American Green (OTC:ERBB) is a small-cap marijuana company that has investors talking. But is ERBB stock a potential play for your portfolio? Or is this company simply riding the marijuana frenzy train?
Let's check out ERBB stock.
ERBB Stock: American Green
Selling for $0.00040 USD and up 33% on the day, ERBB is indeed a micro-penny stock investment. Also, with a market cap of $7.4 million, American Green is a very small company. For investors to make legitimate profits here, the company would want to be offering something special in this over-crowded marijuana space.
So what does it do?
According to its website, the company creates vending machines that dispense medical marijuana products. It also has a "state-of-the-art" cultivation facility in Arizona and is involved with the development and sale of cannabis-related apps.
But that's not all, American Green also offers cultivation support with its product called 'Jurassic Water' for cannabis plants, an LED light called 'truth lighting,' along with teas, and a fertilizer product.
Here's the Problem
There's an array of products on offer and an ambiguous website that vaguely suggests how this company might make revenue, so it's not hard to understand why ERBB stock fell over 75% in 2018.
Plus, the company released unaudited financial statements from the quarter ending September 30th. It's worrisome that these were unaudited, but also worrisome is the fact that there were no sales of the company's flagship vending machines.
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According to Investing Daily:
"Gross profit in the quarter came to $20,480. Total operating expenses came to a whopping $635,000, of which $250,000 was interest expense. Thus the company’s operational loss was $614,000."
Being Selective
It's very possible that ERBB stock is on the radar simply because it falls under the marijuana stocks category. Investors are understandably eager to get in early on the next big business especially since adult legalization arrived in Canada.
But there's cause for concern in ERBB stock. It certainly hasn't proven itself to warrant a fuss.
Being selective about your investments will only serve an investor well.
Featured Image: Pixabay
