American Green Cannabis Stock
American Green, Inc. (ERBB) is a cultivator and distributor of medical cannabis. They specializes in manufacturing, extraction, wholesale, and retail. They also offer inventory tracking services for other cultivators. The company was founded in November 1998 and is headquartered in Phoenix, AZ.
Is ERBB a strong BUY and HOLD?
American Green Cannabis Stock Fundamental Analysis
Company Profile
HQ: Phoenix, AZ, USA
Founded: 1998
Symbol: ERBB (OTC)
Focus: Weak
American Green is a small company our of Phoenix, Arizona where they have a cultivation facility. They are also involved in kiosks for dispensing regulated products and technology initiatives like app development for hemp and cannabis companies.
Size: Weak
Market Cap: $10,780
Enterprise Value: $25,000
Markets: Weak
Primary: AZ
Secondary: USA
Operations: Neutral
Cultivation: Built and licensed a grow for Natural Herbal Remedies in 2018. They receive rental income from this deal still but the lease on the 12,000 sq ft facility ends this month.
Current production: None. They have announced they will try to scale up their cultivation business by 300% in the coming year. This is partly driven by their lease being up this month.
Distribution:
Direct sales: They do have an e-commerce store as well as sell on Amazon. The American Green Machine vending machines business arm is growing.
Store networks: None
Integration/Diversification:
Vertically integrated: No
Horizontally diversified: In progress, across mobile apps, vending machines, CBD edibles, and branded products.
Financials: Weak
Revenue (TTM): $48,630
Shares Outstanding (diluted): 29.75 Billion, yes Billion
Return on Equity: NA
Management: Weak
Chairman: David Gwyther
COO: Pat Carrigan
Executive VP: Sean Loomer
Director: Colleen Manley
Branding: Neutral
American Green has branded their small AZ grow as Sweet Virginia. They have a CBD/Melatonin hybrid product called ZZZZZZ for you guessed it, a sleep aid. They sell CBD products on their e-commerce site branded as the American Green CBD Store. They also have health supplements under the brand OneBode.
Valuation: Weak
Current share price: $0.002
Price to Sales: NA
52 week low/high: $0.0002-$0.0412
EV/EBITDA: NA
Price/Book: NA
Financing: Weak
They had $858k for revenue in the second half of 2019, mostly for mgmt fees through their leased grow. For the same period, this left them with $43,865 cash in hand.
ERBB Technical Analysis
Should I buy ERBB Cannabis Stock?
Follow Stephen Goldman as he evaluates American Green, Inc. (ERBB) using the Aroon, MACD, and KST (know sure thing) to evaluate if ERBB is a strong buy, or a strong pass. Trading is easy.
Remember sound cannabis stock trading strategies include both Fundamental Analysis and Technical Analysis.
Bottom Line: Is American Green Cannabis Stock a Buy?
Recommendation: Weak
American Green, Inc. is a management company with cultivations, app development, e-commerce, and CBD kiosk aspirations. They are not yet successful in any of these ventures. They do have one of the most interesting back stories ever though.
They started in 1998 as an entertainment and communications company, even hosting concerts in Asia. In 2016 they pivoted to cannabis and hemp. But in 2018, they purchased a town called Nipton, California, located in San Bernardino county. Their subsidiary CannAwake then purchased all the real estate in the town for 160,000 shares of preferred stock. They plan to turn the town into a hemp haven with a CBD extraction facility, produce CBD-infused drinking water, and CBD edibles. These plans are stalling but we give them points for creativity.
They have had some success in their leased AZ grow, Sweet Virginia, with sales picking up and maybe approaching $1 million per year. They also recently announced orders for 20 CBD vending machines for EZ Weed. Sales on their online CBD store have also picked up in 2020 with revenue up 31% higher than in 2019. This is the good news.
The bad news is that this revenue is dwarfed by expenses, above $4 million. This is one of those companies that pays all debts with stock and they have plenty to dole out with 29.7 billion shares outstanding of 60 billion shares authorized (50%). They did do a 500 to 1 reverse split in Sept. 2019.
With no revenue, no cash on hand, and confusing paths to revenue to come, we are forced to rate them as weak no matter how creative they are. If you are looking for more productive companies, check out our Featured Companies Page for many other winners in the cannabis and hemp industry.
