AmeriCann, Inc. (ACAN) Moves Into Illinois

AmeriCann, Inc. (ACAN) is a Denver based company that provides ancillary and consulting services to companies that operate in the legal cannabis industry. The company does not cultivate, process or sell marijuana. The services offered by AmeriCann include, but are not limited to the following:

• Offer real estate development services, which include research, consulting, and capital.
• Assist with the design and construction process of indoor cultivation facilities.
• Operate and manage cultivation facilities.
• Help companies apply for and acquire licenses.  

Geographically diverse

AmeriCann created partnerships with a number of medical marijuana applicants in Illinois during October 2014. The partnership agreements stated that AmeriCann would provide these companies with consulting services and capital. The capital would be used to acquire land, for working capital needs, and for the construction of cultivation facilities.

One of AmeriCann’s partners, Wellness Group Pharms (WGP), received one of the eighteen medical marijuana cultivation and processing licenses from Illinois. AmeriCann partnered with WGP before they submitted an application. Paul Montes, Managing Partner of WGP stated that, “Our affiliation with AmeriCann was instrumental in our success in being awarded one of the few cultivation licenses granted in an extremely competitive Illinois application process.”

Yesterday, AmeriCann announced that they expanded its relationship with WGP. The amended agreement stated that AmeriCann will develop a new state-of-the-art cultivation facility for WGP. The facility is called the Illinois Medical Cannabis Center (IMCC) and AmeriCann provided WGP with $600,000 to get the project started.

This is not a cultivation facility, it is a complex

Once the facility is fully completed, it will be approximately 285,000 square feet and it will be able to produce nearly 50,000 pounds of medical marijuana annually. The facility is located in Anna, Illinois and it is expected to create nearly 200 new jobs.  

AmeriCann’s role in is this project is substantial. The company will serve as the project developer and they will also be the owner of IMCC. AmeriCann will provide the necessary working capital and horticultural assistance to WGP. AmeriCann will receive a performance fee on all sales, a royalty on its infused product and extraction line, a monthly consulting fee and monthly lease payments.

Construction on the facility is expected to start this month and the first phase will build out approximately 27,000 square feet of the facility. WPG expects its initial harvest to be in late Fall 2015. AmeriCann will increase the cultivation capacity of the facility as the Illinois medical marijuana program develops.

Outlook

Shares of AmeriCann are down 25% this year and trading for $0.68. Technical420 is favorable on the company’s long term outlook, however, they face a lot of hurdles. AmeriCann trades roughly 2,000 shares a day which is very light and raises liquidity concerns for investors. Investors should proceed with caution before investing.

If you are interested in learning more about AmeriCann, or other cannabis companies, join our elite group of Pro Traders by registering for a FREE trial at https://technical420.com/user/register

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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