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American Green Inc (OTCMKTS:ERBB): Making Of A Marijuana Capital

American Green Inc (OTCMKTS:ERBB): Making Of A Marijuana Capital
Written by
Jim Bloom
Published on
September 27, 2017
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In today’s piece, we examine the big step American Green Inc (OTCMKTS:ERBB) has taken as it seeks to profit from the burgeoning regulated marijuana industry. We hope this will help you to gain a better understanding of ERBB’s prospects so you can see if it could make a great marijuana investment opportunity. Before we go any further, take a look at the share price action. ERBB Daily ChartIn case you are coming across ERBB for the first, we’ve provided a brief profile of the company.ERBB is an American corporation headquartered in Tempe, Arizona. The company engages in the medical marijuana business where it operates largely as a service provider. It provides a range of products and services that businesses in regulated marijuana market require in order to operate successfully. As such, ERBB’s solutions range from cultivation to inventory tracking services for cannabis producers and dispensaries. ERBB owns a line of health supplements under the OneBode brand.ERBB posted a strong revenue growth in the June quarter and its cash balance also improved both on quarter-over-quarter and year-over-year basis. However, ERBB is not generating significant revenues and it may need to shore up its financials.Although ERBB’s current sales are not significant, the revenue opportunity in its industry is enormous. According to a report by New Frontier Data and Viridian Capital Advisors, the US legal marijuana sales will reach $24.1 billion in 2025, up from $6.6 billion in 2016. With more states legalizing marijuana for both medical and recreational use, the marijuana market is expanding.Marijuana tourism industryERBB has identified an intriguing way to profit from the regulated marijuana industry. The company is looking to capitalize on the emerging marijuana tourism industry – an offshoot of the broad legal marijuana industry. Towards this end, ERBB in August this year became the first company to acquire an entire town in order to transform it into a cannabis tourism hub.On September 19, ERBB announced the successful purchase of Nipton town ahead of schedule. Nipton is a 100-year-old community located in San Bernardino, California. In a November 2016 ballot, California residents voted in favor of legalization of recreational marijuana in the state – a move that is expected to expand California’s legal marijuana market.Recreational marijuana sales in California are expected to begin next January. According to market studies by New Frontier Data and ArcView Market Research, recreational marijuana sales will add $1.5 billion to California’s legal marijuana economy in 2018. By 2020, California’s total legal marijuana market is projected to grow to $6.45 billion, up from 2.81 billion in 2016.Besides the US, other countries where marijuana is legal in one way or another include Canada, Brazil, Mexico, Germany and Australia. In Africa, Lesotho recently became the first country on the continent to issue an official marijuana production license – a move that could be followed by other African countries looking to expand their economies and create jobs for the millions of unemployed youths on the continent.With the purchase of Nipton town, ERBB is looking to profit from not just the California legal cannabis market, but also from the global legal marijuana movement. The plan that ERBB has for Nipton is to modernize it and transform into a marijuana hospitality destination that will draw visitors from across the US and from abroad. ERBB does not seek to dismantle Nipton’s standing as an attraction but to enhance it. David Gwyther, the president and chairman of ERBB stated the following.

"But the attraction is what it is today and enhancing what it is, not changing it to something else is the trick. Nipton must ultimately stay 'Nipton'.

Source:Monetizing a cannabis tourist destinationERBB’s Nipton cannabis tourist hub could attract cannabis consumers, investors and entrepreneurs. The Nipton tourist destination will unlock multiple monetization opportunities for ERBB, allowing the company to grow its sales consistently.For example, ERBB could pitch its consulting services to investors and entrepreneurs visiting Nipton, thus unlocking crucial service revenue for the company. And the visitors to Nipton will provide market for ERBB’s products such as CBD-infused bottled water, which it plans to produce and commercialize in Nipton. ERBB is also in talks with legal marijuana companies to set up production bases in Nipton.ERBB hopes to make Nipton a hub that embraces marijuana in every way legally possible.As legal cannabis industry gets crowded with companies seeking to sell cannabis-based products, the cannabis tourist hub is a unique venture that would not only give ERBB a much-needed revenue break, but also boost its credentials.In an emerging industry such as this one, credentials matter a lot. In Canada, for example, we’ve seen CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) and Organigram Holdings Inc. (OTCMKTS: OGRMF) land multimillion-dollar marijuana supply agreements with a regional government largely because of their profile as trusted cannabis producers with a strong focus on the highest product quality and safety standards. As such, a venture that bolsters ERBB’s credentials could boost the company’s revenue opportunities in legal cannabis industry in multiple ways.We will be updating our subscribers as soon as we know more. For the latest updates on ERBB, sign up below!For the full story, check out our complete coverage on ERBB.Disclosure: We have no position in ERBB and have not been compensated for this article.

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