The statements contained in this report that are not statements of historical
fact, including without limitation, statements containing the words "believes,"
"expects," "anticipates" and similar words, constitute forward looking
statements that are subject to a number of risks and uncertainties. From time to
time we may make other forward-looking statements. Investors are cautioned that
such forward looking statements are subject to an inherent risk that actual
results may materially differ as a result of many factors, including the risks
discussed from time to time in this report, including the risks described under
"Risk Factors" in any filings we have made with the SEC.
Government Regulation
Currently, there are thirty-six states plus the District of Columbia that have
laws and/or regulation that recognize in one form or another legitimate medical
uses for cannabis and consumer use of cannabis in connection with medical
treatment. There are currently sixteen states and the District of Columbia that
allow recreational use of cannabis. As of March 31, 2022, the policy and
regulations of the Federal Government and its agencies is that cannabis has no
medical benefit and a range of activities including cultivation and use of
cannabis for personal use is prohibited on the basis of federal law and may or
may not be permitted on the basis of state law. Active enforcement of the
current federal regulatory position on cannabis on a regional or national basis
may directly and adversely affect the willingness of customers of the Company's
medicinal cannabis products to invest in or buy products. Active enforcement of
the current federal regulatory position on cannabis may thus indirectly and
adversely affect revenues and profits of the Company.
Our discussion and analysis of our financial condition and results of operations
are based upon our unaudited condensed consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these unaudited condensed consolidated
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses. On an ongoing
basis, we evaluate these estimates, including those related to useful lives of
real estate assets, bad debts, impairment, net lease intangibles, contingencies,
and litigation. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. There can be no assurance that actual results will not differ from
those estimates.
BACKGROUND
American Cannabis Company, Inc. and subsidiary company, Hollister & Blacksmith,
Inc., doing business as American Cannabis Consulting ("American Cannabis
Consulting"), (collectively "the "Company", "we", "us", or "our") are based in
Denver, Colorado and operate a fully integrated business model that features end
to end solutions for businesses operating in the regulated cannabis industry in
states and countries where cannabis is regulated and/or has been decriminalized
for medical use and/or legalized for recreational use. The Company provides
advisory and consulting services specific to this industry, manufactures
proprietary industry solutions including? the Satchel™, SoHum Living Soils™,
Cultivation Cube™ and the High Density Cultivation System.™ The Company also
sells 3rd party industry specific products and manages a strategic group
partnership that offers both exclusive and nonexclusive customer products
commonly used in the industry. American Cannabis Company, Inc. is a publicly
listed company quoted on the OTCQB Tier under the symbol "AMMJ".
Naturaleaf Acquisition
On April 30, 2021, the Company closed its acquisition of the assets of Medihemp,
LLC, and its wholly owned subsidiary SLAM Enterprises, LLC, and Medical Cannabis
Caregivers, Inc., each an entity organized and operating under the laws of the
State of Colorado, and all doing business as "Naturaleaf" in the medicinal
cannabis industry in Colorado.
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Medihemp and SLAM, respectively own fixed assets and operate two retail Medical
Marijuana Centers located in Colorado Springs, Colorado. Medical Cannabis owns
fixed assets and operates a retail Medical Marijuana Center located in Colorado
Springs, Colorado. Medical Cannabis also owns and operates a Medical Marijuana
Optional Premises Cultivation license, and a Medical Marijuana-Infused Product
Manufacturer license.
30
Naturaleaf agreed to sell or assign to the Company the following assets:
1. Three Medical Marijuana (MMC) Store Licenses;
2. One Marijuana Infused Product Licenses (MIPS); and,
3. One Option Premises Cultivation License (OPC); and,
4. Related real property assets, goodwill, and related business assets.
As a result, the Company has expanded its business model to include the
cultivation and retail sale of cannabis in the medicinal cannabis industry.
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