Last week, American Green (ERBB) announced that it acquired the town of Nipton (120-acres) for approx. $5 million.
Although this news was reported last week, the market jumped all over it yesterday and ERBB had its best day in years.
This marijuana penny stock traded more than 3.5 billion shares yesterday and the shares ended the day up more than 131%. ERBB was up more than 180% at one point yesterday and the shares came well off these highs before bouncing back.
Wants Nipton to Become a Cannabis-Friendly Destination
American Green plans to make Nipton the country’s first energy-independent, cannabis-friendly hospitality destination. The city is strategically located and is less than 100 miles from Las Vegas and less than 250 miles from Los Angeles.
American Green said it will first focus on bottling CBD-infused water direct from a nearby aquifer. The company then plans to distribute this water throughout California.
The town’s current owner, Roxanne Lang, said the sale is still in escrow, but confirmed American Green to be the buyer.
Smoke and Mirrors
While we are favorable on the announcement and the confirmation from the town’s owner, it is hard to believe anything that American Green reports.
The company has a track record of failing to execute on its previously announced initiatives and we think this development is purely smoke and mirrors.
American Green trades for less than $0.01 for a reason…and it is not because it is a good company. We urge caution with ERBB and continue to believe that there are better opportunities available for investors.