Todor Pichurov

North American Cannabis Holdings, Inc (OTCMKTS:USMJ) Floats On

by Todor Pichurov July 6, 2015

It seems the market is still excited about North American Cannabis Holdings, Inc. (OTCMKTS:USMJ, USMJ message board), despite being given very few reasons for it. On Thursday, ahead of the long weekend, USMJ closed 20% up, propelled by yet another optimistic bit of PR coming from the company.

USMJ stopped at $0.011 by the bell, shifting a far more modest 8.7 million shares over the session. The company put up a new press release in the morning hours, announcing USMJ will be giving an “on demand shareholder presentation” that should be released tomorrow, July 7. This will give CEO Steven Rash a chance to give everyone much-needed details surrounding the company's recent acquisition of a health and fitness cafe, a part of the City Blends brand network.

Given that this is the company's first coffee shop, it will be interesting to see how USMJ intends to rapidly grow AmeriCanna Cafe into a nation-wide brand, given the very limited financial resources the company has. Allegedly, the new location acquired generates around $500,000 in revenues but shareholders would be better off consulting the consolidated financials when they arrive.

The company's latest PR also states that USMJ has been taking care not to go crazy with issuing new shares and “keep the float under one hundred million shares”. According to OTC Markets, USMJ had a float of 27 million back in March 2015, on total outstanding shares of 48 million. Hopefully, the ratio of float to total outstanding changed dramatically over the last three months. Otherwise, USMJ may have diluted retailers significantly.

A dilutive scenario is on the cards, as USMJ was cashless as of its last financial report and one way to pay for the beverage store acquisition is issuing a lot of new common shares. Hopefully, tomorrow's presentation will give traders sufficient details about the new acquisition, the payment method USMJ used for the deal and the company's current share structure, outlined in specific numbers and not the generalities used in Thursday's PR.

As an added curiosity, here is a cease trade order for the company's stock, issued by the British Columbia Securities Commission, back when USMJ was called Nova Energy, then amended as the company changed names to Savana East Africa and then Algae International Group.

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