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Why American Green Stock Is a Buy for 2023


Why American Green Stock Is a Buy for 2023

American Green (OTCMKTS:ERBB) is a company that specializes in cannabis cultivation, manufacturing, and distribution. The company operates in several states across the U.S., including Arizona, California, Colorado, Nevada, and Oregon. American Green also offers a range of products and services, such as CBD oil, hemp clothing, smart vending machines, and blockchain technology.

Despite being one of the oldest players in the cannabis industry, American Green stock has been trading at a very low price for a long time. The stock closed at $0.0004 per share on March 14, 2023, down 99% from its all-time high of $0.08 in 2014. However, there are several reasons why investors should consider buying American Green stock for 2023 and beyond.

Growing Cannabis Market

One of the main reasons to buy American Green stock is the growing cannabis market in the U.S. and globally. According to a report by Grand View Research , the global legal marijuana market size was valued at $24.6 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 14.3% from 2021 to 2028. The report cites factors such as increasing legalization, medical use, and social acceptance of cannabis as drivers of the market growth.

In the U.S., the cannabis market is also expanding rapidly, especially after the 2020 elections, when five more states legalized recreational or medical marijuana. According to a report by New Frontier Data , the U.S. legal cannabis market size was $17.5 billion in 2020 and is projected to reach $41.5 billion by 2025, representing a CAGR of 18.8%. The report also estimates that the total U.S. cannabis consumer base will grow from 28 million in 2020 to 41 million by 2025.

As one of the pioneers and leaders in the U.S. cannabis industry, American Green stands to benefit from this growing market demand. The company has a strong presence in some of the largest and fastest-growing cannabis markets in the country, such as California and Arizona. The company also has a diversified portfolio of products and services that cater to different segments and needs of the cannabis consumers.

Improving Financial Performance


Growing Cannabis Market

Another reason to buy American Green stock is the improving financial performance of the company. According to its latest quarterly report , the company generated revenue of $1.6 million for the three months ended December 31, 2020, up 10% year-over-year. The company also reported a gross profit of $0.7 million, up 40% year-over-year, and a net loss of $0.9 million, down 55% year-over-year.

The company attributed its revenue growth to increased sales of its CBD products and smart vending machines, as well as higher demand for its cannabis cultivation services. The company also cited its cost-cutting measures and operational efficiencies as reasons for its improved profitability and reduced losses.

Looking ahead, the company expects to continue growing its revenue and profitability in 2023 and beyond, as it expands its product offerings, enters new markets, and leverages its existing assets and partnerships. The company also plans to pursue strategic acquisitions and joint ventures that can enhance its competitive edge and market share.

Attractive Valuation


Improving Financial Performance

A third reason to buy American Green stock is its attractive valuation. As mentioned earlier, the stock is trading at a very low price of $0.0004 per share as of March 14, 2023. This gives the company a market capitalization of only $13 million, which is significantly lower than its peers in the cannabis industry.

For instance, Sundial Growers (NASDAQ:SNDL), a Canadian cannabis producer that operates in a smaller and more competitive market than American Green, has a market capitalization of $1.6 billion as of March 14, 2023. This means that Sundial Growers is valued at more than 100 times higher than American Green.

Of course, valuation is not everything when it comes to investing in stocks, but it does indicate that American Green stock is undervalued relative to its potential and performance. If the company can continue growing its revenue and profitability

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