American Seed & Oil Company, a subsidiary of North American Cannabis Holdings, Inc., cultivates cannabis to include hemp and marijuana in the States of Vermont and Maine. The Company is also engaged in the processing of harvested hemp and marijuana plants in order to deliver a variety of health and wellness consumer products in addition to supplying commercial clients. Cultivation and processing operations to date have been concentrated on establishing best practices and validating economic and market opportunity assumptions. The company plans to stair step up the scale of its operations in 2015 to include generating revenues from the sale of processed materials derived from hemp and marijuana.
In addition to cultivation and processing, the Company has entered into a number of partnership agreements to pilot potential health and wellness consumer products that would utilize cannabis cultivated by American Seed & Oil. The objective of the pilot partnerships is to increase potential revenue and margin opportunity by integrating American Seed & Oil cannabis into end health and wellness consumer products whereby American Seed & Oil adds to its proceeds from cannabis sales a share of the proceeds from the end health and wellness consumer product sales. The Company continues to develop additional potential pilot partnerships to add to its existing partnerships.
While not all 50 states have yet established regulations for the cultivation and distribution of medical marijuana, American Seed & Oil will nevertheless pursue a medical marijuana strategy nationwide.
Currently, the health and wellness benefits from medical marijuana are credited largely to two substances found in cannabis, Tetrahydrocannabinol (THC) and Cannabidiol (CBD).
Hemp typically has negligible amounts of THC but is rich in CBD. The therapeutic benefits of CBD suggested by preclinical studies include the treatment of seizure disorders, chronic pain, anxiety, nausea, schizophrenia, diabetes, PTSD, alcoholism, strokes, cardiovascular disease, cancer, as well as other ailments and various conditions.
Marijuana is typically rich in THC, but with limited CBD. Like CBD, THC also has many therapeutic benefits but is better known for its recreational characteristics.
The United States Drug Enforcement Administration (DEA) has differentiated hemp extracts not containing THC from marijuana in an effort to avoid disrupting ‘legitimate industry.’ Accordingly, hemp seeds, hemp oil, hemp lotions and other hemp infused products are readily available at boutique grocery stores, supermarkets and department stores.
In the states where legal medical marijuana policy has not been established, American Seed & Oil will work to establish a market presence by making CBD from hemp available to health and wellness consumers.
BRIEF CORPORATE HISTORY
North American Cannabis Holdings, Inc. initiated the American Seed & Oil Company operation to pursue the cannabis industry approximately one year ago.
Through acquisition, organic business development and key contracts, American Seed & Oil Company has established the necessary licenses to cultivate hemp in Vermont and marijuana in Maine. The Company has conducted one complete hemp-growing season and is currently expanding an existing marijuana cultivation operation. Fiber, seeds and oils from the first hemp crop are currently being processed and trialed in a number of different consumer and commercial products.
American Seed & Oil Company has conspicuously included defensible differentiation into its national marketing strategy in order to establish, grow and sustain market share within the cannabis sector which is experiencing nothing short of gold rush attention from entrepreneurs and investors. According to a recent research report published by GreenWave Advisors, the marijuana market within the United States if legalized nationwide could reach $35 billion by 2020.
Central to the Company’s differentiation strategy is producing superior product through research partnerships with recognized universities that can identify, validate and enhance the natural attributes of cannabis beneficial to human health and wellness.
To further differentiate itself and insure long-term operational sustainability, American Seed & Oil is
1.) integrating the local community into its production process and
2.) integrating the customer community into the product development process.
American Seed & Oil is leasing local land and contracting local farmers to tie the Company’s economic success with the local community’s economic vitality. The Company thrives if the local community thrives and the local community thrives if the Company thrives.
Similarly, the Company is engaging the cannabis health and wellness consumer in the development of cannabis infused products. American Seed & Oil is not designing its products. American Seed & Oil’s customers are designing their own products.
American Seed & Oil is integrating the veteran community through out its production process and health and wellness consumer product development cycle. The Company is actively engaging organizations helping to train veterans and put them to work in sustainable and organic farming. The Company is also exploring research project opportunities to evaluate the efficacy of both CBD derived from hemp as well as medical marijuana in the treatment of Post Traumatic Stress Disorder (PTSD).
The Company anticipates meaningful sales activity from its core cultivation operations in Vermont and Maine to begin in the second calendar quarter of 2015 (Company’s fiscal year end is June 30) and to continue to increase through out the year. The Company anticipates additional revenues from its health and wellness consumer pilot partnerships that have not yet been estimated. The Company has also established a reseller relationship with a foreign hemp cultivator and expects revenue in the 2015 calendar year that has also not yet been estimated. Management believes the revenue potential that might be achieved through reselling for the foreign hemp cultivator could be substantial.
The Company’s current working capital requirements are small and growth is anticipated to be primarily funded by high margin sales. The Company has not experienced any undue pressure in regard to debts associated with past operations. Management is optimistic that debts associated with past operations may be mitigated. In fact, year to date, debt has already been reduced by $1.5 million.