MARIJUANA COMPANY BUYS CALIFORNIA TOWN
Is it all smoke and mirrors. What is the reality?
Is it a scam or a great opportunity?
"The gold rush built this city, the green rush can keep it moving the way people envisioned it years ago." - Project Manager
In September of 2017, Nipton Town was purchased by American Green Inc., a cannabis product producer, for $5 million USD with plans to turn the town into a cannabis tourism destination. The CEO of American Green Inc. hopes to make this into the first Pot Town, USA.
"Is it all smoke and mirrors. What is the reality? There are too many things to this group that don't add up. Someone has to check the deed to see if the land transaction happened as described. And the board of directors has to show their faces before I'd invest a cent." - GreenScribe
If you were starting a marijuana business, wouldn't it be nice to have a good relationship with town hall. Well, one company figured out just how to do that. They bought the entire town with a green business plan in mind. American Green just agreed to a deal to buy the town of Nipton for the bargain basement price of $5 million greenbacks. They plan to make the town a destination for weed tourists, with weed galore, 120 acres of sustainable farm land, a school, a hotel with mineral baths and renewable energy.
"The cannabis revolution that's going on here in the US has the power to completely revitalise communities in the same way gold did during the 19th Century."
Nipton sits on the California side of the southeast border with Nevada. Once a thriving community, the town was founded more than one hundred years ago in the gold rush of 1905. Now "Nipton Town" has only a population of about 20. The concept is to turn the town into a Cannabis Eco-friendly Tourist Mecca.
"We thought that showing that there was a viable means of having a cannabis-friendly municipality and further making it energy independent could be a way of really inspiring folks to say, 'Why can't we do that here?'" - Project Manager Stephen Shearin
Chart above - the wild and crazy ride of a penny stock.
Sales of cannabis edibles have risen dramatically since rules on recreational use were relaxed. Now that Cannabis is legal recreationally and sales to non-medical consumers begin in 2018, the future for companies like American Green might be bright - provided that they comply with California's myriad of pot regulations.The last news on the American Green site was some six months ago, so this business is evidencing issues, which are of concern. However, if they were to pull off their big plans, this sub-penny stock could bloom, like bitcoin.
At the end of the day, unless you're in the know, a major play is not advised, but a $500 buck gamble might be the play.
A company which makes cannabis products has bought an entire town in California and plans to turn it into a "destination" for marijuana. American Green has agreed a deal to buy the town of Nipton for $5m (£3.8m). The company will own 120 acres of land, which includes a school building, a hotel, mineral baths and a general store. They also want to power the town with renewable energy.
WHAT THEY'RE SAYING
Marijuana company buys entire US town to create cannabis friendly municipality (bbc.co.uk)
I'm still hoping they rename it Nugton, I mean, all the pieces are there....
Scam??? It is. Due diligence on this company will tell you it's a scam. There are very vocal "shareholders" who feel they've gotten screwed. This company is an investor scam artist and this is another PR stunt to bolster stock sales.
I actually did the due diligence on the company yesterday when this article is posted. This company is a scam "pump and dump", and likely didn't even by the land. Here is what I found out.
The company itself seems to be a generic industrial hemp and cannabis producer/processor, if that. It claims to have a few products, some IP, etc., but a quick review of the company, its stock history, and investorshub page indicates that it is most likely a scam. More research into the company themselves and you quickly see accusations of "pump and dump" activity and other shady and fraudulent business practices.Even if the company is real, and competitive, it's business reputation leaves much to be desired.
Their financials are dogshit, and they bleed money like a stuck pig. Their balance sheet is appalling, and I have no idea who would loan this company the money to purchase the land, as it goes against almost every underwriting principle. The company brought in $378k in revenue last year and had an operating loss of $1.8 million.
Research into the purchase of this land leads to only one source (the company website). So you have to trust that they are truthful in what they are saying (despite their record and reputation). Research into the town itself does point to the fact that the town was for sale for $5 million, and that it generated "a couple hundred grand" per year in profit for the previous owner. Considering that they lose $2 million on average annually, this will do little to stave off natural bankruptcy.
So I say again, who would be dumb enough to loan this company the money to buy this land? Especially without any mention of the costs of infrastructure development, cost to build out their supposed production and processing facilities. A company with this bad of a balance sheet shouldn't be able to come close to acquiring the capital needed to get this project off the ground. Considering that the only source of this information is the company itself, I'm wary of its validity.
While I don't have access to level 2 data, my guess is that after the first "pump and dump" in 2014, the owners have been quietly buying up their shares in anticipation for the next round, happening now, which should give them enough cash to support those annual $2 million losses for another couple years.
Now to the actual real estate venture itself. The first thing to remember is that marijuana tourism won't be nearly the attractant it is today once most states and/or the federal government legalizes in 10-15 years. Additionally, it will only be a matter of time until competing towns start up, and without additional tourism and/or economic drivers to keep the town afloat, it will shutter and become a ghost town again. Unless they diversify and attract other economic development drivers, the business is likely unsustainable from a long-term growth perspective.
Additionally, the town is not currently incorporated, and will have to achieve that before obtaining their marijuana license. This process could take a few years, in which time many other states may legalize or nearby towns like Primm, NV could be them to the punch.
The town itself is in the middle of nowhere (like courage the cowardly dog nowhere), and aside from it's charm as cute early 1900's tourist town has little in the way of economic drivers or recreational activities. Additionally, because of its location in the middle of the mojave, it has serious natural resource limitations that prevent major industrial or economic activity from forming.
If what they say is all true, and they use the weed resort format to spur on diversified economic development activities that kick start and actual town, then they may have some hope. Without that, it appears that the land venture has some serious long term growth concerns that are unlikely to be mediated by being a popular weed resort for next 5-10 years.
My guess for what is going on, is that the owners are running short on their ill-gotten "pump and dump" gains form 2014 and need to keep the money train rolling. So they put the remaining couple million into their stock, release some fake/heavily editorialized news about the company, and wait for the multiple 1000% percent increases (because it is a penny stock). They may even buy some more at higher prices to manipulate the price upwards to fool in more investors. Then they pull the rug out from everything, sell for a modest 200-300% return (causing the stock to crash) on their original couple million dollar investment, and hide for a few years hoping the SEC and FBI don't find out their dirty secret. Meanwhile everyone else loses most of what they invested.
They have about 14.5B shares currently issued, and are authorized to issue a total of 25B.
Okay just shorted a stock at .0000018 only way is up.....wait....if it goes to .007 i'm jumping!
The biggest clue that they are a scam is the amount of times they've changed their name.
I know a billion shares is a lot in terms of shares but why is bad/what does it mean?
It's because they don't have any profit to show for the shares.
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