American Cannabis Company, Inc. 2017 Mid-Year Review and Shareholder Update

DENVER, CO--(Marketwired - Aug 29, 2017) - American Cannabis Company, Inc. (OTCQB: AMMJ) ("American Cannabis Company," "ACC," or the "Company"), an international distributor of ancillary products and services to the cannabis industry and one of the largest cannabis consulting firms, released second quarter 2017 financial results for the three-month period ended June 30, 2017 and filed a Form 10-Q Statement with the U.S. Securities and Exchange Commission on Monday, August 21, 2017.

American Cannabis Company provides advisory and consulting services specific to the cannabis industry, designs industry-specific products and facilities, and distributes proprietary and tailored intellectual property, products, and services to cannabis operators and businesses. The Company operates in the regulated cannabis industry in states and countries where cannabis is regulated and/or has been de-criminalized for medical use and/or legalized for recreational use.

2017 Mid-Year Financial Update

American Cannabis Company is pleased to provide an overview of its second quarter financial results and an update on its progress year-to-date.

• The Company's current ratio for the period ended June 30, 2017 was 13.40, which reflects the Company's liquidity and its ability to cover its current liabilities.
• The Company's debt to equity ratio for the period ended June 30, 2017 was 0.08, which indicates the Company's solvency and its ability to satisfy its debt obligations.
• The Company's quick ratio for the period ended June 30, 2017 was 13.23, which shows the Company's availability of liquid assets

Chief Financial Officer (CFO), Michael Tuohey, CPA, commented, "Over the course of the last 12 months the financial strength of the Company has continued to improve. We feel this positions the Company to have the flexibility to expand and take advantage of opportunities within the industry. Management is committed to improve its position in the industry and shareholder value."

Results of Operations (Unaudited)
Three Months and Six Months as of June 30, 2017 and June 30, 2016
			For the three months ended June 30,							For the six months ended June 30,
			2017			2016				2017			2016
Revenues
	Consulting services		$	841,762		$	211,863			$	1,415,059		$	459,473
	Product and equipment			111,018			231,785				154,879			524,579
Total Revenues				952,780			443,648				1,569,938			984,052
Cost of Revenues
	Cost of consulting services			87,251			51,278				149,076			99,800
	Cost of products and equipment			46,146			145,848				131,205			380,857
Total Cost of Revenues				133,397			197,126				280,281			480,657
Gross Profit				819,383			246,522				1,289,657			503,395
Operating expenses
	General and administrative			439,021			307,953				1,080,026			531,440
	Investor relations			11,795			893				16,990			18,068
	Selling and marketing			39,069			19,662				77,304			40,477
	Research and development			212			1,413				680			1,413
Total Operating expenses				490,097			329,921				1,175,000			591,398
Gain (Loss) from Operations				329,286			(83,399	)			114,657			(88,003	)
Other Income (expense)
	Interest Income (expense)			540			(1,376	)			9,169			(10,329	)
Total Other Income (expense)				540			(1,376	)			9,169			(10,329	)
Net Income (Loss) before taxes				329,286			(84,775	)			123,826			(98,332	)
Income Tax expense (benefit)				-			-				-			-
NET INCOME (LOSS)			$	329,826		$	(84,775	)		$	123,826		$	(98,332	)
Basic and diluted net income (loss) per common share*			$	0.01		$	(0.00*	)		$	0.00*		$	(0.00	)
Basic and diluted weighted average common shares outstanding				51,434,050			46,375,168				51,434,050			45,628,580
* denotes an income (loss) of less than $(0.01).

• Total revenues for the second quarter ended June 30, 2017 were $952,780 compared with $443,648 for the same period in 2016, which represents a 115% increase, or $509,132, over 12 months. The increase was primarily attributable to the industry and Company's expansion in the U.S. and international markets. The Company's execution of strategic plans and sales efforts greatly impacted increased revenues as well.
• Revenues from consulting services for the second quarter ended June 30, 2017 were $841,762 compared with $211,863 for the same period in 2016, which represents a 297% increase, or $629,899, over 12 months. The increase was primarily attributable to the Company having more consulting sales, new consulting clients, and recurring client revenue from ongoing engagements.
• Revenues from product and equipment sales for the second quarter ended June 30, 2017 were $111,018 compared to $231,785 for the same period in 2016, which represents a 52% decrease, or $120,767, over 12 months. The decrease was primarily attributable to fewer products and equipment sold, which is directly correlated to the Company's client revenue cycles. Client revenue typically includes a significant product and equipment purchase when the client is awarded a license, which can be inconsistent due to the variable timing in each state market and the nature of the Company's obligations and resources.
• Total cost of revenues during the three months ended June 30, 2017 were $133,197, or 14.0% of total revenues. This compares to total costs of revenues for the three months ended June 30, 2016 of $197,126, or 44.4% of total revenues. This represents a 30.4% decrease in the total cost of revenues as a percentage of total revenues, or $63,929, over 12 months.
• Gross profits for the second quarter ended June 30, 2017 were $819,383 compared with $246,522 in the same period in 2016, which represents a 232% increase, or $572,861, over 12 months. The increase was mainly due to the addition of new clients in multiple states, which retained the Company for consulting services pertaining to marijuana licenses.
• Operating expenses, including selling, general, and administrative costs, and all other operating expenses for the second quarter in 2017 were $490,097 compared with $329,921 for the second quarter in 2016, which represents a 33% increase, or $160,176, over 12 months. The increase can be attributed to the Company's investment in sales and marketing efforts, which also resulted in new clients and increased revenues. Additional staff hires contributed to the increase in administrative costs as well. 
• The Company realized an operating gain of $329,286 in the period ended June 30, 2017 compared to a loss of $83,399 in the period ended June 30, 2016. This represents a 494% increase, or $412,685, over 12 months.
• The Company's net gain in the second quarter of 2017 was $329,826 or $0.0 per share compared with a net loss of $84,775 or $0.0. per share in the second quarter of 2016. This represents a 489% increase, or $414,601, over 12 months.

Condensed Consolidated Statements of Cash Flows
Six Months as of June 30, 2017 and June 30, 2016
		Six Months				Six Months
		Ended June 30, 2017				Ended June 30, 2016
Cash flows from operating activities:
Net income (loss)		$	123,826			$	(98,332	)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Bad debt expense			73,280				13,344
Depreciation			2,676				2,477
Amortization of discount on convertible note payable			-				10,372
Stock-based compensation to employees			401,809				14,422
Stock-based compensation to service providers			-				9,198
Changes in operating assets and liabilities:
Accounts receivable			(102,367	)			(116,795	)
Deposits			-				2,845
Inventory			16,974				(293	)
Prepaid expenses and other current assets			(7,735	)			(18,646	)
Advances from Clients			(210,024	)			(105,416	)
Accrued liabilities and other current liabilities			5,727				(31,214	)
Accounts payable			17,911				(146,491	)
Net cash provided by (used in) operating activities			322,077				(464,529	)
Cash flows from investing activities:
Purchases of property and equipment			-				(1,662	)
Net cash used in investing activities							(1,662	)
Cash flows from financing activities:
Proceeds from issuance of convertible notes payable			-				139,065
Proceeds from issuance of common stock			602,693				-
Net cash provided by financing activities			602,693				139,065
Net increase (decrease) in cash and cash equivalents			924,770				(327,126	)
Cash and cash equivalents at beginning of period			751,038				555,780
Cash and cash equivalents at end of period		$	1,675,808			$	228,654
Supplemental disclosure of cash flow information:
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	-			$	-
Non-Cash Investing and financing activities:
Conversion of note payable to common shares		$	-			$	71,500
Common stock issued for debt converted in prior year			2				-

• Net income from operating activities for the six-month period ended June 30, 2017 was $123,826 compared to a net loss of $98,332 for the six-month period ended June 30, 2016. This represents a 226% increase, or $222,158, over 12 months. 
• The Company issued 439,182 shares of common stock to employees during the six months ended June 30, 2017, which were valued at $401,809. This is significantly higher when compared to $14,422 in stock-based compensation for the six-month period ended June 30, 2016. The increase can be attributed to a one-time stock compensation expense for employment contracts and an increase in the stock price per share used to determine the dollar value of the cost for shares. The Company has not received any cash in exchange for the stock compensation granted to employees, which was recorded as an expense of $401,809.
• In the first quarter of 2017, the Company eliminated stock grants from its compensation policy. The Company decided that it would issue warrants as an alternative method of compensation (if needed). One of the benefits of the Company offering warrants instead of stock compensation is the negligible cost due to the variability and indeterminable nature of the warrants' future exercise and corresponding share price(s).
• Accounts receivable for the six-month period ended June 30, 2017 was $102,367 compared to $116,795 for the six-month period ended June 30, 2016. This represents a decrease of 12%, or $14,428, over 12 months. The improvement is attributable to increased efficiencies in operations and accounts receivable turnover.
• Accounts payable for the six-month period ended June 30, 2017 was a credit balance of $17,911 compared to a debt of $146,491 for the six-month period ended June 30, 2016. This improvement represents a decrease of 112%, or $164,402, over 12 months. The decrease reflects that the Company paid down its previous accounts payable balance and has pre-paid some of its vendors for products and services received year-to-date. 
• Net cash from operating activities produced a gain of $322,077 for the six-month period ended June 30, 2017 compared to a loss of $464,529 for the six-month period ended June 30, 2016. The difference represents an increase of 169%, or $786,606, over 12 months. This can be largely attributed to improvements in accounts payable and cash advances (100% increase) from clients for goods and services provided by the Company.
• Net cash from financing activities was $602,693 for the six-month period ended June 30, 2017 compared to $139,065 for the six-month period ended June 30, 2016. This improvement represents a 333% increase, or $463,628, over 12 months. The net cash from financing for the six-month period in 2017 was attributed to proceeds from the issuance of common stock, whereas the net cash from financing in 2016 was attributed to proceeds from the issuance of convertible notes payable.
• The Company's cash and cash equivalents at the end of the six-month period ended June 30, 2017 were $1,675,808 compared to $228,654 at the end of the six-month ended June 30, 2016. This improvement represents an increase of 633%, or $1,447,154, over 12 months.

Condensed Consolidated Balance Sheets
As of June 30, 2017, and December 31, 2016
			June 30, 2017				December 31, 2016
ASSETS
Current Assets
	Cash and equivalents		$	1,675,808			$	751,038
	Accounts receivable, net			193,538				164,451
	Inventory			25,526				42,500
	Prepaid expenses and other current assets			17,560				9,825
Total Current Assets				1,912,432				967,814
Property and equipment - net				8,963				11,639
	Other Assets			4,500				4,500
TOTAL ASSETS				1,925,895				983,953
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
	Accounts payable			73,693				55,782
	Accounts payable, related party			-				14,325
	Advances from clients			12,164				222,188
	Accrued and other current liabilities			56,776				36,724
Total Current Liabilities				142,633				329,019
Total Liabilities				142,633				329,019
Commitments and contingencies
Shareholders' Deficit
Preferred stock, $0.01 par value; 5,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively				-				-
Common stock, $0.00001 par value; 100,000,000 shares authorized; 51,434,050 and 49,847,593 issued and outstanding at June 30, 2017 and December 31, 2016, respectively				514				498
Additional paid-in capital				6,393,870				5,389,384
Accumulated deficit				(4,611,122	)			(4,734,948	)
Total Shareholders' Deficit				1,783,262				654,934
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT			$	1,925,895			$	983,953

• The Company's total cash and equivalents for the period ended June 30, 2017 were $1,675,808 compared to $751,038 for the period ended December 31, 2016. This represents a 123% increase, or $924,770, over six months.
• Total assets and liabilities for the period ended June 30, 2017 were $1,925,895, respectively, compared to $983,953 for the period ended December 31, 2016. This represents a 96% increase, or $941,942, over six months.
• Total current liabilities (short-term debt) were $142,633 as of June 30, 2017 compared to $329,019 as of December 31, 2016, which represents a 57% decrease, or $186,386, over six months. Liabilities included $73,693 in accounts payable as of June 30, 2017 compared to $55,782 in accounts payable as of December 31, 2016. This represents a 32% increase, or $17,911, over six months.
• The Company had no long-term debt as of June 30, 2017 or December 31, 2016. 
• Stockholders' equity in the Company was $1,783,262 for the second quarter of 2017 compared to $654,934 for the second quarter of 2016, which represents a 172% increase, or $1,128,328, over 12 months.

Corporate Update

The Chief Executive Officer (CEO) of American Cannabis Company, Terry Buffalo, commented on the second quarter 2017 results, "We are pleased with the rapid growth we have experienced this year and that we are delivering positive value for our shareholders. The second quarter financials are a dramatic improvement from our first quarter results. Since we filed the Form 10-Q [Statement] with our second quarter results, the new challenge for us will be to maintain our position as an industry leader as we continue to expand our business internationally and to increase brand awareness." 

The Company's strong improvements in financial condition and performance metrics are expected to continue through the rest of the year, given its current position, client portfolio, and market opportunities. To date, the Company has completed over one million square feet of marijuana cultivation facility design work for clients in multiple legal marijuana states and countries.

Founder and Chief Development Officer (CDO) of American Cannabis Company, Ellis Smith, reinforces the Company's growth trajectory, "There has been an increase in demand for our products and services this year, and we're constantly entering new markets now. We have successfully enhanced and refined our model, and we can provide our clients with a more robust and full suite of vertically integrated solutions for marijuana business owners in any market, from the license application to the facility design to the business management."

Due to the Company's continued growth and an increase in demand for its products and services, the executive team increased the Company's resources and added new team members in 2017. These additions strengthened the consulting team's capabilities and knowledge base and improved operating efficiencies.

Buffalo commented on the consulting team expansion, "This year, we increased operating efficiencies and service quality by adding new team members with tangible skills and valuable experience, which also helped us refine our processes and procedures. As a result, we are providing a higher quality of service for our clients, which has proven to be successful for us so far. Improvements like this have a material impact on the Company's financial results, and we have just started to reap the benefits." 

Smith opines on the Company's competition, stating "We have a unique advantage in our ability to apply the most advanced sustainability techniques and efficient technology available, such as LEED® green building designs, ISO standards, GMP and GAP methods, and fully automated 'smart grows.' The market has shown us a need and appreciation for customized and cost-efficient solutions in marijuana business management, especially in cases where the clients are new market participants. We can add meaningful value for our clients by teaching them how to operate successful marijuana businesses and giving them the tools they need to be effective business owners and managers."

One of the Company's clients is breaking ground this week on a new cultivation facility in Aurora, Colorado, which includes a 22,500-square foot state-of-the-art greenhouse cultivation facility and 1,000-square foot showroom showcase designed by the Company. The greenhouse will be provided by a leading greenhouse supplier, which is one of the partners involved in the project. The showroom showcase will be open to the public for viewing.

Business Update

More Clients and New Markets

U.S. Market Expansion. In 2017, the Company expanded its national presence and was engaged by clients based in most of the U.S. states where marijuana is legal in some form, such as OH, MI, FL, AR, LA, CA, MD, NV, ND, CO, and PA. The Company's scope of work for projects initiated and completed in the second quarter includes state applications for cultivation, processing licenses; facility design and construction; vendor selection and equipment sourcing; real estate development and lease management; financial planning and oversight; recruiting and hiring; standard operating procedures (SOPs) development; regulatory liaison; OSHA training; compliance; and opportunity analysis.

Canadian Market Expansion. Currently, the Company is experiencing a high demand for products and services in Canada, and it has retainer clients in multiple provinces of Canada, which include license applications. The Company has established new distribution channels and co-packing arrangements throughout the country based on increased demand for the Company's proprietary cultivation product, SoHum Living Soils^®.

Introducing New Technologies. The Company is currently working on a highly innovative real estate development project in Canada with a leading greenhouse manufacturer to build a first and one-of-a-kind marijuana cultivation facility, which will be introduced to the marijuana industry via this project. The custom design features a 64,600-square foot indoor cultivation and processing facility with a 46,368-square foot greenhouse on top of the building for a total of 110,968 square feet dedicated to canopy and supporting functions. Additionally, the indoor cultivation utilizes American Cannabis Company's proprietary, vertical cultivation solution, the High Density Cultivation System^™ ("HDCS^™"). HDCS applies the principles of lean manufacturing to maximize the amount of usable square feet and horticulture production yields in the facility.

International Expansion. While the Company has continued to increase its footprint and client engagements in the United States (U.S.) and Canada, it is currently exploring new opportunities and partnerships in international markets, including Europe, the Middle East, South America, the United Kingdom (U.K.), South Africa, and Jamaica.

New Products and Services

New Cultivation and Dispensary Management Services. In addition to the scope of work for services as indicated, American Cannabis Company has expanded its existing suite of services to include cultivation and dispensary management. The Company currently offers complete turnkey solutions for clients that require more hands-on assistance with business operations.

Discounted Services for Equity Model. The Company is actively seeking strategic partnerships with licensed (and aspiring) operators in emerging marijuana programs and new state markets. The executive team expects to receive enhanced returns on its stock performance and the Company's investments in client projects due to the evolved business model, in which the Company provides discounted services in exchange for equity in its clients' companies.

Intellectual Property Licensing. The Company is currently licensing intellectual property to clients for some of its products and services offered. This licensing service allows those clients to market and distribute the Company's brand and/or white-labeled products in the various state markets.

New Product SKUs. The Company will be releasing new product SKUs in the third quarter of 2017.

SoHum Living Soils^®

2017 High Times STASH Award Winner. In July 2017, American Cannabis Company's proprietary product, SoHum Living Soils^® ("SoHum^®"), won the 2017 High Times STASH award for "Best Potting Mix." High Times' STASH or "Significant Technological Achievements in Secretive Horticulture" (or STASH) Awards celebrate technological advances in the cannabis industry, specifically the most innovative and effective products used for cultivation.

SoHum^® is the Company's fully amended soil blend designed for marijuana cultivation. The "just add water" growing medium contains 100% natural ingredients and provides the cannabis plant with all the macro/micro nutrients needed to maximize the genetic potential and to optimize the cannabinoid profile. SoHum^® improves the plant's yield and quality and it decreases time, cost, and labor. www.SoHumSoils.com.

Addition of Co-Packers. The Company has signed agreements with new co-packing providers to produce SoHum Living Soils^® in multiple regions throughout the U.S. and Canada to meet the growing demand for soil from customers.

Additional Information

About the Company

Based in Denver, Colorado, American Cannabis Company, Inc. (OTCQB: AMMJ) ("American Cannabis Company," "ACC," or the "Company") is a business-to-business consulting firm that offers turnkey and end-to-end solutions to existing and aspiring participants in the cannabis industry.

Since 2013, American Cannabis Company has worked with dozens of companies that are now thriving in the cannabis industry, many of which were awarded legal marijuana licenses in multiple states with the assistance and support of the Company. Its team of industry veterans and subject matter experts leverages their hands-on experience and acquired knowledge to provide business planning and market assessment services, to assist with state licensing procurement, and to create business infrastructure and operational best practices.

In addition to these services, the Company owns a portfolio of proprietary, marijuana-focused, cultivation products, which include: The Satchel™, Sohum Living Soils™, The Cultivation Cube™, and The High Density Cultivation System™ ("HDCS"). The development and growth of its brands and product suite are rooted in the Company's geoponics philosophy of "combining the art and science of agriculture in soil."

For information about American Cannabis Company, please visit the website:

www.americancannabisconsulting.com
www.americancannabiscompanyinc.com
www.sohumsoils.com

Forward-Looking Statements

This news release contains "forward-looking statements" which are not purely historical and may include any statements regarding beliefs, plans, expectations, or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs and results of new business opportunities and words such as "anticipate", "seek", intend", "believe", "estimate", "expect", "project", "plan", or similar phrases may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects, the future U.S. and global economies, the impact of competition, and the Company's reliance on existing regulations regarding the use and development of cannabis-based drugs.

These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate.

Investors should review all the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission. For more information, please visit www.sec.gov.