Sunday, August 6, 2017

Nipton makes the “BONG” time as marijuana company, American Green, “buys” it!

Newspapers all around the country are full of articles announcing this paradigm shift in the real estate business.
A whole little town is being bought by a marijuana company which plans to convert it from a mom-and-pop type hotel/store/rv park to a world class, cannabis based, state of the art location complete with mineral baths, boutique residences, a cannabis based “sparkling water” bottler, and even artists-in-residence!

Here are just a couple of the many “gushing” articles to be found on the web or in your local paper. These links should open in a new browser window.

Calif. town may be going to pot: Cannabis firm trying to create marijuana mecca

A cannabis startup is trying to buy an entire town in California

There are hundreds of other links to be found online, just google nipton sold.

I enjoy visiting the little hamlet of Nipton and have stopped there many times over the last couple of decades. It sits right at the top edge above the Mojave National Preserve and is a great rest stop.

The articles talk about how Nipton sits atop a rich flowing aquifer, one even called it a “Pleistocene lake.” That may or may not be hyperbole but for sure that water and its continued existence is of grave concern, at least to the Mojave National Preserve management and to conservationists, and the local flora and fauna. So the idea of a bottling plant drawing upon that aquifer is sure to be the subject, or should be, of some serious environmental review. Such reviews take time and cost some serious money, hold that thought for later.

Hopefully folks involved with the knowledge of the bureaucracy will follow this up with their thoughts on the subject.

There is talk about the new buyer incorporating the town after purchase so that the laws and ordinances can be written and implemented so that Nipton can be pot friendly, with outside recreational use etc allowed openly. Now that will take some serious lobbying and lawyering, again hold that thought to later.

Look I am not going to try to introduce any morality into this discussion but I do respect those who will. In the spirit of disclosure, from my late teens to early twenties, I smoked my share of pot. I am now 63 and haven’t touched it in decades. I do feel that it should be legal and sold in a controlled and taxed manner.

But perhaps this is not the company or the place to further legal marijuana’s place into society.

I believe that a deeper look should be made into this company named American Green which has now become the white knight riding in to buy and restore the sleepy burg of Nipton.

Think about the items I mentioned above in my post. Think of what would be involved in starting a new town and project and making sure that it doesn’t run afoul of any legal or environmental rules and regulations. How many $500 per hour lawyers would be involved in such an undertaking? Think of all the researchers and lobbyists would be involved. This kind of stuff costs big bucks. Will this company be able to pay the bills?

Per the news articles, American Green put $200,000 up and will pay the rest in cash, about $1.8 million.

How will they get the money? According to the broker who is handling the transaction there are other qualified buyers standing by, just in case. Is that typical real estate lingo? I seem to remember the same type of comments when I bought and sold both of my houses in the desert. Guess we will just have to wait and see. Or can we do a little basic research and try to get a better handle on the situation?

Something I might add that basic research appears not to have been done by all those high powered “reporters.”

Remember, this is basic due diligence here about to be presented for your perusal.

american_green_yahoo

american_green_google

Above is what a 30 second search on Google and Yahoo finance sites turned up about this “cannabis
investment firm.”
  Friday’s price for this “pink sheet” stock was 0.0016. Not even a penny a share.
Yet we, and the reporters, are expected to believe that this “massively capitalized firm” will be able to a)
pay for this property and b) all the planners, lobbyists, lawyers and others involved to turn this company’s dream into a profitable reality. Oh, and handle all the bureaucrats involved with getting to all that water underground and to get a bottling plant going.

Perhaps they have been imbibing a little too much of their cannabis water? Do they even have such a product or the wherewithal to develop it?

Please look up at the charts above again. Note the 52 week range for this stock which is 0.00 to 0.01. Note also the total number of outstanding shares, 13.91 BILLION! What kind of financing do you think this penny stock “cannabis investment firm” will be able to get?

Well since we are not mind readers perhaps we can get some clue from their financials. Bear with me, I will try to keep it simple. Here are a few links to look at if you are interested.

https://americangreen.com/

https://americangreen.com/investors/

Note this page only has a stock chart, surprisingly there is no other financial data available there at the company site so a deeper look is required.

The two screen captures below are the latest company supplied balance sheet and the direct link to where you can see it is below. Since this is a U.S. penny stock, it supplies the data to the OTCMarkets which is where the stock is traded. You can also check the SEC Edgar site as well.

Note any time you see this (xxxx) that is a negative number, also known as a LOSS.

http://www.otcmarkets.com/stock/ERBB/financials#

american_green_balance_sheet1

american_green_balance_sheet2

Below is the SEC Edgar results page. Be advised that I checked each entry and as far as I can tell, none are
the company who has bought Nipton. Dead end.

american_green_edgar

Getting back up to the balance sheet above and after looking over the income statement, we are expected to believe that a firm with 378,000 in revenues and a negative Net Tangible Assets Value of –$7,291,000 as of 6/2016, the last financials reported, will be able to cough up 1.8 million dollars more and pay for creating a new marijuana themed town- all I can say is that they must think that we are all smoking some wacky tobacco.

However, if the company provides the latest financials, we might get more information, such as how they managed to get their hands on the 200,000 dollar deposit for this real estate sale.

I have  invested speculated in several penny stock firms and a lot depends on the story and the publicity. This stock might not be a bad flyer to take. In fact, tomorrow it may get some bounce. Already I have noted several pumpers showing up on their Investor Hub stock forum pitching this, especially the pot themed town angle.
https://investorshub.advfn.com/American-Green-Inc-ERBB-1596/

Never a dull moment in penny stock land, that’s for sure.

So I have my doubts about this deal all way around. From environmental to financial, I am thinking that this won’t be done. I am not even sure that the deal won’t fall out in escrow. Just my opinion.

Speaking of opinions, here is one from someone who wrote an instablog about American Green over at Seeking Alpha, a respected financial forum site. A well documented article and worth a read.

ERBB: American Green 2016 Annual Report

So bottom line, don’t hold your breath waiting for the new California marijuana theme town to come into being- or for the real estate deal to even close……….

But if you have a couple of shekels and ain’t afraid of great risk of losing it all, you might take a flyer on the stock as it may just rise, just don’t fall in love with your position.

BIG FAT DISCLAIMER:

I am not a shareholder in American Green nor plan to be. I am not a financial advisor. I am not a financial blogger. I hope this deal does not go through as I like Nipton just the way it is. I prefer the aquifer not be drained for bottled cannabis water purposes.

Morongobill

3 comments:

  1. Good luck with your investment. Perhaps the company can make a go of it. I doubt it though.

    ReplyDelete
  2. "The plant of righteousness and truth", as it is referred to in the Book of Enoch. It's time for it to return to its rightful place in our existence... free of government hands, free to grow where it will, just as it was ever meant to be. God intended for humans to enjoy a symbiosis with it. We have cannabinoid receptors, the plant has cannabionoids. It was meant to be. To block this blessing to mankind is to defy God's will for man. The time has come to free the plant. Let nothing stop this liberation.

    ReplyDelete