In late 2020, we had the opportunity to speak with American Cannabis Company (AMMJ) CEO and President Terry Buffalo and wanted to issue an update on the opportunity following our discussion.
Our conversation took place after American Cannabis Company reported to have executed a non-binding letter of intent (LOI) with Andina Gold Corporation (AGOL) to purchase assets of its Good Meds and BOSM Labs operating division, a fully licensed cultivation and extraction operation in Colorado offering premium cannabis and cannabis extracts to the wholesale and retail medical and recreational markets.
Through the agreement, American Cannabis Company has acquired one cultivation operation and one hydrocarbon extraction laboratory and production center. This development represents a change in strategy for the company and we are favorable on the direction that the business is headed.
On a comparative basis, it seems like American Cannabis Company is attempting to execute on a growth strategy that is similar to Schwazze Inc., (SHWZ). We will monitor how the company is able to drive the story forward and will keep an eye on how the management team is able to create long-term value for the business.
Since 2009, the Good Meds brand has cultivated and sold premium cannabis flower products to medical patients and recreational consumers in Colorado. BOSM Labs has a proven track record as a high-end manufacturer of well-known hydrocarbon-extracted cannabis products. We are favorable on the reputation that is associated with the cannabis brands and will monitor how the story advances from here
We believe the sum of the parts of the assets is greater than the value that is associated with each individual business. Over the next year, we expect American Cannabis Company to find significant synergies between the assets and we are bullish on the potential value that can be generated through this strategy.
From human capital to strategic assets, the acquisition will provide American Cannabis Company with attractive avenues for growth. We believe the combined company will be led by a management team with diverse expertise and a proven track record. Going forward, we believe American Cannabis Company is going to reach an inflection point and are favorable on how the business has evolved.
In 2015, we started to cover American Cannabis Company and believe the business has evolved in a way that is better suited for the current market environment. By focusing on acquiring assets in Colorado, the company is putting together a portfolio of strategic cannabis assets and believe that the market is discounting the growth prospects that are associated with the strategy.
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