From CEO Steven Rash
The legal cannabis market continues to evolve. State and National political debates wrestle back and forth with equally encouraging and discoursing sound bites periodically spewing forth from the fray. The general direction seems to be for legalization in a two steps forward, one step back manner, but a national election that could alter the legalization path looms on the horizon.
Institutional investment skepticism is high, but easing, and the investment dollars that have come into the cannabis sector have substantially advanced formal and informal research allowing ‘real’ knowledge about the plant to advance exponentially over the last three years.
With the inherent risk mitigation provided by the liquidity of a public market, the number of publicly listed cannabis firms continues to grow. However, the sector is also starting to see a few firms exit the public market. Over the last year, cannabis sector share prices have declined impeding access to investment capital and likely discouraging some entrepreneurial cannabis endeavors.
Here at North American Cannabis Holdings, we remain exuberantly optimistic about the overall potential of the cannabis sector. At the same time, we are not immune to the political and investment market turbulence.
Our approach since the inception of our cannabis business strategy in 2013 has been to pilot various cannabis sector enterprise opportunities and further cultivate those pilots that show promise. To date, this approach has resulted in our AmeriCanna Cafe business, the Puration cannabis extraction business and the EVERx sports and fitness supplement business.
The three businesses are complimentary, but at the same time completely separate opportunities, each requiring separate and dedicated resources. While each has proved promising in its respective pilot phase, and been correspondingly reorganized to benefit from separate and dedicated resources, the fact of the matter is that all three are still sharing resources.
It’s not that we changed our mind and decided that shared resources was a better idea. It’s simply been a challenging environment overall for the cannabis sector and we haven’t yet made the progress we intend to make in establishing all three in a manner that facilitates separate and dedicated resources.
Mind you, we’ve made tremendous progress. One year ago we acquired a sports and fitness cafe to establish an operating foundation for the AmeriCanna Cafe. That business has thrived demonstrating healthy growth since the acquisition one year ago and we anticipate reporting over $500,000 in revenue in the first year following the acquisition. We’ve signed our first AmeriCanna Cafe license agreement in the last year and recent progress has brought us near a new milestone where we expect to shortly announce a number of new license agreements.
The Company’s cannabis extraction pilot has resulted in the establishment of the independent public company Puration, from which a dividend to be issued to North American Cannabis Shareholders is in the works. We anticipate announcing the dividend plan before the end of July.
The combination of the extraction pilot and the AmeriCanna Cafe pilot resulted in the creation of the EVERx sports and fitness nutritional supplement line of products. We expect to soon announce the availability of EVERx in nationally recognized retail chain of drugstores.
For all our success, we still have a long way to go, and paramount to our strategy is the establishment of separate and dedicated resources for each of the three businesses coming out of our pilot program: the AmeriCanna Cafe; EVERx, and Puration.
The Puration extraction operation, of course, has been established within a separate public company, but before a separate capital structure could be effective in supporting the growth of the extraction operation, the public company the extraction operation reverse merged into had to undergo some updates - as is the case in many reverse merger situations. Those updates have taken time and have not been achieved without investment. Puration has just recently established real independence and we anticipate some substantial and exciting milestone achievements to be announced soon.
North American Cannabis Holdings continues to pilot new projects while at the same time fostering the growth of our pilot program graduates, AmeriCanna Cafe and EVERx. Both the AmeriCanna Cafe and EVERx operations would benefit from separate and independent resources. While the spinoff of the Puration extraction operation has not been executed on the expedited schedule management and shareholders would have otherwise preferred, the premise is sound and management still expects the strategy to prove fruitful. Accordingly, management believes a similar spinoff strategy can be effective in supporting the accelerated growth of the AmeriCanna Cafe and EVERx. We further believe the experience with Puration has garnered hard knocks experience, the benefits of which will be demonstrated in the execution of similar strategies for the AmeriCanna Cafe and EVERx. In other words, management expects the spinoff schedule with AmeriCanna Cafe and EVERx to be much closer to the expedited timeframe we’d all prefer.
July is going to be a big month for North American Cannabis Holdings, Puration, AmeriCanna Cafe and EVERx. Stay tuned!