On July 28, 2017 Massachusetts Governor Charlie Baker signed the Adult Use Cannabis Bill. This makes Massachusetts the first state in the eastern U.S. to legalize the adult use of marijuana. The new law is the result of the successful ballot measure approved by Massachusetts voters in November of 2016. Massachusetts introduced a voter approved medical cannabis program in 2014 that has resulted in over 40,000 registered patient. This program is expected to generate over $100 million in sales in 2017. Industry experts believe with the addition of adult use, the Massachusetts cannabis market will expand to over $1.6 billion by 2021. Americann Inc (OTCMKTS:ACAN) is very well positioned to capitalize on the newly expanded cannabis market in the State of Massachusetts.
AmeriCann’s goal is to serve medical cannabis patients by providing state of the art facilities designed and built to produce high quality, consistent medicine that is cultivated and processed in a controlled, secure, and sustainable environment. The Company’s belief in sustainable cultivation and processing practices — and its responsibility towards the community and environment — is driven by the core belief that every patient should have access to safe, regulated medical cannabis. AmeriCann develops world-class facilities for the production of medical cannabis. It has a multi-market growth strategy with a current portfolio of over 1,000,000 square feet of sustainable cannabis production infrastructure in development. The Company is a fully reporting, publicly listed company with the US stock symbol: ACAN on the OTCQX marketplace. AmeriCann supports local businesses that serve cannabis patients in their communities. AmeriCann does not cultivate, process, distribute or sell cannabis.
AmeriCann’s flagship project, the Massachusetts Medical Cannabis Center (“MMCC”), is 47 miles from Boston in the midst of the rapidly growing Massachusetts medical cannabis market. The MMCC project is approved for 1 million square feet, which will be developed in phases and is expected to be one of the most technologically advanced cultivation facilities in the nation. AmeriCann CEO Tim Keogh commented:
“We believe Massachusetts will be a dynamic developing cannabis market for many years, and that our MMCC project will become a center of excellence for quality, consistency and efficiency and play an important part in helping to provide the cannabis infrastructure the Commonwealth will require. Our Company made a commitment in 2014 to make a major investment in the future of the Massachusetts cannabis market and it appears to have been a very good decision.”
On June 5, 2017 AmeriCann Inc announced that it completed a very successful three-year partnership with a licensed Colorado cannabis producer that has resulted in exceptional returns to the company. In 2014, AmeriCann contributed $1,000,000 in secured funding for the final design and construction of a 15,000 square foot state-of-art cultivation and processing facility in Denver, CO. With the final payment made in May of 2017, AmeriCann received total distributions over the term of the agreement of $1,457,000 from consulting fees, interest and principal repayment. The average annual returns exceeded 15% over the 3 years. AmeriCann CEO Tim Keogh stated:
“We are extremely pleased with our partnership with 4900 Jackson, LLC. The financial returns were excellent for our shareholders. As an early-mover in the Colorado market our team gained invaluable first-hand knowledge with innovative cultivation systems and the market dynamics from the most mature regulated market in the nation.”
Since our last review of ACAN on June 5, 2017, the stock has continued its downward trend. It has recently made a strong bounce from a local low of $1.11 on August 2nd, to a high 5-days later of $2.23 on much higher than average volume. The stock has currently pulled back slightly and is currently trading at $1.85. The Company’s current market capitalization stands at $36.17 million, on 18.08 million shares outstanding as of August 9, 2017.
The only area of concern for AmeriCann Inc is the financial front. The latest quarterly financial reports for the period ending March 31, 2017 indicate very little to no revenues, and operating at a Net Loss seems to be the norm for the Company. The balance sheet is on the positive side, but the Company’s cash position is relatively weak, considering all the “grand” plans that the Company has. AmeriCann will need to shore up its financials in order to execute its plan and better appeal to investors for the long run. We’ll put ACAN in the “Watch Closely” column and monitor its progress.
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Image courtesy of macrocannabis via Flickr
Disclosure: We have no position in ACAN and have not been compensated for this article.