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.
