Is a Second Spinoff in the Works for North American Cannabis Holdings Inc (OTCMKTS:USMJ)?

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Shares of North American Cannabis Holdings Inc (OTCMKTS:USMJ) were flat on Tuesday at $0.00040 and unchanged in after-hours trading. The company has a market cap of $14,800 at 36.88 million shares outstanding. Share prices have been trading in a 52-week range of $0.00 to $0.00.

North American Cannabis Holdings Inc has entered into the marijuana industry in 2013 to pilot various cannabis sector enterprises and now it is well-positioned to take advantage of the expected boom. The market is expected to grow to $20 billion by 2020 thanks to the November 8 vote that legalized the use of medical or recreational marijuana in several US states. Legislation is pending in Canada as well.

In its press release, North American Cannabis Holdings Inc announced that it is set to close the acquisition of controlling interest in Alternet Systems by December 20, 2016. These two companies have been collaborating since the start of the year on a retail cannabis payment system pilot. Alternet Systems is a company that develops and commercializes a growing portfolio of digital commerce technologies and already has a long-term track record in  financial services industry software solutions.

Just recently, Alternet Systems was able to develop  a unique financial services solution which was successfully sold for an ROI of 47%, with the same management involved in discussions with North American Cannabis Holdings Inc. Prior to this, the company established an agreement with Puration that enabled USMJ shareholders to receive stock in Puration through a dividend distribution. A similar arrangement is expected this time around that could yield significant returns for North American Cannabis Holdings Inc stocks.

Puration Inc is a water purification company, formerly known as Southwest Resources Inc. As such, it designs, develops, engineers, produces, markets and distributes personal and group systems that filter, purify, clean or extract water. The company has also developed, acquired and licensed technology in the fields of water filtration and purification and its operations consist of the design and production of personal-use water filter bottles and other containers. Aside from this, the company  is in the process of developing new business opportunities focusing on the Cannabis Extractions Sector.

North American Cannabis Holdings Inc has partnered with Puration under their  EVERx Sports and Fitness Nutritional Supplement Brand Name. These products will be targeted to athletes looking to enhance their performance, as CBD can substantially reduce recovery times and increase cardio output. Apart from that, CBD infused products can also target the general public that is becoming more aware of the health benefits of these products, such as mitigating diabetes risk and reducing cancer cells.

The partnership with Puration has led to a significant pickup in volume back in October while the November 8 elections also kept interest sustained throughout November. Price is retreating from its rally then but could be due for another break higher or a pickup in volume once the Alternet Systems acquisition deal is closed. Of course this hinges on the terms of the agreement and what shareholders could get in return.

From a longer-term outlook, USMJ shares are still seeing subdued trading activity but it wouldn’t be long before the company reaps the benefits from its partnerships and ventures in the marijuana industry. This stock could offer a low risk, high reward scenario once momentum picks up.

DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.