American Green Inc (ERBB)

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ERBB: 12 Months to Greener Fortune
American Green (AG), formerly known as Tranzbyte, is taking the steps necessary to build a business. Share price aside, AG has been executing goals that should drive the company to greener fortunes. Here are several factors that could have American Green on the path to profitability in 12 months or less.

1. Zazzz Brand
If you read any press about the marijuana (MJ) industry over the past month, chances are you have seen something about the Zazzz MJ vending machines. Since the April 12, 2014 release party in Avon, CO, the press has had a field day reporting about the Zazzz machine from CNN to CNBC to New York Times to every MJ blogger, analyst and everyday blazer. AG's COO Stephen Shearin has been the public face of the company and IMO he has done a great job representing the company. He has also refrained from overtly bringing attention to the fact AG is publicly traded as ERBB. Some have complained about the lack of ticker promotion but as a penny stock player, the restraint Shearin has shown is enough to convince me that he is playing this to the highest professional standards. As a shareholder and an fan of ethics, especially involving penny stocks, I applaud Shearin for his efforts.

But on to the numbers. According to an interview with Shearin (I don't remember the specific interview), Zazzz machines take about 9 months to pay themselves off, putting it in the black in 12 months. Shearin has said the manufacturer can crank out 17 machines per day and the company has a goal of 1000 machines in a years time. Clearly, that 1000 mark seems like a lofty goal but with as many as 35 states legal in some way by 2015 (13 new states with Nov 2014 initiatives/22 existing MMJ or RMJ legalization), that is actually only about 25 Zazzz machines per state. California alone has about 2000 dispensaries and it is ONLY a MEDICAL states. California alone could be worthy of 500 machines.

So what would it take to reach 1000 machines in multiple states? First and most obvious, state approval of vending machines. Colorado allows for such machines despite all the concerns of getting legal approval of Zazzz machines and so does California. In fact, several dispensaries in California already use traditional snack-coil-type machines. Secondly, to place 1000 machines would require some sort of sales force. Think of Xerox machines leased in offices; those units have salespeople who hit the streets getting contracts. That leads to a third necessity, a maintenance force. There are numerous other requirements to get 1000 Zazzz machines placement but those 3 issues are what I think are most important; State approval, sales force, maintenance force.

As of right now, a Zazzz machine has been placed for "beta" testing at Herbal Elements in Avon, CO. At the Zazzz release, COO Shearing stated the beta phase would last a month or so before full operation begins. Shareholders are anxiously waiting to hear about progress and the latest word is that a digital faceplate was being tweaked. Once the faceplate is finalized, the mass production phase can begin and Herbal Elements Zazzz will be operational. Once ready to go, another dispensary in CO called Doctor's Orders has placed an order(s) for Zazzz machines.

But Zazzz is not only limited to the machines. AG has developed a line of atomizer pens (vapor pens) with another publicly traded company, The Vapor Group. Shearin has stated numerous times that the atomizers should be ready for market any day not. The Zazzz vapor pens would be a perfect item to release for sale on their new website, americangreen.com.

2. Jurassic Water System
Jurassic Water System (JWS) is a cultivation system that assists in oxygenating water. For anyone with growing experience, especially with hydroponics, you know that regulating the oxygen levels in a plants water is an important part of growing. The results from the test grows using the Jurassic Water Systems have shown as much as 50% higher crop yields. Again, any grower knows higher yields bring higher profits. IMO smaller grows would be the ideal use for JWS because the yield would be enhance despite less room.

However, according to a recent PR, AG already has a purchase order from another major MJ firm in CO for 100 JWS worth $1.17m. Thats a heck of a start. Who knows how this system plays out but this could be a major, multi state money maker, possibly even becoming the real profit driver.

3. OneBode
OneBode is a nutritional supplement company. OneBode is also linked to NBA MVP and superstar Steve Nash. It is also reported that Steve Nash is an ERBB shareholder. Nutritional supplements are a $100b industry. There is potential for cross marketing with OneBode and Zazzz, possibly even selling OneBode products in Zazzz machines. That is a win-win for both products. Despite traditional stereotypes, cannabis users are not all Doritos eating couch potatoes as evidenced by the wide use of cannabis by professional athletes.

4. Americangreenzine.com and Americangreenclothing.com
With some work this site could be come a source of ad revenue. There is possibility to develop a community there similar to blogs and message boards. I don't see the site being the Google of weed sites, but there is a lot of potential for expansion. I also don't expect the clothing line to be a major revenue generator but the Zazzz atomizer pens could be sold directly on the site. Also, OneBode products could be sold on the sites.

5. American Green / USEI Grow Facility and Dispensary
There has been a recent PR about AG's joint venture with USE! in a commercial grow op and dispensary in Denver. USE! utilizes LED grow lights and the utility costs are substantially lower for indoor growing.(I know, I know! MH and HPS are the only good lights for indoor). In conjunction with AG's Jurassic Systems, the lower energy lighting and high yield cultivation systems could make for a monster grow. Some of the larger dispensaries in states like California generate about $25m in annual revenue.

BOTTOM LINE
American Green's journey into profitability begins at the operational level and Stephen Shearin, the Chief Operating Officer has brought a lot to the table. In the 2 years I have followed this company, never before have they had products, only promises. Today, American Green has numerous products from retail items to cultivation systems to distribution systems to informational systems. The profit potential is now coming from all angles of the marijuana industry and although the share price does not reflect the recent operational developments, if revenues start to be realized, ERBB could just be a big winner.