This is an important and exciting time in the cannabis business sector. With Ohio becoming the 26th state to legalize medical marijuana this summer, marijuana is now legal in over half of the states. Currently, recreational use is legal in four states (Alaska, Colorado, Oregon and Washington) and the District of Columbia. This November, five more states (California, Arizona, Maine, Massachusetts and Nevada) have recreational marijuana on the ballot and three more states (Florida, Arkansas and North Dakota) have medical marijuana on the ballot.
State legalization is reaching critical mass and increasing the pressure on the federal government to proceed accordingly.
Recent PPS performance in the overall public cannabis sector indicates the market is optimistic about the upcoming November ballot prospects and the benefit that positive ballot results would have on the industry.
“California is the biggest potential market in the country and the passage of Prop 64 ‘will create an explosion in the value of compliant medical marijuana dispensary and cultivation licenses in good standing,’ said Steve Gormley, CEO of Seventh Point LLC a private equity fund acquiring those kinds of assets throughout Los Angeles, California.” (Forbes)
We are so optimistic about California, we are already in the process of opening and staffing an office in the Bay Area. California is a major consumer market where medical marijuana is already legal with the infrastructure that goes with it already in place. California is an ideal location for USMJ’s campaign to franchise and license the AmeriCanna Cafe as a cannabis themed, fast casual concept to targeted multi-brand quick-serve restaurant operators. We believe California legalizing recreational marijuana will substantially increase USMJ’s market potential.
In a first step toward developing a cannabis themed restaurant for the health conscious consumer, USMJ last year in June of 2015 acquired a fitness cafe with a full breakfast, lunch and dinner menu. The operation of the acquired fitness cafe provided North American Cannabis Holdings with a platform for developing its AmeriCanna Cafe concept. The acquired restaurant reported $420,000 in sales for the period from June 2015 to June 2016. In the first year operating under USMJ, the restaurant has realized over $500,000 in sales. In its fiscal year for 2016, USMJ realized twenty-three percent annual revenue growth reporting $515,475 in sales.
We have also substantially improved the Company’s balance sheet over the past year. Like many microcap public companies, USMJ as a public holding company has been home to a number of entrepreneurial operations over the years. Entrepreneurial misses rarely leave much behind in the way of assets, but frequently leave a legacy of debts. We have worked diligently and diplomatically with legacy debt holders to mitigate or outright relieve old debts associated with previous operations. And we’ve had good success. In the fiscal 2016 year, the Company reduced balance sheet reported liabilities by more than forty-five percent eliminating over $2 million in debt.
The AmeriCanna Cafe is the product of USMJ’s ongoing efforts to continuously pilot promising cannabis sector enterprises. USMJ entered the cannabis sector in 2013 piloting a successive series of entrepreneurial cannabis enterprises from hemp farming in Vermont, to growing medical marijuana in Maine, to extracting cannabinoids from hemp and marijuana, to infusing cannabinoids into consumer food and beverage products – to name only a few. A handful of pilot projects have shown promise and a select few like the AmeriCanna Cafe and EVERx have advanced toward commercialization.
While the AmeriCanna Cafe is being commercialized in-house, a second cannabis enterprise pilot project graduate is being commercialized in a spinoff. The spinoff commercialization effort consists of a proprietary extraction process with extracts to be infused into consumer food and beverages. The extraction operation is housed in the independently quoted public company Puration, Inc. (PURA). A dividend issuance of Puration common stock is planned for North American Cannabis Holding’s shareholders with a dividend date of record scheduled this Friday, October 21, 2016.
Puration is a model for the future of North American Cannabis Holdings with future PURA-like spinoffs and dividends to come. A second spinoff is in the works now.
By-the-way, the ballot prospects this November bode well for PURA as well. PURA will be sharing an office with us in California as they pursue local consumer food and beverage collaboration agreements.
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as such, may involve risks and uncertainties. These forward looking statements relate to, amongst other things, current expectation of the business environment in which the company operates, potential future performance, projections of future performance and the perceived opportunities in the market. The company's actual performance, results and achievements may differ materially from the expressed or implied in such forward-looking statements as a result of a wide range of factors.