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Americann Inc (OTCMKTS:ACAN) Is Getting Its Financing In Order

Americann Inc (OTCMKTS:ACAN) Is Getting Its Financing In Order
Written by
Jim Bloom
Published on
September 25, 2017
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In our last review of Americann Inc (OTCMKTS:ACAN), we noted that while the company has grant plans and a viable business model in the legal cannabis industry, financing stood out as an area of concern.In that review, we said that ACAN would need to raise additional capital to shore up its financials so it could continue executing its plans.In today’s piece, we note that ACAN has actually secured a financing deal. We are going to examine this financing deal alongside other recent notable development that we believe would impact the stock favorably.Before we get into that, take a look at ACAN’s share price action. ACAN Daily ChartBusinessIn case you are reading about ACAN for the first time, we have you covered. Here’s a brief background on the company.ACAN was founded in 2010 and it is headquartered in Denver, Colorado – one of the vibrant legal marijuana markets in the US.ACAN operates in the legal marijuana sector, but not the way you have expected. On its own, ACAN does not cultivate, process, distribute or sell cannabis. Instead, the company is a service provider to the legal cannabis industry. It’s focused on the provision of consulting, design, construction and even financing to regulated marijuana operators in the US.ACAN’s develops, owns and provides advanced medical marijuana cultivation and processing facilities across the US.A profile of ACAN is not complete without mentioning that it is a Certified B Corporation – which is to say that the company has been recognized for its commitment to social and environment ethics, transparency and accountability. Further to that, ACAN is the first public cannabis company to attain the Certified B Corporation accreditation.Recent developmentsIf financing was an issue that stood between ACAN and its goals (and shareholders’ dream), the company has begun fixing the problem. On September 7, ACAN announced that it had secured an equity financing commitment to the tune of $10 million from Mountain States Capital, LLC (MSC).While equity financing usually evoke the notion of dilution, there may be little to worry about dilutive effect on ACAN if the financing is going to help the company to achieve its goals faster and maximize shareholder value in the process.ACAN intends to use the bulk of the financing from MSC to develop its flagship the Massachusetts Medical Cannabis Center (MMCC) project. ACAN’s MMCC is a state-of-the-art cannabis cultivation and processing project that is located some 47 miles from Boston.ACAN is developing the MMCC project in phases, so the financing will support the first phase development. When completed, MMCC project will be an enormous 1.0 million square-feet cannabis production infrastructure.Tim Keogh, the CEO of ACAN, said the following about the MMCC project:

"Our MMCC project will become a center of excellence for quality, consistency, and efficiency and play an important role in helping to provide the cannabis infrastructure the Commonwealth requires."

SourceThe first phase of the MMCC project will consist of 30,000 square-feet greenhouse facility, laboratory and research center. ACAN has already secured a leasing deal for the project even before it is completed, suggesting the strong demand for its outstanding cannabis production infrastructure.Coastal Compassion, Inc., one of the few licensed cannabis operators in the Massachusetts, signed an agreement to lease 100% of the first phase of the MMCC project. A little more about ACAN’s agreement with Coastal Compassion is discussed shortly.In addition to developing the MMCC project, ACAN will use a portion of the financing from MSC to expand into other cannabis markets. Some 29 states in the US have legalized marijuana in some forms. Cannabis is also legal in one way or another in Canada, Mexico, Brazil and Australia. Canada is actually on the verge of expanding its cannabis market by legalizing recreational cannabis use.In a November 2016 ballot measure, Massachusetts opened its doors for recreational marijuana. As such, experts estimate that Massachusetts’ legal marijuana market could be worth more than $1.2 billion by 2021.On September 21, ACAN announced that Coastal Compassion, a client and a partner, had received final approval from Massachusetts authorities to cultivate, process and dispense medical cannabis in the state.Coastal Compassion is ACAN’s Preferred Partner in Massachusetts. Under its preferred partner program, ACAN grooms cannabis producers to enable them to succeed in the potentially lucrative but also highly competitive legal cannabis industry. ACAN worked with Coastal Compassion for more than 18 months to design and prepare its Registered Marijuana Dispensary (RMD) located in Fairhaven, MA. Coastal Compassion will initially occupy the Fairhaven RMD facility before it relocates much of its operation to the MMCC project once it is completed.ConclusionAs a service provider to the cannabis industry, ACAN is well-positioned to capitalize on the expanding legal cannabis market.We will be updating our subscribers as soon as we know more. For the latest updates on ACAN, sign up below!Disclosure: We have no position in ACAN and have not been compensated for this article.

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