American Green Inc (OTCMKTS:ERBB) has popped up on our radar after we received promo emails from Penny Stock Hub. That's why we decided to dig a little deeper and see what's behind American Green and make it our OTC focus of the day.Like many other cannabis names, 2015 was a rough one for American Green. However, 2016 looks better as 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. We think the goal with the promo emails are to raise awareness on the many positives taking place at the company.Among the things shareholders can look forward to in 2016 include its Phoenix-based indoor medical marijuana cultivation site. ERBB had recently announced that the building 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 Phoenix facility should be completed by early May. By August or September of this year when the first harvest is completed, we expect the Phoenix facility to generate close to $500k per month. The yield from the harvest will be around 200 pounds per month. The current going rate is around $2500 per pound.
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Last month, ERBB announced that Herbal Elements recently received county approval for an extraction facility built with a cooperating financial arrangement with American Green. Herbal Elements is already producing American Green Premium Joints in Eagle Vail, Colorado. American Green-branded Premium pre-rolled cannabis "joints" are also for sale at a number of dispensaries in Oregon and will soon be for sale by licensed dispensaries in Arizona. The American Green-branded product line is consistent across ERBB’s entire dispensary network, providing premium flower that discerning clients will come to expect. Regional specialties and extract products are also planned for introduction in the very near future.ERBB's business model is to build a suite of offerings to meet the needs at every level of the "cannabis food chain" from consulting services and branding to cultivation and even vending. The company is working to become positioned as a true end-to-end provider in the cannabis space.American Green is well-positioned and 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 is forecasting operating margins of $300,000 on revenues of $750,000 for calendar year 2016 and $600,000 on $1,500,000 revenues for June 30th fiscal year-end. The branding program will account for 25% of revenues and the balance from investment, leasing and consulting services.
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ERBB is one pot stock that has done a good job of marketing itself in the past. However, heavy dilution has weighed on the share price and we're hoping that there isn't a lot of dumping into the Penny Stock Hub promotion. They are calling ERBB an "American Dream." For long suffering shareholders, it's been an "American Nightmare." Right now, all everyone can hope for is that CEO Jonathan Miller delivers and keeps his promises. The good news is that there's no way he could be worse than the former CEO Stephen Shearin. We will be watching ERBB closely and will be updating Insider Financial with any new developments. Sign up today and stay on top of the latest from ERBB!
Disclosure: We have no position in ERBB either long or short. We have not been compensated for this article.
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