North American Cannabis Holdings, Inc (OTCMKTS:USMJ) Price and Volume Pop on News

Mere days after the first U.S. cannabis resort was announced, North American Cannabis Holdings, Inc. (OTCMKTS:USMJ) announced its new AmeriCana Cafe subsidiary. The new entity will seek to open a chain of cannabis-infused beverage locations. USMJ traded in record volume of 24 million shares and closed 30% up, propelled by the news.

USMJ was known as Algae International Group Inc., ticker symbol ALGA, until early June 2015 but it changed direction and sought to enter the ever-appealing cannabis market, eighteen months ago by its own admission. It’s safe to say that so far the switch has not been particularly successful, if USMJ‘s latest quarterly report is anything to go by. Here is the brief version of the balance sheet contained in it:

• ZERO in cash
• $66,500 in total current assets
• $4.4 million in current liabilities
• ZERO in revenues
• $357 thousand in quarterly net loss

The company has not recorded revenues in its last three fiscal years. It has however done a reverse split to the tune of 1-for-20,000. That helped bring some semblance of order to the 1.2 BILLION shares the company issued at QUADRUPLE ZERO prices ranging from $0.00005 to $0.00007 per share between 2011 and 2013.

The PR about the AmeriCana Cafe chain focuses on the pilot studies the company conducted and drops a further hype bomb, mentioning a “pending acquisition” that should speed things along. The acquisition target is not named but was brought up back in a May press release. The deal is still not finalized.

There is also the matter with USMJ‘s outstanding shares. The company had 48 million common shares outstanding as of March 31. However, there is a Schedule 13G filing dated May 8, 2015 which lists third party ownership of 5.09 million shares that comprise 7.69% of the total outstanding common shares as of that date. Curiously, the company is still listed as Savanna East Africa, Inc. even though it was last called that back in 2013. More importantly, this filing would peg USMJ‘s current outstanding shares at around 66 million. This would mean USMJ diluted its common stock over 35% within the space of just over one month.

Less than a month ago USMJ traded at $0.0045 per share. It remains to be seen where the price goes from its last close at $0.0176.