Last summer, The Fresh Toast reported on the purchase of an entire ghost town in California called Nipton. All 80 acres and the structures that called it home was purchased for $5 million by a company called American Green, one of the first publicly traded tech companies in the cannabis realm that now has over 50,000 individual shareholders. The company, which has been in business for nearly 20 years, has a lofty mission “to be the cannabis and industrial hemp industry, seed-to sale innovator.”
They wanted to turn the town into a marijuana destination, filled with edibles shops, retails stores, farms, artist in residence programs and a plant to make water infused with CBD.
And now, word has surfaced that American Green ran out of money and sold the town to another penny stock called Delta International Oil & Gas for nearly $8 million. According to a statement, American Green will continue to develop the project over the next five years with a five-year option.
At closing, Delta will assume approximately $3.73 Million in American Green debt, and issue $4 Million in Delta “Series A Stock.”
Related Story: Cali Ghost Town To Become Inclusive Marijuana Destination
According to the statement, David Gwyther, American Green’s Chairman, said that the transaction will relieve American Green of the on-going expense of improving Nipton. “That responsibility will now fall upon Delta, giving Nipton the ability to access cheaper capital through a fully reporting company, including the ability to file registered offerings,” adding:
American Green can now expend less of its energy on capital raising, and focus on implementing the revenue-generating components of Nipton, and its other investments, along with many new, and exciting projects on the horizon.
I believe that this will be a win-win situation for American Green and our shareholders.
In a Q&A with NASDAQ after the sale was announced, American Green shared why they sold Nipton in the first place, saying that buying and building towns is very cash sensitive and that up until now, the cost of attracting capital has been very expensive for the company, due, in part to the fact that it’s is an unaudited, non-reporting “Pink Sheet” company. And that “Delta should have a much easier time raising money, at less cost, leading to a sizeable reduction in dilution for American Green and its shareholders.”