North American Cannabis Holdings and Puration Shareholders Update
Based on the personal experience of a founder with a daughter that discovered relief from a seizure disorder through the use of CBD, North American Cannabis Holdings, Inc. (USMJ) entered the cannabis sector piloting various cannabis enterprises in the fall of 2013. The idea was to find one specific enterprise through the piloting process on which the Company could concentrate all its efforts. What USMJ management discovered instead, is that the cannabis sector at large was in need of a business that could continuously connect investors and cannabis enterprise entrepreneurs. The spinoff last year of a cannabis extraction enterprise into Puration, Inc. (PURA) and the subsequent dividend of PURA stock to USMJ shareholders has been a milestone event in the construction of a sustainable operation that can continuously connect investors and cannabis entrepreneurs. Now the Company has executed a second spinoff transaction with Alternet Systems, Inc. (ALYI) and more are in the works.
Marijuana Legalization: History In The Making
The evolving legalization of cannabis in the United States is a very exciting time that will leave its mark on the history of economics, medicine, and democracy. Legalization has not only created a new industry with $7 billion in annual sales and expected to grow to $50 billion in annual sales over the next 10 years, it has brought relief to countless health issues that not only debilitate impacted individuals, but also end-up debilitating entire families both emotionally and economically. The election of Donald Trump is a loud and boisterous message to the Federal Government, that Americans are not happy with business-as-usual in Washington DC. Whether or not America will be happy with Donald Trump as an alternative is yet to be seen. However, an even louder protest to business-as-usual in Washington DC has been overshadowed in the media by the multiple controversies surrounding Donald Trump. On November 8th, 2016, in direct opposition to federal law, eight more states legalized marijuana.
The ‘Will-Of-The-People’ Finds A Way Around Federal Intransigence
More than half of the 50 states in the United States have legalized marijuana now in direct opposition to federal law. Not since the Civil War has the United States seen the exercise of such state power over federal authority. While the media is frothing over tweets, offensive statements, and the selection of cabinet members whose names no one will remember even if their appointments are confirmed, they’re missing a history making precedence. The citizens of the United States have rediscovered a founding fathers’ instituted check-and-balance that has been overlooked for a long-time. U.S. citizens are invoking state-citizenship over U.S.-citizenship by voting for laws within their state on a matter where the U.S. government is not representing the will-of-the-people.
Drilling down on the idea of “not-being-happy-with-business-as-usual-in-Washington-DC” might lead to a further refinement of “unhappy” that more specifically identifies the “root-cause” of “unhappiness.” Evidence suggests that “root-cause” might be a Washington mentality that has transpired over time to rationalize a perversion of democratic capitalism with the idea that the will-of-the-people is subordinate to the will-of-Corporate-America. How else could the Federal Government think a trillion-dollar bailout of failed corporations was in the best interest of U.S. citizens? How disheartening to know that the Federal Government believes more in the executives that cratered the U.S. economy than in the entrepreneurial spirit and capacity of U.S. citizens at large to fill the void left in the aftermath of the failed fortune-500 executives. Did it cross the mind of anyone working in the Federal Government that the inherent message of the bailout to American entrepreneurs was “you don’t have a chance”. The Federal Government will use the taxes paid by citizens to subsidize the failure of large corporations (not to mention the lifestyles of the executives running large corporations) before they will allow entrepreneurs to introduce a new-way, a new-technology or a new-industry that advances the natural economic lifecycle of innovation and obsolescence. The Federal Government delivered a message that upward mobility in America is dead.
With the election of Donald Trump and the ongoing legalization, the American People have responded to the Federal Government’s prioritization of Corporate America over Citizens. Donald Trump is indeed a loud and boisterous response, but he may or may not be a solution. The rolling state-by-state legalization of marijuana is a solution. Legal marijuana is the will-of-the-people. It’s creating jobs, generating taxes and providing medical benefit. It’s inspiring entrepreneurialism and reigniting hope for upward mobility in America. The will of the people has spoken through the Federalism instituted by the founding fathers as yet another check and balance to protect life, liberty and the pursuit of happiness within the United States against the inevitability of periodic presiding government bodies that lose their way. The process of marijuana legalization is bigger than just the legalization of marijuana. The Marijuana legalization process is paving a path for the will-of-the-people to advance on multiple fronts in reclaiming a balanced democratic-capitalism that prioritizes the will-of-the-people over the ongoing subsidizing of outdated corporations and the idea that they are too-big-to-fail. American Citizens clearly believe in the entrepreneurial spirit and capacity of the United States. The state-by-state legalization of marijuana is just a first initiative of a repeatable state-by-state approach to reinstituting confidence in the entrepreneurialism of America amongst the state and federal law makers. The days of politicians that prioritize the longevity of legacy corporations over the will-of-the-people are numbered. Underneath all the media noise and uproar, the founding principles of America are prevailing. The will-of-the-people has found a way. Perhaps with a characteristically American sense of humor, marijuana has become the cornerstone of the latest historic renewal of America’s commitment to life, liberty and the pursuit of happiness. Civil War, World War, Depression, Trade Unions, Civil Rights, and Anti-War Protests are only a few of the headlines in the history of defending and improving democracy and the American-way-of-life. And now, the rebirth of Federalism through the legalization of marijuana is the latest headline in the history of defending and improving democracy and the American-way-of-life.
Proud To Be A Marijuana Advocating American – God Bless The USA
We live in a world today where entrepreneurs and investors have been separated by an entire industry – the financial services industry. Financial advisors, fund managers and investment brokers stand between entrepreneurs and the investors that breathe life into the creative aspirations of entrepreneurs. The financial industry interloping is far more pervasive than most might think. Consider the common home purchase transaction. The financial industry is there between buyer and seller. Mortgage Origination firms provide the mortgage product that funds the purchase of the house, and in turn, the Mortgage Originator sells the mortgage to a Mortgage Servicer. In light of the 2008 global financial crisis, its common knowledge now that the mortgage industry portion of the overall financial industry was not exactly doing its best in the interest of homeowners. Bernie Madoff is an exceedingly notorious example of a fund manager not exactly representing the best interest of his investors. In 2015 alone, regulators suspended or expelled over 1,000 financial brokerage professionals and suspended or expelled over 50 financial brokerage firms. In spite of all the issues within the financial services industry, the Federal Government has hesitated and delayed the implementation of new Crowdfunding Laws bemoaning the potential problems with entrepreneurial firms raising funds directly from individual investors without the expertise of the Financial Industry intermediaries to protect the interest of individual investors from the intentions of entrepreneurs.
USMJ intends to break down the barriers between entrepreneurs and investors at least within the emerging legal marijuana market. There is no shortage of entrepreneurial ideas springing up within the legal marijuana sector. USMJ is exploring new ways to build partnerships between entrepreneurs and the investors that can breathe life into those entrepreneurs’ aspirations.
USMJ is building that relationship around the public micro-cap corporate structures. We take no shame in working with securities that are priced at one or two cents or less than a penny. We are happy to build mutually beneficial relationships with investors that also take no shame in working with securities priced at one or two cents or less. We recognize the statistical odds of a new business surviving in the long-term is low, let alone the possibility of a new business growing into a Fortune 500. While we’ll make every effort to succeed in the long-term, our intention is to build candid relationships between our entrepreneurs and our investors that acknowledges the statistics surrounding long-term success of a young business. Accordingly, that candid relationship between entrepreneurs and investors will also recognize that investors can profit on a micro-cap public companies’ multiple milestone success, even though multiple milestone success may not add up in the end to a long-term success.
Micro-cap public company share prices may increase dramatically in reaction to a milestone success – as much as 100%, or even 1000% and sometimes even more. Following a milestone success, it is also not uncommon for a micro-cap public company’s share price to retrace back to its starting point prior to the milestone success. Investors and entrepreneurs can enjoy a mutually beneficial relationship around the lifecycle of milestone successes that characterize the journey of an entrepreneurial enterprise. Entrepreneurs can gain access to investment capital and investors can enjoy periodic opportunities to take profits when the entrepreneurs reach a next milestone. Just as we take no shame in working with securities priced at one or two cents or less, we will take no shame in having tried our best to build a Fortune 500 company should we in the end fall short of that goal.
Spinoffs and Dividends
One of the business mechanisms we have implemented in order to reach more entrepreneurs and more investors is the inclusion of a spinoff and dividend strategy. Last year, in 2015, USMJ spun-off a pilot cannabis extraction project by selling the related assets to a standalone micro-cap public company, Puration, Inc. (PURA). The intention from the onset of the deal with PURA was to issue PURA stock in a dividend distribution to USMJ shareholders. The idea is to enhance the mutually beneficial relationship between the entrepreneurs and the investors for both the entrepreneurs and the investors. The entrepreneurs have increased access to capital facilitated by an increase in investment activity incentivized with the offer of a dividend, and the investors have the opportunity to improve their profit potential not just through an increase in share price, but also with the payout of a dividend. USMJ fought the learning curve on getting the PURA dividend issued, but finally got it issued earlier this month. All eligible USMJ shareholders have received PURA common stock. The issued stock is restricted, but shareholders are encouraged to seek exemption from registration avenues for removing restrictions. USMJ and PURA are currently exploring a universal exemption from registration solution. We expect to publish guidance resulting from our exploration early in January.
Now the Company has executed a second spinoff transaction with Alternet Systems, Inc. (ALYI). Ideally, with the lessons learned with PURA, the ALYI transaction will proceed more smoothly. Additional spinoff transactions are in the works. USMJ management firmly believes that through its ongoing spinoff experience, USMJ can build a formidable platform for launching one marijuana enterprise after another in a manner that provides micro-cap public company investors an unparalleled opportunity to profit from marijuana sector investments.
USMJ’s Future: MassRoots Meets E*Trade
Beyond USMJ’s spinoff and dividend strategy, the Company has another strategic acquisition in the works. If the acquisition can come to fruition, USMJ obtains an impressive media capacity. The intent is for USMJ to add a marijuana business sector social media
component to its overall operation. USMJ is working to launch a social media platform for marijuana entrepreneurs to be able to communicate their vision directly to would be investors. With the social media platform combined with the ongoing development and evolution of the USMJ spinoff and dividend model, USMJ becomes a marijuana sector specific business that in a Hollywood Movie Pitch sort-of –way, is MassRoots (MSRT) meets E*Trade (ETFC). USMJ is building a business that lets marijuana sector entrepreneurs speak to marijuana sector investors and opt to invest in those entrepreneurs should they be so inspired. As stated at the beginning of this presentation, USMJ is working to fill a void in the cannabis sector where investors and cannabis enterprise entrepreneurs can continuously and directly connect.
Thank you for your interest in USMJ. We wish you all a happy and festive holiday season.