North American Cannabis Holdings Inc (OTCMKTS:USMJ) has become one of the most talked about names on the iHub message boards. There’s been no shortage of press releases to fuel this chatter and USMJ’s share price. Shares were left for dead for most of last year and have now delivered gains of 1600% for those that took a gamble on USMJ early on. Now that speculative volume has picked up and more traders and investors are discovering USMJ, we here at Insider Financial are taking a closer look to see what’s behind the company.
We first discovered USMJ during our coverage of Puration Inc (OTCMKTS:PURA). Last year, USMJ spun off a cannabis extraction enterprise into Puration Inc. USMJ issued one share of PURA common stock to every USMJ shareholder holding 200 shares of USMJ common stock.
Now the two companies are getting ready to launch EVERx CBD Infused Bottled Water. EVERx is a new sports, fitness and wellness nutritional supplement brand specializing in products infused with cannabidiol (CBD). Puration licensed from USMJ the rights to develop and market a CBD infused water. EVERx CBD Infused Bottled Water is the first EVERx brand commercial launch. An official EVERx CBD Infused Bottled Water product launch event is scheduled to take place at a major industry trade show in March. USMJ CEO Steven Rash said:
“The launch event is going to be huge, and both USMJ and PURA have big roles to play. An amazing ensemble of smart people and terrific organizations are coming together for what will be a tremendous launch event. When we tell you all about the EVERx launch event it will be crystal clear to you how USMJ and PURA fit together and how all the hard work getting to this launch has been worth it. EVERx is a winner and you will see it endorsed by winners at our launch event.”
EVERx will target the growing number of recreational and competitive athletes citing CBD for its benefits in substantially reducing recovery times and increasing cardio output as well as accelerating the healing process from injury and preventing against future injury. EVERx will also target the general consumer that is becoming more aware of the antioxidant and neural- protective research backed benefits of CBD.
USMJ will also be distributing 50 million shares of Alternet Systems Inc (OTCMKTS:ALYI) as a dividend to USMJ shareholders. The present market value of these shares is $1.325 million. ALYI is a fully reporting public company in the business of developing financial systems software. On December 20, 2016, USMJ and ALYI announced a share exchange agreement between the two companies structured to launch a cannabis retail payment system to be offered by ALYI.
USMJ also has its AmeriCanna Cafe business, which generated $515k in revenues last year. The AmeriCanna Café sells custom blended hemp infused coffee, cold pressed juices and smoothies in addition to carrying raw hemp seeds and other hemp infused foods. North American Cannabis Holdings is now launching a campaign to franchise and license the AmeriCanna Cafe as a cannabis themed, fast casual concept to targeted multi-brand quick-serve restaurant operators.
In December, USMJ said that it anticipates a 50% increase in next quarter sales compared to the current quarter. With approximately $500,000 in annual sales and averaging $125,000 in quarterly sales, the Company anticipates realizing an additional $60,000 in sales from January 1 through March 31.
Currently trading with a market cap of $19 million, USMJ reported $1 million in total assets and $2.6 million in total liabilities in its latest quarterly financials. We expect a portion of this debt to be converted into common shares, diluting existing shareholders. At the end of last year, 13 billion shares were authorized and that number just got raised to 15.5 billion. If USMJ can keep up the news flow, it will offset this dilution. If not, expect selling pressure to take hold as shareholders get restless. Overall, USMJ is certainly one name to watch.
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Disclosure: We have no position in USMJ and have not been compensated for this article.