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Best of Phoenix AFare
Apparently American Green is sponsoring an food and beverage event in Phoenix on October 4. I'd love to check it out but there's this thing going down at Dodgers stadium this weekend.....GO BLUE, GO ERBB!
http://microapp.phoenixnewtimes.com/afare/2014/sponsors.php
2nd Colorado Boom on the Way
http://news.yahoo.com/colorados-pot-market-getting-competition-201414075--finance.html
The market is now open to new business. Previously only shops existing before 2012 were able to open a recreational MJ business but now the market is open for new operations. Also the 70/30 rule is done where the shops had to produce 70% of what they sold.
In other words the floodgates have been opened. In 9 months since prohibition ended in Colorado, the "experiment" has been an undeniable economic and social success!
Of course this translates into many, many more potential locations for Zazzz. Also new grow operations may be interested in Jurassic Water and OGTea.
This could dwarf the Jan 1 inaugural end to prohibition.
Fundamental or Technical Bounce? You Make the Call
Technical indicators are an interesting graphic representation of price action, volume and sentiment but Clay gives a very basic chart "reading" devoid of many significant indicators like Bollinger Bands, OBV, MACD to name a few. His chart reading is spot on and most important, highly objective devoid of emotional sentiment. The 50 and 200 day SMA are arguably the most commonly used indicators and therefore the most reliable but chart reading is mostly for day trading or swing trading.
That said everyone should know the basics of technical analysis and today, ERBB made strong close over the 50 day SMA. The two hammers from the two preceding trading days were a buy signal for chart traders. There will be resistance around the .02 level as profit takers from the low penny range can get out with a 50-70% payday. Today Level 2 was pretty stacked with decent volume asks in the .0175-.019 range so clearing that volume will take some heavy buying. Today's volume was decent but nothing out of the ordinary. The selling today was quite thin giving which helped the rally.
http://stockcharts.com/h-sc/ui?s=ERBB&p=D&yr=0&mn=4&dy=0&id=p84514984508
But here's what the technicals don't tell you. American Green's president made some bold operational claims at the Cannawebcast yesterday (Sept 30). Estimates of 500 machines by April 2015, as Shearin stated as an achievable goal, is compelling for a fundamental "investor" (as in someone who is holding for an indeterminate time frame). Shearin also talked about aggressively protecting the vending IP and expressed a positive outlook on not too distant earnings reports. To add fuel to yesterday's fundamental bonfire, American Green announced today the hiring of in-house counsel, Jerry Chesler, an attorney who has connections to a large network of cannabis industry contacts. By all means American Green appears hard at work developing an industry leading company and brand.
In the end, technical and fundamental indicators are like the nature versus nurture debate. Both have a role in how ERBB performs, and all stocks because some participants are buying or selling based for both technical or fundamental reasons. In my opinion, today was an entry point for many traders who expect this to pop over .02 based on the bullish hammers on the chart from Monday and Tuesday. Also the next 3 months are cyclically the best time to buy MJ stocks. A 4 year chart shows the last quarter of the year is the low in most MJ equities and the first quarter of the year is when they pop. Swing traders will be setting up those positions over the next three months. I think some gamblers may be placing bets on the upcoming November elections.
Finally, I also think people are realizing ERBB is becoming a viable company. The progress since April is quite stunning, even more since a year ago this time. Two Zazzz machines are operating with signed leases for about a dozen more to be placed in October. The company has patented IP for a very broadly defined application for biometric authorization of machines that dispense controlled substances. Dispensary management services with the help of successful dispensary owners like Greg Honan....cultivation equipment and nutrients.....a brick and mortar retail hydro shop in the heart of the Emerald Triangle....I almost wonder if American Green has secured financing from venture capital to assist with this aggressive expansion
Here the issue, how much is this really worth? This market is so new. Sure hydro shops have been around but they have never been able to operate with specific purpose of catering to the MJ clients. Who knows if a new agricultural revolution won't breakout with home gardens expanding to the mainstream? OGTea...smaller Jurassic Units for personal use.....? And there's the Zazzz machines? Who knows about that potential? I've done some number crunching and with 500 machines by 2015, I come up with estimates between $5million to $100million in revenue.
ERBB has numerous obstacles to overcome, least of all being the legalization of MJ. The share structure is bloated but Shearin has stated a reverse split is not on the table for now. Financing from traditional means is unavailable so access to capital is stunted, leading to share grants to raise funds which causes some dilution and in turn those high volume shareholders will be quick to sell during drops in order to protect profits. ERBB also trades in the Pink Sheets so this is a gamble.
I'm definitely long ERBB despite the concerns. I don't trade or invest in the pinks with the exception of MJ stocks, been doing it for about 4 years now and have done well. American Green and ERBB have matured into a strong play. Absent serious fundamental issues, I see ERBB hitting .20 and possibly beyond a $1billion mark by end of year 2015, maybe sooner.
Great Idea!
Having exclusivity deals with established brands could provide an excellent co-marketing opportunity and may boost sales via Zazzz, therefore leading to greater revenues from Zazzz machine transaction fees.
I cannot believe 4 shares were sold a few minutes ago. Seriously? That's less than a nickel! What kind of clowns are at work here.
Have a great weekend all
September 30 Cannabis Webcast with American Green
http://cannawebcast.com
Should be good for publicity. Since I'm pretty thorough in my coverage of American Green, I don't expect there will be any unforeseen announcements but Stephen will be speaking about AG and AG is a "platinum" sponsor of the event. Events like these will hopefully start to get the attention of institutions and funds.
Sign up as an attendee, help AG, learn stuff....
Taking Back the 50SMA
Yesterday's drop was an anomaly and put ERBB's pps under the bottom Bollinger Band. I'm not calling for a breakout just yet because today just seems like a return the the 50 day Simple Moving Average.
It looks like I won't be getting filled at my .015 and below. I did get a fill at .0149 yesterday.
September 30, Investor Webcast for American Green
www.cannawebcast.com
From today's PR:
"Greater detail on the company plans will be available on Tuesday, September 30 2014 as part of the Cannabis Investor Webcast (www.cannawebcast.com). We invite all our current and prospective shareholders to familiarize themselves with the site and plan to join us for a live presentation to be held at 3PM Eastern."
Let's hope that newscast addresses some of your concerns Vman.
Gee I've Heard Others Say Such Things
I remember December last year when the MJ industry's "premiere" analyst told me another stock was a dud and he said that Jan 1, 2014 legalization in Colorado would be a non-event. Somehow that person is still an industry "player" but more important, the stock I held wasn't a "dud" at all because during the "non-event" I sold it for 350% gains.
And in November 2013 I was pretty sure ERBB was a dud. However after selling a part of my position for over 5000% gains this March, I'm of a different mind. Back the there still was no Zazzz machine. No patent ownership. No Jurassic Water. No Green Universe. No Herbal Elements deal. No Truth Lighting. No legitimate website. There was barely even American Green. Today, there is so much unappreciated value in each of those entities and together they are a complimentary ecosystem for generating revenue.
Let me also note that Shearin is a crafty business man who has been ahead of the curve in previous ventures. His foray into the cannabis space has lead his to ERBB and he has brought a lot to the table. The media exposure for Zazzz was orchestrated by Shearin and you can expect more to come.
Last year I bought the ERBB lows in November with reckless abandon. I basically gambled on Colorado's legalization and it paid off in spades. My hope for this year is that my holdings become the "investments" I think the can be. With all the progress American Green has made in just 10 months, I think ERBB is one of the MJ equities that has the most potential to be a legitimate investment.
I'm not buying like I did last year but I'm putting some of the profits to work.
I'll buy 100k shares of ERBB down to .01 meaning I got 100k shares @ .015 today and have orders in for 100k @ .014, .013, .012, .011.
If ERBB hits .01 I'll put in an order for 500k shares and 1m shares at .005 but I doubt those orders get filled because the buying pressure and short covering will be pretty strong around a penny.
MJ Equities Annual Cycle
I cannot stress enough the cycle that is the publicly traded MJ markets. Check the charts, it's been the same deal 3 years in a row culminating with an explosive 2014.
The chart below shows October through December being the pps lows and February through March being the highs. I'm not saying 2015 will be as drastic as 2014 but the industry is chugging ahead and ERBB is shaping up to be a real player with irons in every fire. Weak hands have been shaken out and the market has been cleaned up by the SEC. With the exception of a few leeches masquerading as cannabis equity analysts and experts, the industry is stronger than ever..
http://stockcharts.com/h-sc/ui?s=ERBB&p=D&yr=3&mn=0&dy=0&id=p08711851205
And Now I'm a Buyer
I said under .015 is where I will add.
Started with 100k at .015
I'll pick up 100k on each tick .014, .013, .012, .011
And 500k at .01
Below .01 I'll wait for .005 and go for 1m
I'd be surprised if ERBB goes under a penny but it's not outside the realm of possibility. My low estimate would be around .0125 before some heavy buying pressure and short covering would take place.
Aside from truly earth shattering news, I don't think PRs are going to move ERBB.
Here are some factors that I think would move ERBB:
-Earth shattering news, a 10 new Zazzz machine placements or the like with other AG entities
-Federal rescheduling of MJ, I have heard rumors this could happen before November but I find that unlikely since no politician wants to stick their neck out during the campaign season.
-Full scale legalization, probably not until 2016 or beyond. This year California even failed to get rec legalization in the ballot which is a disappointment. It seems the medical MJ community in CA is the biggest opponent of recreational legalization because it would erode their monopoly on the MJ market
-November elections, there will undoubtedly be discussion about cannabis considering over a dozen states have some form of legalization on their ballots.
-A major financial institution stepping up to the plate and offering capital to an MJ organization
-A profitable earnings statement from a penny MJ company
-Unknown, this is a truly nascent industry
The legal cannabis market is barely a decade old since CA passed SB420 and allowed for the retail dispensing of marijuana. Overall, the last decade has been a resounding success both in CA and elsewhere. Colorado and Washington's legalization efforts have been met with joy and none of the wild assertions of violence, lethargy and social degradation have come forth. While the cannabis trade is far from new, these legal methods of cultivation and distribution are just coming to fruition. With that comes a new understanding of cannabis and how we can benefit medically, personally and as a society. The changes we have seen are from those willing to fight for what they believe but that fight is over. Victory is here and hopefully we can collect the spoils.
ERBB is Drastically Undervalued
In 2003 when I first bought A@PL, I thought the company was undervalued. Same with QC0M in 1996. I knew each company had a lot to offer yet the share price lagged for years before finally being realized. Never in my wildest valuations did I expect to see the gains and returns when the markets finally understood the business of the aforementioned companies but that's the essence of investing; you see something you like, something you identify with, something you find value in and you commit money to the company. Investing is about looking beyond what is known towards what could be.
Cautious investors are waiting because American Green has yet to show substantial revenue and proof of concept with Zazzz, similar to iTunes and the iPod in 2003 when the market (and message board bashers) called them a "fad". ERBB is also traded in the Pink Sheets so it isn't on the radar of 95% of the country and about 99% of the world. Even in the cannabis industry (ie dispensaries, cannabis users), American Green and the public equity markets for cannabis are little known. Zazzz has a tiny, newborn footprint and while some may know of the "pot vending machines" from various news reports, there is a surprising lack of awareness. And the traditional financial world has yet to step into the cannabis sector.
Basically that leaves the following players who are focused on ERBB:
TRADERS
keep in mind these are penny players. Yes, some may have "decent" capital and may even make the occasionally respectable gains, but penny players are not the most sophisticated. Few brokers let traders short penny stocks and there are no derivatives markets in penny stocks so the vehicles for trading penny stock are far less intricate.
INVESTORS
I fall into this class. I do take profits in penny stocks quicker than I would in big board and Nas stocks but I consider myself an investor in the cannabis sector considering it's the only penny stocks I play. Obviously, the investors in the penny MJ equities are "growth" oriented as there is little "value" in these stocks since most are yet to be profitable but I expect that to change over the next few years.
So where do I get off saying ERBB is undervalued? As mentioned above, the lack of attention and understanding of American Green is the reason for ERBB being undervalued. It may seem crazy to call a $50m company with little revenue "undervalued" but there are numerous ways American Green is developing the business in an effort to create value for ERBB. Just like Apple, American Green is creating an "ecosystem" by vertically integrating their business. But enough of the wishy washy, here is the hard reasoning behind why I think ERBB is undervalued.
Zazzz
This could seriously be a $100m revenue draw in just a few years. As the saying goes, "the ones who got rich in the Gold Rush were the ones selling the picks and shovels." The Zazzz machine is exactly that concept. I'd go so far as to say, Zazzz is like a credit card taking small scalps of each transaction. With over half the states legalizing cannabis in some form, Zazzz could draw revenue from 1000s of transactions per day. With 1000 machines placed charging $2/transaction at just 20 transactions per day per machine, American Green could pull in $12m annually. And those are pretty lowball transaction numbers which do not include American Greens own products that are guaranteed space in the Zazzz machines.
But the real kicker of Zazzz are the Tomassi patents. We won't know the exact impact until the first lawsuit American Green files to protect the IP but the patents alone could be worth a fortune and in itself could sustain American Green as a patent troll. I'm not entirely sure the broadness of the IP but it would seem that having a patent for vending controlled substances via biometric identity devices could expand far beyond the cannabis markets. If this is accurate, Zazzz machines could be placed in drug stores to dole out medication which would blow the doors of the previous revenue estimates in the preceding paragraph.
Cultivation
There is a lot of money in growing equipment. Trust me, in my younger business endeavors, I spent a small fortune on lights, ballasts, environmental controls, nutrients, growing mediums.....American Green's acquisition of Green Universe is just the start. Just a few months back another MJ company's stock soared on the prospect of its position in this sector of the MJ industry. Green Universe is located in the heart of California's cannabis country, the Emerald Triangle. This area is responsible for over 50% of the cannabis in America and grows so much cannabis that MJ is actually CA's number on cash crop.
To get back to the "ecosystem" American Green is developing for their products, the Green Universe shop may be a perfect place to sell American Green's OGTea, Jurassic Water and Truth Lighting Systems. OGTea is already pulling in substantial revenues prior to American Green acquiring them so it will be interesting to see how new distribution outlets boost sales. And as of today, American Green has entered a partnership with Herbal Elements which is yet another brick and mortar outlet for selling the company's hardware. I've personally met Greg Honan of Herbal Elements and I think he is a spectacular addition to the team. He knows cannabis, he know Colorado and equally as important, he knows business. Greg wants Zazzz and ERBB to succeed for personal and professional reasons.
Distribution
I already touched on distribution briefly with the Zazzz machine but it's important to reiterate the points above. Through the Zazzz machines, American Green has a way to profit from the retail sale of cannabis WITHOUT having to draw revenue directly from selling products. This is akin to being the maker of the heavy duty zipper bags used to hold MJ in Colorado or the canister maker for California's MJ sales; these companies indirectly benefit from the retail selling of cannabis.
And now, as of today's PR, American Green has stepped squarely into the dispensary ring with the Herbal Elements partnership. Who knows what that brings but from the sound of it, American Green could immediately see revenue.
Miscellaneous
American Green is developing their brand and with that comes the digital space. Greenzine is a great resource and I now visit the site frequently for industry info. The more clicks that come from the site linking to the Huff Post and other sites, the more revenues can be pulled in from Greenzine ads.
I'll say it again ERBB is drastically undervalued.
Zazzz and the Tomassi patents alone could be worth $100-500m.
OGTea, Truth Lighting and Jurassic Water Systems could be worth $10m combined but if they start gaining popularity, each entity could be worth $10m a piece.
In a time when companies like Face8ook trade at 170 earnings and @MZN trade at 2000, there is absolutely zero reasoning why ERBB should be trading so low. In the not too distant future this company will be drawing big revenues.
I'm pretty comfortable buying at .015 and below. I already have a sizeable position but added a while back in the .013 range. REMEMBER October is typically a "spooky" time for the markets. Also keep in mind Oct-Dec has typically been the best time to buy MJ equities since Q4 tends to be the low and Q1 is the highs as it has been like that for the past 3 years. I'm not expecting the same boost in Q1 2015 as we had this year, but November elections could be a booster.
Cycle or not, either way ERBB could do it by itself as there are so many facets to American Green that could be significant revenue generators. I look forward to reading this post in a few years and hoper my speculation proves me right.
RUH ROH, Rex Chapman AG Spokesperson in Trouble
Not good at all. Rex allegedly stole $14k of Apple goods and hawked them at a pawn shop in Phoenix. Check the comments on Yahoo, relating to "drug addiction."
http://sports.yahoo.com/blogs/nba-ball-dont-lie/rex-chapman-arrested-for-allegedly-stealing--14-000-in-merchandise-from-arizona-apple-store-005652631.html
Per this PR, Rex was working with American Green.
ih.advfn.com/p.php?pid=nmona&article=63525745
Hit the 50SMA but to Hit .50.....
Closing the week above the 50SMA would have been nice but the selling pressure seems too strong. Lots of weak hands, flippers and even some warrant selling is to blame but the daily volumes were pretty light so there's little conviction in either side.
For longs, if you are a believer, these prices may be good for small entries although I admittedly held out for below .015 before buying a few weeks ago and would recommend the same unless you're just itching to get in. Over the past few years, Oct-Dec were the best times to buy MJ equities as they seem to bottom year end and top in the start if the new year.
For shorts, not much room on the downside to play with. I'd expect to see a lot of buying pressure if ERBB manages to slip below .01 which will make for a measly half penny return if you time the trades right. It seems like a lot of risk for little reward especially when the slightest company or political announcement could tear the roof off the industry.
Now to address the recent UptickNewswire article and the price target of .50, yes 2 shiny quarters. I'm not familiar with Uptick so I don't put much credence on the "who" that was behind the story. With saying that though, I'd like to add I don't pay much attention to the WSJ, Barron's or other publications when it comes to Fortune 500 companies. Also Uptick is not JPM or GS or Blackstone so I'm not thinking the organization is much of market mover. The information in the article was just a recap of recent American Green news followed by a pretty outrageous price target of .50
Don't get all fired up because I called it outrageous because it is. For now. But the article also provided a time frame for that price target which was a year. Maybe if next month rollout of half a dozen new machines is executed smoothly, followed by more Zazzz placements, ERBB will be on its way to .50
Oddly enough, in March 2014 during the Cannaboom I had a target on ERBB for .22 and the fat finger trade that paints the false 52week hi at .216 is ironically close to that number. Let's get to .20 before we even consider .50.....(insert crawling/walking cliche).
It's Garbage Because of This:
1. Customer base? Really? I have visited not less than 20 "head shops" over the past year, sometimes to do DD, other times to pick up smoking/vaping items. Not one single shop owner or employee had ever heard of VAPE or Hive and this is in Los Angeles where the Company is based. Not only was VAPE/Hive off the radar, whenever I saw similar domeless pieces and pins, the shop owners reactions were equally as discouraging. Most said ceramics were unpopular and titanium was the preferred material. When I asked one shop owner if he knew the brand/maker of his domeless pieces, he said he didn't but said random people came Ito the shop all the time to sell him all sort of similar stuff. Oversaturated much? BUT where all this blabber is leading is....if shop owners don't have a clue or much less care about VAPE/Hive products, where do you get the idea that there is a "customer base" demanding the products? I'm pretty well entrenched in the California cannabis scene having been a medical patient since 2003 when sb420 allowed for retail dispensaries and NOT ONCE have I seen, heard or much less used anything from VAPE/Hive. Cloud Pens, G-Pens, O.Pen Vape Cartridges are everywhere, but VAPE/Hive is nowhere
2. Growing sales? Uh, growing where? The latest earnings reports didn't show sales "growing", it showed the very first "sales" to date and it sure wasn't anything spectacular. The only thing growing for certain is the debt load.
3. Growing distributors? Ha! Look, if VAPE/Hive is a total no show in SoCal (despite their claims on the website) then I doubt they are "growing" elsewhere. To boot, there are really only about 5 states where MJ concentrates like wax and oil are readily available and those are the only MJ products that can be used with VAPE products.
4. New markets? Those markets are oversaturated with paraphernalia. Vapes products are crappy little add ons that most people don't really care to use. The dome pieces are confusing, far less straight forward than a G-Pen where you push a button, it heats up and vapor is released.
Maybe I'm no expert but Malvern might remember me from when I called VAPE to hit 1.25 back when it was trading at 8. Unfortunately I've had to undergo some changes since then but I was 100% correct in my call as I am in my statements above. I also called Brochstein a fraud about 1.5 years ago when he first discovered the MJ sector and I was right about that too. Like it or not, I'm right. VAPE is garbage
Bow Wow Wow Yippee Yo Yippie Yay
Vape's earning stunk because the CEO Kyle Tracey is a completely arrogant fool. Additionally the company's products are cheap junk imported from China and slapped with hogwash write ups on Hive's website. And customer base? Puhleeeze. Don't make me laugh. There is absolutely zero customer base. Nobody knows what Hive is much less is there a real demand for domeless pieces and pins. Unfortunately with the little demand there is for such pieces, nobody uses ceramic, favoring titanium. And glass? Again proof that Kyle is an idiot because if there is one material people care less about than ceramics, ITS GLASS!
And the new VAPE Holdings website is a joke. That wrote up on Kyle is cute but total BS. He was not instrumental at PHOT ad the only smart thing he did there was bail before they got busted. As for his high profile connections with famous people, why no endorsements? Why not get someone high profile just as Cloud and GPen have done?
2 words: Brochstein Pick
Everything he touches turns to poop.
VAPE is a dog with fleas. Unfortunately I am a poo bagholder for that dog. I can happily admit that because after all these years if being a market player, VAPE is one of the few times I have been made a bagholder. My CB on 10k shares is just below where VAPE is trading today $1.33
I so want to dump but I'll wait until Q1 next year since that seems to bee the boom time for MJ equities as it has been over the past 3 years.
I'm Not Gonna Pick Horses But
As a major ERBB stakeholder, I think American Green has a shot at greatness (enough disclosure for everyone?). Sure GW is the college grad on this bunch of junior college all stars, but of all the fly by night MJ operations, ERBB has several unique approaches to the sector.
American Green sells picks and shovels. While the Company is developing actual agricultural interests, their main focus is the auxiliary products and services involved in the cultivation and distribution of MJ. The Zazzz machine draws transaction fees and represents an enormous, nationwide (dare I say worldwide) opportunity to takes small pieces of each MJ purchase, potentially adding up to hundreds of millions in annual revenue. The lighting and water systems are a foray into the cultivation market and these products are complimented by a physical hydro/gardening store American Green purchased in the heart of California's largest cannabis community, The Green/Emerald Triangle. The company is working hard to develop a strong online and social media presence.
ERBB is not a company claiming to open up dispensaries in 2 years when the CEOs Colorado residency is approved or a cheap Chinese eVaporcig importer slapping a fancy brand on a product. American Green has real products, real people, real leadership and real direction. Hopefully this translates into real profits for shareholders.
I'm not sure what to expect of Q1 2015. Last year I had a strong feeling about the Colorado Event but this year I'm not sure. By now, there is plenty of interest in this market. Four years ago when I got into public MJ equites, it was small minnows swimming around. Last year the fish got a little bigger with organized penny players sniffing around. Eventually a few tuna dropped by like ArcView, High Times Fund and other $100m players claiming to commit capital. Who knows what we see. I've heard whispers about rescheduling MJ and November elections could play a role, although somehow 2012's historic vote on Amendment 64 (and WA's rec. laws) didn't do much for the MJ shares prices in Q3.
I'm pretty excited about the market and patience is key here. My strategy has been buy, hold, sell to recoup investments/take profits, and ride the freebies. Although at this point I've made my profits and trimmed my positions to where I am pretty happy just sitting on it for a while.
Good luck everyone. Let's support the small equites before the big corps take this industry over and turn it into a mega-UberCorp like a Agri-Pharma-Liquor hybrid monster company.
Nevada Could Be a Zazzz Megaopolis
The self-service machine is huge in Las Vegas. Many of the venues are already 21 and over. Zazzz machines could be placed en masse across the state or erbb could maybe even license the age-verified patent to companies.
Great Article, $10b in 14 States
Doing a little simple math, if cannabis sales total $10b in 14 states, then by the time 50 states have legalized the sales could be as high as $35b. Massive!
Also consider that those figures ONLY include sales. What is left out are the residual revenues from selling cultivation equipment/services, monies generated from renting/purchasing property for various operations, sales of complimentary goods like vaporizers.....not to mention jobs being created.......and of course TAXES from all the aforementioned activity.
Guy and gals, without question this is going to be the next major boom. This will be the Second Agricultural Revolution! Revitalization to rural and urban areas alike.
And ERBB is in the catbird's seat with the Seed to Sale business model.
A Close Over the 50DMA Would Be Nice
Technically ERBB is looking strong. The Death Cross blew over, knocking down the share price and technical indicators into deep valleys. ERBB is slowly clawing back from an onslaught of profit taking, profit protecting and weak-handed selling, as well as some small short fishes. Days like these when barely $200k of stock is traded are pretty boring but they are a sign that selling is mostly exhausted and buyers are on standby mode.
Much of the cannabis sector is coming off lows, gearing up for what is typically the best time to buy MJ stocks since the lows are being put in this quarter before the Q1 cyclical highs. The MACD indicators are nearing positive divergence on a handful of cannabis stocks. The RSI is neither overbought or oversold.
I don't expect November elections to be much of an event, at least not like Jan 1, 2014. Maybe this year is different and I'd love to be proved wrong, but even the November 2012 recreational legalization of 2 states took 2 years for the mainstream to understand the demand and deduction from those involved in the American cannabis industry.
Regardless of elections, American Green has bloomed into a major player here. The Zazzz machine is backed with patents and headed to several new dispensaries in multiple states. If new states are open to medical or recreational MJ that presents an even larger market for Zazzz. Those new markets also increase potential buyers of Truth Lighting systems, Jurassic Water Systems, OGTea and other American Green products. This is a groundbreaking territory and here's where Ivey excited.....
American Green is one of the most diversified companies in the cannabis industry. The Zazzz machine is the real juggernaut as revenues can be projected into the $100s of millions but the "seed to sale" business plan makes ERBB a real player. The best two outcomes I see are this;
1. Revenue projections are realized and American Green becomes a mid to large cap company.
2. A larger entity buys the company
Both options are realistic although I'd prefer to see ERBB grow organically and remain independent. Stephen Shearin is a capable leader of this company who understands the cannabis space but has great marketing connections as we has seen by the national media exposure he has brought to Zazzz. Good times can take a long time and I'm not in it for instant gratification. I want to see ERBB succeed as much as I want the industry as a whole to thrive.
Geeez Did People Not Read the PR
I'm more excited about American Green's recent announcement than today's Apple Keynote!
For all those who complained when American Green's live streaming event failed I have to laugh considering even the mighty Apple struggled with their live feed today. But that's neither here nor there.....
What IS here are 6 more names of dispensaries where Zazzz machines will be placed, including a retail location. I'll say that again for those who might be hard of hearing or thick in the skull....ZAZZZ IS NOW TO BE PLACED IN A RETAIL MARIJUANA SHOP IN DENVER!!! That's amazing. Truly outstanding! That means exposure to tourists, investors and anyone over 21. But AG also teased 6 more to be named locations, including a shop on the East Coast! Sorry for all the caps and exclaimations but I'm fired up about this. For all the naysayers, if like to rewind to less than a year ago when ERBB was being called a fraud because there was not Zazzz machine yet. I'm sorry but this company is NOT a fraud.
The CBD stuff is yet another opportunity to expand the brand and increase revenues. And now AG has Rex Chapman on board! C'mon, that's dope. Now I'm a Knicks fan from the 90s aaaaaand Rexy played on the Heat sooooo....jokes aside, Rex works for the Denver Nuggets and is well respected throughout the NBA.
Gang, American Green is absolutely kicking Zazzz and taking names. We're looking at nearly 15 Zazzz locations! Expansion into grow lights, hydro shops, cultivation systems, dispensaries....and the real kicker is that all these facets of ERBB compliment each other a la Apple's ecosystem. The growing systems can be sold via American Green's hydro shop in Sonoma. The hardware will be used to produce crops that can be sold in Zazzz.
American Green is developing an amazing "seed to sale" ecosystem.
ERBB On Its Way
Stephen did a great job greasing the gears in an effort to prevent them from grinding too much but despite Shearin's downplaying of earnings, the numbers were quite positive.
Yes the debentures were higher than most shareholders would like. Keep in mind that American Green is operating in a previously black market. Raising capital is not as simple as a walking into a bank with a business prospectus and asking for a loan. Venture capital is certainly an option if American Green wants to lose control of the Company and be at the whim of private equity. Clearly the Company has been able to acquire funding via several angel investors as well as using leverage through shares.
One unchanged number is the outstanding share count. That is quite a relief.
One number that did change was the cash holdings, and it was a significant bump to $300k+ from a meager $2k. Yes, some of that cash came from debentures but regardless, that capital will go a long way in helping operational expansion.
Another good number was the revenue growth. That was great considering Zazzz numbers are just trickling in and were not included in the report. At this time next year, ERBB could have several machines in place across multiple states. Who knows what those numbers will look like then.
I'm pretty excited by the report. We will see in the coming days if anyone else feels the same.
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