American Green Inc (OTCMKTS:ERBB) New Management's Secret To Success

Just when you thought American Green Inc (OTCMKTS:ERBB) was dead and thought about throwing in the towel, ERBB has traded higher on huge volume as it reaps the rewards that are expected to come from the passing of Arizona’s Prop 205.As previously reported by Insider Financial, in September ERBB replaced its CEO John Miller with its Executive Chairman, David Gwyther, as new CEO. Now, ERBB just reached an agreement with Pat Carrigan to be its new COO. After over two months of consideration, Carrigan was selected. He has a degree in economics from the University of New Mexico and over thirty years in management that include stretches as CFO and President/CEO. Gwyther said:

"I considered the field of applicants. Someone with Pat's background and skills is a valuable find. Though he's not from the canna-industry, he is familiar with our company and products, has a history of agriculture and development, and no fear of technology -- a near-perfect combination of talent and experience that I believe will work best for the company.”

Makes sense. Gwyther continued:

“He understands logistics, the elements that make up successful business ventures, and is a no-nonsense kind of guy when it comes down to business. It's not just what ERBB needed, it's what I believe any successful company in our sector needs. He is certainly quite affable with a quick wit and good nature, but he has plenty of grit and knows how to use it when necessary."

ERBB's prior focus at the end of 2015 was on its ZaZZZ automated vending machines for dispensing cannabis-related products and edibles. Renamed as the "American Green Machine," each vending machine has a biometric verification system for authorizing the sales of cannabis products. The company stated that it believed in the future of vending marijuana and expects that verified vending outside of licensed establishments will become a reality as state and federal regulations change.In less than two weeks, the voters of Arizona will decide upon whether they want Colorado-style legalization or continued zero-tolerance felony enforcement for cannabis consumers. Prop 205, which would legalize marijuana in Arizona, is gaining momentum in a new poll. The proposition aims to grant adults 21 and older the freedom the possess, buy, and grow personal amounts of cannabis, and sets up a limited system of retail shops where people could buy cannabis products.What do Gwyther and Carrigan believe is the secret for success for the company? ERBB wants to take up a different life and its new focus will be on its ‘seed to sale’ tracking platform and a broad range of cultivation, manufacturing, extraction, retail and community outreach activities. As such, ERBB’s cultivation site is back on track. After six weeks of planning and reconfiguring its building in Phoenix, the first permits are in place, and building renovation is being completed. It expects to have it ready to 'veg' in December with the first harvest coming in March. The project is fully financed and the results of having the first harvest in the spring are projected to cover all pre-harvest start-up and other ongoing expenses.ERBB reported the end of its fiscal year, FY16-Q4, ending 6/30 in August. ERBB’s balance sheet for the quarter reflected that the company has $159K in current assets, including $13K in cash, $106K in net receivables and $40K in inventory. Total assets are $2.3mm of which $480K is in LT investments, $1M in PP&E. Total liabilities are $9.7mm coupled with LT debt of $1.4mm.At the present price, ERBB has a market valuation of $2.3 million. As we sprint into the election in the next two weeks ERBB is expected to heat up along with the rest of the sector. It appears ERBB is back on track. With new management in place and a new strategy for success in place, you might consider picking up some cheap shares. We will be updating our subscribers as soon as we know more. For the latest updates on ERBB, sign up below!Disclosure: We have no position in ERBB and have not been compensated for this article.