When a stock is as low-priced as ERBB stock currently is, then it's hard to imagine any significant return on investment. Yes, at $0.00030 USD on the OTC, shares of American Green (OTCPK:ERBB) are exceedingly low. So where do investors go from here?
ERBB Stock in 2019: Where to Next?
American Green gets a lot of attention these days. However, investors must question whether this is simply because it operates in one of the most trending sectors of 2019. The Arizona-based micro-cap company has a market cap of $7.4 million.
With that, it develops "branded, retail, and commercial cultivating solutions for licensed medical marijuana dispensaries." In other words, it creates products that aim to help cultivators grow their cannabis faster and healthier, thus improving product.
These products include "Jurassic Water" for cannabis plants—a growth elixir if you will. There's also an LED light called "Truth Lighting," which also encourages growth. Along with this it also offers some teas and a fertilizer product.
The company has also created a vending machine called ZaZZZ that dispenses cannabis-infused medicines/products. However, as of September 2018, it still hasn't sold any.
ERBB Stock
Here's a slice of reality with ERBB stock; over the past 12 months, it has fallen 73.3%. In a year that has seen most marijuana-related stocks surge, that type of decline is a red flag.
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For the quarter ending September 30, 2018, according to InvestingDaily, the company's unaudited financial statements reported online store sales of $25,649, along with $50,135 in sales from its “Paw Puddy” line.
This line comes from the company's joint venture made with Hempful Farms in 2017. The deal allows American Green to market and sell the Paw Puddy pet line of CBD products in American Green’s online store.
But in that same quarter, total profit came to $20,480, while total operating expenses came to $635,000. So all-in-all, American Green has been burning through cash.
Takeaway
ERBB stock's very low price means investors can easily buy a substantial position in American Green, and this might appeal. But don't be swayed by the fact that the company operates in the cannabis sector—a strong sector isn't enough to rescue it, and competition is rife.
Rather, due diligence is required, and much more research needed because, as of now, ERBB stock is questionable.
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