. If new CEO Jonathan Miller can turn things around and deliver, we could easily see many investors doubling down on their positions along and new buyers coming into the stock. We will be updating Insider Financial as soon as we know more. For continuing coverage on ERBB, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in ERBB and have not been compensated for this article.