In our last piece on American Cannabis Company Inc (OTCMKTS:AMMJ), available here for anyone who didn’t get to read it, we concluded that the company had chosen to focus on client acquisitions as they worked towards growing their client base long into the future. According to the article, the company’s stock price then was reflective of the portfolio of successful clients they had amassed.Well, this finally seems to have paid off for them.News concerning one of their clients having showed intent to develop their own base in Canada in a bid to tap into the Canadian recreational cannabis market is bound to bring jubilation to the management and shareholders of AMMJ. Moreover, their distribution agreement with Earth Alive, discussed later in detail, has further accentuated the positives associated with their strong portfolio.The above said, this would have little meaning if it didn’t positively influence the company’s share price, which seems to be the case. Their share price has been slowly declining in the recent past, closing at $0.614, down from $1.25 where it was trading at in mid-September when these announcements were made: AMMJ Daily ChartSuch movements coupled with a significant reduction in trading volumes would normally speak to much lower belief in the company’s future and prospects.However, we are of a different view; one that states that the entity’s valuation by the market doesn’t fully reflect their true price and that the prices are bound to go up in the future courtesy of congruence between company performance and the market’s expectations. This view will be outlined later in this piece as we dive deeper into the company, its past performance and future prospects.The Route they took and their expected destinationAMMJ was founded in September 2001 as Naturewell Inc in Denver, Colorado. Their objectives entailed developing and marketing clinical diagnostic products using immunology and molecular biological technology.However, the company was later acquired fully in March 2013 by Brazil Interactive Media Inc, a move which was further reversed in May 2014 when they (AMMJ) took part in a merger agreement with American Cannabis Consulting and disposed all the shares they had obtained through the previous acquisition. Their ticker was finally changed to AMMJ in October 2014.Since then, they chose to specialize in the cannabis industry with an incline to ensuring that players within the industry actualize their full potential. Based on their business model, their three revenue streams included: advisory and consulting, manufacture of proprietary industry solutions and sale of products and managing group partnerships, all which were fully dependent on how large they could grow their client base, especially the consulting arm of the business.Therefore, their first move: ensuring they amass a large client base as articulated in the referenced article, one which has finally paid off.A recent press release from the company detailed that one of their active New Brunswick clients had opted to venture into the recreational cannabis segment in Canada.The news, which sent the share price of AMMJ soaring, followed the successful submission of application materials and supporting documents for the purpose of acquiring business licenses to operate within the newly founded medical cannabis program that would be regulated by the Canadian government. This would have a significant revenue implication for AMMJ into the future.The AMMJ CEO, Terry Buffalo, hailed the move by their client as follows:
"We are very pleased to be working with such a determined and dedicated client who wants to see their businesses truly succeed. Canada is full of business opportunity for our firm, and we cannot be happier to be providing services to what will soon be a top-tier producer in the space."
Source:This was, however, not the last of the company’s positive releases with the second one having a rather striking name to it.The ‘Dr. Marijane’ agreementMore recently, AMMJ partnered with Earth Alive, a leading Canadian clean-tech company that develops and manufactures state-of-the-art microbial technology-based products, to allow them distribute a new product to the US market dubbed Dr. Marijane.Dr. Marijane is a certified organic root probiotic that promotes increased vegetative growth, improves the bioavailability of fertilizer programs, and sustains healthy development and structuring of plant roots. Its implementation will lead to the increase in yields in the cannabis market throughout the state of Colorado.Following the successful registration of the product packaging in Colorado, AMMJ will act as its lead distributors while also offering consultancy services in the process: two birds with one stone.The news above which was dubbed by the Earth Alive CEO as “…an endorsement of their product's proven efficacy,” is expected to bring even more smiles in the faces of the shareholders of AMMJ.Source:Such success, however, doesn’t come from nowhere, it has to be backed by some strong bucks and financial management, both which AMMJ seems to have backing them up.The $31.3 million company has not only mastered the art of the deal but also maintained its foothold on the art of managing their finances.Over the period between the first and second quarter of 2017, the company’s revenues went up by over 54.3% to close the quarter at $952,000 up from $617,000. This was belittled by their increase in net income which closed at $329,000 up from a loss of $206,000. This was the first quarter since the beginning of 2106 that they made profits, to the excitement of their shareholders.Their working capital over 2Q2017 stood at a whopping $1.7 million, enough to finance their activities and ventures throughout the next period.Finally, their book values closed at over $1.7 million, up from $1.2 million in the previous quarter.Such jumps have led to the market’s reaction and have also been the reason behind the high valuation accorded to the company. With such strong fundamentals coupled with their well-articulated and implemented business model, the company’s limit to growth is far from existent.ConclusionAMMJ is not only poised for growth but also growing at a rapid rate. Investors would benefit significantly from the value addition they are almost certain to reap from investing in them.We will be updating our subscribers as soon as we know more. For the latest updates on AMMJ, sign up below!Disclosure: We have no position in AMMJ and have not been compensated for this article.
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