Our AmeriCann Stock Prediction in 2019 (Buy or Sell?)

The marijuana “green rush” is one of the biggest investment opportunities you can find. But you need to be selective. In this article, we scrutinize AmeriCann (OTC: ACAN) and its prospects for 2019.

AmeriCann is a penny stock that has no real revenue or earnings, and plenty of debt. As such, it’s especially risky.

But we don’t want to prejudge a company until we’ve thoroughly looked into it. Perhaps we may find something that piques the interest of the aggressive speculator.

Our ACAN stock prediction will examine the pros and cons of the company and see what 2019 has in store for it.

What's In This Guide?

What Is AmeriCann?

AmeriCann offers a turnkey package of services that includes financing, design, consulting, and construction, but only to approved and licensed marijuana operators in the U.S.

Management states that their business plan “is based on the anticipated growth of the regulated marijuana market in the United States.”

AmeriCann touts that it has an expert group of architects, engineers, and consultants who specialize in facility construction, real estate development, lean manufacturing, traditional horticulture, regulatory compliance, medical research, extraction processes security, marijuana cultivation and genetics, and infused product development.

The company’s approach is to hook up with a “Preferred Partner” that handles all of these marijuana products and services on a local basis. AmeriCann seeks to lease facilities to those Preferred Partners.

These AmeriCann facilities are designed according to a propriety cultivation and processing system that involves automation throughout the production life-cycle, such as monitoring and controls, customized workflow processes, and security.

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AmeriCann provides their Preferred Partners with all the permitting, identification, design, development, and operational infrastructure to cultivate and dispense medical cannabis in regulated markets.

But let’s be clear: AmeriCann does not cultivate, process, distribute or sell cannabis.

How Has AmeriCann Stock Performed?

  • Over the past year, ACAN shares have fallen 42% whereas the S&P 500 has lost 6%.
  • Over the past two years, ACAN shares have fallen 35% whereas the S&P 500 has gained 14%.
  • Over the past five years, ACAN shares have fallen 62% and the S&P 500 has gained 41%.

How Has AmeriCann Stock Performed in 2017/2018?

  • In 2017, AmeriCann shares gained 33% whereas the S&P 500 gained 19%.
  • In 2018, AmeriCann shares lost 42% whereas the S&P 500 has lost 6%.

Who Are AmeriCann’s Rivals?

American Cannabis (OTC: AMMJ)

American Cannabis offers consulting services to entrepreneurs on issues regarding regulatory compliance, oversight of cultivation build-out, business license applications for cultivating cannabis, business planning, compliance for audits, business growth strategy, and services for cannabis business monitoring.

American Cannabis sells four products. The Cultivation Cube is a self-contained and scalable cultivation system. The High Density Racking System is designed to use space in the most optimal manner possible. The Satchel is a child-proof product carrier. Finally, SoHum Living Soil is a soil product to grow cannabis that just requires the addition of water.

In 2014, the company generated $1.26 million in revenue; in 2015, $2.8 million; in 2016, $1.56 million; and in 2017, $2.44 million.

However, the company has no filings for 2018. And beware: AMMJ is a penny stock.

Canna Advisors (Private)

This consulting company offers staff sourcing, business development, licensing application assistance, brand development, growth and optimization, operations readiness, and compliance audit services — all or some of which are available in 13 states.

Those states are not just where cannabis has been legalized, but in states that may legalize going forward.

In the booming marijuana market of Florida, for example, the company is ready to provide all the elements needed for cannabis entrepreneurs. Management states on the company web site:

“Florida’s new Republican governor, Ron DeSantis, has been lukewarm in his statements about marijuana, but…may direct the Department of Health to begin accepting licenses for more medical marijuana businesses soon. The current rules governing the medical marijuana program are the subject of numerous lawsuits, and will almost certainly change prior to the DOH beginning acceptance of new applications.”

Canna Advisors suggests that marijuana entrepreneurs start planning now, such as securing property, with which the company can assist.

Medicine Man Technologies (OTC: MDCL)

Medicine Man operates through several divisional groups. Group 1 handles Consulting Services that include consulting packages, financial modeling, state licensing assistance, seminars, facility design, and a comprehensive how-to guide to grow marijuana.

Group 2 services existing cultivation operations. This division assists growers with optimizing and managing their facilities.

Group 3 involves Nutrient Products. The company sells nine plant nutrients to assist in cultivating marijuana plants.

In 2015, the company generated $835,000 in revenue, which fell to $631,000 in 2016. In 2017, revenue jumped to $3.48 million.

However, as with many marijuana companies, when you look closer the revenue picture grows murky. In recent fiscal quarters, much of the revenue stemmed from one-time occurrences, such as licensing deals.

Will AmeriCann Stock Go Up in 2019 (Should You Buy?)

As with most marijuana penny stocks, there really isn’t much of an argument to make as far as the company being under-priced. That’s because the company generates scant revenue.

To the surprise of nobody the company has not booked any revenue in 2018, while still generating over $1 million in general and administrative expenses, and another $337,000 in professional fees. It also booked $2 million in interest expense.

Frankly, we’d like to be one of AmeriCann’s lenders because the company is paying a fortune in interest.

Here’s a video that looks at the common errors that investors make when buying marijuana stocks:

Will ACAN Go Down in 2019 (Should You Sell?)

There’s one definitive statement that we can make about this company: it’s more overpriced then just about any other marijuana stock we’ve written about so far. And that’s saying a lot, because the marijuana industry is rife with dubious but excessively valued investments.

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Somehow AmeriCann has managed to book no revenue and yet incur a tremendous amount of debt in the process.

We don’t really understand how the company can even carry a $44 million market cap because it is worth literally less than zero.

Overall ACAN Forecast and Prediction for 2019

There’s only one reason we’re writing about ACAN stock, and that’s because marijuana is the “it” sector for the time being.

This company is dead in the water for the long-term.

But what about the short term? What is our ACAN stock prediction for 2019?

The stock currently trades at $2.07. During the frenzy in marijuana stocks in September, it ran up to $3.50 per share.

There might be one or two big rallies in these junk stocks this year, so perhaps ACAN will get up to $2.30.

But please, don’t chase it. It’s junk. It has no real business. Trading penny stocks is like trying to win a big prize at the carnival. The games are rigged and you’ll probably go home empty handed.