10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

FORM 10-Q 

(Mark One)
☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2017
r	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
	For the transition period from __________________ to ______________

Commission file number: 001-14088

Acacia Diversified Holdings, Inc.

(Exact name of small business issuer as specified in its charter)

Texas	75-2095676
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
13575 58th St. North #138  Clearwater, FL	33760
(Address of principal executive offices)	(Zip Code)

(727) 678-4420

(Registrant’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (1) Yes ☒  No r   (2) Yes ☒  No r

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒  No r

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer r	Accelerated filer r
Non-accelerated filer r	Smaller Reporting Company ☒
Emerging growth company  r

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes r  No ☒    

APPLICABLE ONLY TO CORPORATE ISSUERS 

State the number of shares outstanding of each of the issuer’s classes of common equity, as ofNovember 7, 2017 is 17,529,982 common shares.  

TABLE OF CONTENTS  

		Page
PART I. Financial Information
Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	5
Item 4.	Controls and Procedures	5
PART II. Other Information
Item 1.	Legal Proceedings	6
Item 1A.	Risk Factors	6
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6
Item 3.	Defaults Upon Senior Securities	6
Item 4.	Mine Safety Disclosures	6
Item 5.	Other Information	6
Item 6.	Exhibits	7
Signatures		8

PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

ACACIA DIVERSIFIED HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

	September 30, 2017			December 31, 2016
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	36,883		$	43,878
Accounts receivable		95,100			35,630
Inventories		57,471			63,085
Prepaid expenses and other current assets		13,536			60,502
Total Current Assets		202,990			203,095
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $166,762 and $108,886 in 2017 and 2016, respectively		474,890			480,847
OTHER ASSETS:
Deferred offering cost		240,900			-
Deposits		841			841
Total Other Assets		241,741			841
TOTAL ASSETS	$	919,621		$	684,783
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	61,605		$	69,938
Accrued expenses		276,685			320,592
Note payable to related party		558,400			-
Payable to related parties		65,984			4,000
Total Current Liabilities		962,674			394,530
Total Liabilities		962,674			394,530
Commitments and contingencies		-			-
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $0.001 par value; 150,000,000 shares authorized; 17,539,982 and 16,931,816 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		17,540			16,932
Additional paid-in capital		4,433,161			3,393,539
Accumulated deficit		(4,493,754	)		(3,120,218	)
Total Stockholders’ Equity (Deficit)		(43,053	)		290,253
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	919,621		$	684,783

The accompanying notes are an integral part of these consolidated financial statements.

F-1

ACACIA DIVERSIFIED HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
REVENUE	$	63,772		$	9,726		$	344,133		$	235,092
COSTS OF GOODS SOLD
Costs of goods sold		700			29,231			129,338			107,488
Depreciation expense		18,297			18,020			54,400			52,827
		18,997			47,251			183,738			160,315
GROSS PROFIT (LOSS)		44,775			(37,525	)		160,395			74,777
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Employee compensation expenses		101,941			156,148			540,902			432,155
General and administrative expenses		83,418			168,428			569,754			524,455
Depreciation expense		969			1,135			4,227			3,759
		186,328			325,711			1,114,883			960,369
LOSS FROM OPERATIONS		(141,553	)		(363,236	)		(954,488	)		(885,592	)
OTHER INCOME (EXPENSES)
Loss on sale of equipment to related party		-			-			(4,249	)		(42,987	)
Interest expense		(13,178	)		(10	)		(416,311	)		(48	)
Other income		513			140			1,512			140
TOTAL OTHER EXPENSES		(12,665	)		130			(419,048	)		(42,895	)
NET LOSS BEFORE INCOME TAXES	$	(154,218	)	$	(363,106	)	$	(1,373,536	)	$	(928,487	)
Income taxes		-			-			-			-
NET LOSS	$	(154,218	)	$	(363,106	)	$	(1,373,536	)	$	(928,487	)
NET LOSS PER COMMON SHARE, BASIC AND DILUTED	$	(0.01	)	$	(0.02	)	$	(0.08	)	$	(0.06	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED		17,528,342			15,446,356			17,330,720			15,436,696

The accompanying notes are an integral part of these consolidated financial statements.

F-2

ACACIA DIVERSIFIED HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

(UNAUDITED)

	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,373,536	)	$	(928,487	)
Adjustments to reconcile net loss to net cash and cash equivalents used by operating activities:
Depreciation		58,627			56,945
Common stock issued for services		337,469			14,955
Employee stock plan		44,738			-
Common stock issued for interest		366,400			-
Amortization of debt discount		15,000			-
Loss on sale of equipment to related party		4,249			42,987
(Increase) decrease in:
Accounts receivable		(59,470	)		135,200
Inventories		5,614			(80,363	)
Prepaid expenses and other current assets		46,965			(9,905	)
Increase (decrease) in:
Accounts payable		(8,332	)		21,530
Accrued expenses		(20,557	)		7,874
Payable to related parties		89,984			-
Net cash used by operating activities		(492,849	)		(739,264	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(6,196	)		(35,414	)
Net cash used by investing activities		(6,196	)		(35,414	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from payable to related party		130,050			510,000
Payment on due to related party		(28,000	)		-
Proceeds from issuance of convertible note payable, net		85,000			-
Repayment on convertible note payable		(100,000	)		-
Proceeds from issuance of note payable to related party		405,000			-
Proceeds from issuance of common stock		-			150
Proceeds from reverse acquisition		-			180,854
Net cash provided by financing activities		492,050			691,004
Net change in cash and cash equivalents		(6,995	)		(83,674	)
Cash and cash equivalents, beginning of the period		43,878			221,174
Cash and cash equivalents, end of the period	$	36,883		$	137,500
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	5,000		$	48
Cash paid for income taxes	$	-		$	-
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Common stock issued for acquisition of property	$	50,723		$	-
Common stock issued for deferred offering cost	$	240,900		$	-
Consolidation of notes payable to related party, including accrued interest	$	153,400		$	-
Changes in operating assets and liabilities due to reverse acquisition:
Prepaid expenses	$	-		$	(3,434	)
Property and equipment	$	-		$	(95,860	)
Accumulated depreciation	$	-		$	44,332
Deposits	$	-		$	(841	)
Accounts payable	$	-		$	6,973
Additional paid-in capital	$	-		$	48,830

The accompanying notes are an integral part of these consolidated financial statements.

F-3

ACACIA DIVERSIFIED HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

NOTE 1 – THE COMPANY

Acacia Diversified Holdings, Inc. (“Acacia” or the “Company”) has three wholly-owned subsidiaries, MariJ Pharmaceuticals, Inc. (“MariJ Pharma”), Canna-Cures Research & Development Center, Inc. (“Canna-Cures”), and Eufloria Medical of Tennessee, Inc. (“EMT”), a company incorporated in the state of Tennessee. The Company formed this new subsidiary to acquire a parcel of land and a license from one of its directors.  See details in Note 4 - Related Party Transactions.

The Company’s primary source revenue is from the extraction of medicinal cannabis oil, from a non-psychoactive cannabis plant. All extraction services are currently limited to the State of Colorado, as the Company is attempting to obtain various licenses for business in the State of Florida.

NOTE 2 – GOING CONCERN

The Company has not generated profit to date. The Company expects to continue to incur operating losses as it proceeds with its extraction and research and development activities and continues to navigate through the regulatory process. The Company expects general and administrative costs to increase, as the Company adds personnel and other administrative expenses associated with its current efforts. As such, and without substantially increasing revenue or finding new sources of capital, the Company will find it difficult to continue to meet its obligations as they come due.  The Company continues to seek working capital but there can be no assurance that the Company will be successful in its efforts to raise capital, or if it were successful in raising capital, that it would be successful in meeting its business plans.  While the services performed by the Company’s MariJ Pharma subsidiary are anticipated to be sufficient to partly meet the Company’s liquidity needs, these factors raise substantial doubt as to the ability of the Company to continue as a going concern.  Management’s plans include increasing production at the Company’s MariJ Pharma subsidiary during 2017 and opening a retail store in Tennessee, attempting to start new businesses outside of Colorado, finding additional operational businesses to buy, and attempting to raise funds from the public through an equity offering of the Company’s common stock. Management intends to make every effort to identify and develop all these sources of funds, but there can be no assurance that Management’s plans will be successful.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses for all periods presented and has a substantial accumulated deficit. As of September 30, 2017, these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, which consist solely of normal recurring adjustments, needed to fairly present the financial results for these periods. The consolidated financial statements and notes thereto are presented as prescribed by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The accompanying consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2016 and notes thereto in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the Securities and Exchange Commission on March 28, 2017. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year. In the opinion of management, all adjustments have been made, which consist only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three and nine-month periods ended September 30, 2017 and 2016, (b) the financial position at September 30, 2017 and (c) cash flows for the nine-month periods ended September 30, 2017 and 2016.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Acacia Diversified Holdings, Inc. and its wholly-owned subsidiaries, MariJ Pharmaceuticals, Inc, Canna-Cures Research & Development Center, Inc., and Eufloria Medical of Tennessee, Inc. All significant intercompany accounts and transactions are eliminated in consolidation.

F-4

ACACIA DIVERSIFIED HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The actual results may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

RECLASSIFICATIONS

Certain prior year amounts shown in the accompanying consolidated financial statements have been reclassified to conform to the 2017 presentation. These reclassifications did not have any effect on total current assets, total assets, total current liabilities, total liabilities, total stockholders’ equity, net loss or loss per share.

DEBT ISSUANCE COSTS

In March 2017, the Company incurred direct costs associated with the issuance of a convertible note, as described in Note 6. The Company follows Accounting Standard Update 2015-03 – Simplifying the Presentation of Debt Issuance Costs, which requires these costs to be presented in the balance sheet as a direct reduction from the carrying value of the associated debt liability. These costs should be amortized into interest expense over the contractual term of the note or a shorter amortization period when deemed appropriate. The Company amortizes debt issuance costs for its convertible note immediately upon issuance since the note is convertible on demand.

OFFERING COSTS

In March 2017, the Company issued shares of its common stock to pay for direct incremental costs associated with the expected future sale of its equity securities, as described in Note 7. These shares are valued at their fair value on commitment date and are recorded as deferred offering costs on the Company’s consolidated balance sheets. These costs will offset any proceeds to be received in the future from the sale of common stock.

STOCK BASED COMPENSATION

The Company accounts for stock-based compensation under Accounting Standards Codification 718 - Compensation-Stock Compensation (“ASC 718”). ASC 718 requires that all stock-based compensation be recognized as expense in the financial statements and that such cost be measured at the fair value of the award at the grant date and recognized over the period during which an employee is required to provide services (requisite service period). An additional requirement of ASC 718 is that estimated forfeitures be considered in determining compensation expense. Estimating forfeitures did not have a material impact on the determination of compensation expense during the three and nine months ended September 30, 2017 and 2016.  

The Company accounts for stock based awards based on the fair market value of the instrument using a 10-day volume weighted adjusted price (VWAP) and accounts for stock options issued using the Black-Scholes option pricing model and utilizing certain assumptions including the followings:

Risk-free interest rate – This is the yield on U.S. Treasury Securities posted at the date of grant (or date of modification) having a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense.

Expected life—years – This is the period of time over which the options granted are expected to remain outstanding. Options granted by the Company had a maximum term of ten years. An increase in the expected life will increase compensation expense.

Expected volatility – Actual changes in the market value of stock are used to calculate the volatility assumption.  An increase in the expected volatility will increase compensation expense.

Dividend yield – This is the annual rate of dividends per share over the exercise price of the option. An increase in the dividend yield will decrease compensation expense.  The Company does not currently pay dividends and has no immediate plans to do so in the near future.

F-5

ACACIA DIVERSIFIED HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of Accounting Standards Codification 505-50, Equity – Based Payments to Non-Employees.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued.  The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. 

During the nine months ended September 30, 2017, the board of directors approved issuances of Company’s restricted common stock to consultants and non-employee directors for past and future services:

1. 10,000 shares to each director for services rendered for fiscal year 2016 and 10,000 shares for services to be rendered for fiscal year 2017, total 60,000 shares, valued at $99,000;

2. 17,646 shares to a consultant for investors relations services, valued at $30,000;

3. 50,000 shares to the Company’s SEC legal counsel for services performed, valued at $82,500;

4. 15,000 shares to a consultant for continuing services, valued at $23,400; and

5. 54,254 shares to a director as other considerations and to purchase and prepare assets acquired by the Company’s subsidiary, valued at $86,806.

The Company valued these shares at fair value on commitment dates and recorded stock based compensation expense over the respective requisite service periods. There was no share-based compensation expense for the three months ended September 30, 2017 and 2016. Share-based compensation expense for the nine months ended September 30, 2017 and 2016 was $321,706 and $0, respectively.

FAIR VALUE ESTIMATES – The Company measures assets and liabilities it acquires at fair value in accordance with Accounting Standards Codification 820 – Fair Value Measurement (“ASC 820”). The objective of ASC 820 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 specifies a valuation hierarchy based on whether the inputs to those valuation techniques are observable or unobservable.

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions. These two types of inputs have created the following fair value hierarchy:

· Level 1 – Quoted prices for identical instruments in active markets;

· Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and 

· Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when estimating fair value. 

During the nine months ended September 30, 2017, EMT acquired land and a license from one of the Company’s directors (NOTE 4). The Company determined that the fair value of the land is $26,194 which is a level 2 input.

F-6

ACACIA DIVERSIFIED HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

NOTE 4 – RELATED PARTY TRANSACTIONS

Notes Payable to Related Party

In January 2017, the Company entered into a note agreement in the amount of $300,000 with the Company’s CEO. The note bears interest at a rate of 8% per annum and specifies no due date. The Company accrued interest of $16,504 at September 30, 2017. Interest expense on this note for the three and nine months ended was $4,800 and $11,704, respectively. Concurrently, the board of directors also approved issuance of 100,000 shares of the Company’s common stock as additional interest. These shares were accounted for as debt issuance costs, valued at $182,000. The costs were expensed at the commitment date of the note as interest expense since the note is a short term capital advance with no stated term. This note was convertible into the shares of the Company’s common stock at $0.50/share. During the three months ended September 30, 2017, this note has been consolidated with other notes and advances from this related party. See Consolidated Note Payable to Related Party below.

In June 2017, the Company entered into a note agreement in the amount of $105,000 with the Company’s CEO for short term working capital advance. The note bears interest at a rate of 8% per annum and specifies no due date. This note was convertible into the shares of the Company’s common stock at $0.50/share. During the three months ended September 30, 2017, this note has been consolidated with other notes and advances from this related party. See Consolidated Note Payable to Related Party below.

Payable to Related Parties

Payable to related parties consisted of the followings at September 30, 2017 and December 31, 2016:

	September 30,		December 31,
	2017		2016
Short term loan from related entity (1)	$	35,348	$	-
Short term loan from related entity (1)		26,636		-
Storage and corporate housing and auto allowances owed to CEO (2)		4,000		4,000
Working capital advances from CEO (3)		-		-
	$	65,984	$	4,000

(1) In March 2017 and June 2017, the Company received a working capital advance of $35,348 and $39,000, respectively, from a related entity. These advances are non-interest bearing and were intended as short term capital advances. They have been included in payable to related parties on the consolidated balance sheet as current liabilities at September 30, 2017.

(2) On May 1, 2016, the Company entered into an employment agreement with its CEO. The term of the employment is through December 31, 2019. The agreement provides for a monthly storage and corporate housing allowance of $1,000 for a property owned by the CEO and a monthly automobile allowance of $1,000. During the three and nine months ended September 30, 2017, expenses related to the housing and automobile allowances totaled $6,000 and $18,000, respectively, of which $4,000 and $4,000 remained owed to the CEO at September 30, 2017 and December 31, 2016, respectively.

(3) In June 2017, the Company’s CEO provided the Company with a short term working capital advance of $130,050. This amount remained outstanding at June 30, 2017. During the three months ended September 30, 2017, this balance has been consolidated with other notes and advances from this related party. See Consolidated Note Payable to Related Party below.

F-7

ACACIA DIVERSIFIED HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

Consolidated Note Payable to Related Party

During the three months ended September 30, 2017, the board of directors approved the Company to enter into a consolidated note payable agreement to consolidate notes and advances received from a related party, including accrued interests on these notes.

Note Date	Note Amount		Accrued Interest
January 2017	$	300,000	$	16,504
June 2017		105,000		2,048
June 2017		130,050		2,564
Total notes and accrued interest			$	556,166
Expenses owed to related party				2,234
			$	558,400

The consolidated note payable bears interest at 8% and is due and payable on demand or first from any capital raised. The note is secured by a first lien on the assets of the Company and its subsidiaries.

Other Related Party Transactions

In March 2017, the Company’s board of directors approved issuance of 50,000 shares of the Company’s common stock to a director for his service in a financing transaction and the equity purchase agreement described in NOTES 6 and 7. The Company determined that 16,000 shares of the total number of shares represent non-cash debt issuance costs directly related to the convertible notes financing and the remaining 34,000 shares represent non-cash offering costs directly related to the equity purchase agreement with this investor. These shares are valued at $82,500.

In May 2017, the Company and EMT entered into an agreement to purchase a parcel of land in Tennessee and an Industrial Hemp Grower License issued by the Tennessee Department of Agriculture from one of the Company’s directors. The purchase price of the transaction was 80,000 shares of the Company’s restricted common stock. These shares were valued at $1.60 per share, or $128,000, on commitment date. EMT allocated the purchase price among the assets acquired based on their fair values as follow:

Land	$	26,194
Land preparation and cleanup		15,000
Industrial Hemp Grower License		-
Other considerations		86,806
Total Purchase Price	$	128,000

The Company determined the value of the land based on the purchase price paid by the director in December 2016. There has been no significant changes in the value of the land since that time. The Company estimated land preparation and cleanup costs at $15,000. The director applied for and paid a fee of $264 to obtain the license. The Company was not able to determine the value of the license since the license was granted as part of the hemp pilot program in Tennessee. The Company entered into this agreement with its director, in lieu of the state of Tennessee, as a result of the state’s residency requirement to enter into the program in Tennessee. As a result, this director is also a registered agent and a director of EMT, a Tennessee corporation. The remaining purchase price of $86,806 represented other considerations to this director for his effort in preparing the Company for operations in Tennessee. During the three months ended September 30, 2017, this director also incurred $7,760 of expenses in excavating and clearing of the land, installing driveway and calvary and completing the survey for excavation. The board of directors approved issuance of the Company’s common stock to compensate this director for his expenses at a rate of $0.50 per share for each dollar spent. As a result, the Company recorded its commitment to issue 15,520 shares of its common stock valued at $0.61 per share, for a total of $9,529.

F-8

ACACIA DIVERSIFIED HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

NOTE 5 – INVENTORIES

The Company’s inventories consisted of the followings at September 30, 2017 and December 31, 2016:

	September 30, 2017		December 31, 2016
Raw materials	$	46,880	$	52,363
Finished goods		10,591		10,722
	$	57,471	$	63,085

NOTE 6 – CONVERTIBLE NOTE PAYABLE

In  March 2017, the Company entered into a financing agreement with an investor whereby the Company will issue unsecured convertible note agreements to the investor in the aggregate principal amount of $400,000 at 10% discount. The financing will be funded in tranches, each with the issuance of a separate convertible note agreement by the Company.

On March 31, 2017, the Company issued the first convertible note agreement (“first note”) in the principal amount of $100,000 at 10% discount. The first note matures on March 31, 2019 and is convertible into the Company’s common stock at a conversion price of $1.60 per share if no event of default has occurred and is converted prior to 180 days after the issuance date. If an event of default has occurred or the date of conversion is 180 days after the issuance date, the conversion price will be the lesser of $1.60 per share, or 70% of the second lowest closing bid price of the Company’s common stock for the 20 trading days immediately preceding the date of the conversion. In connection with the issuance of the first note, the Company paid $2,500 of commitment fee to the investor and $2,500 legal fees. Therefore, the Company received net proceeds of $85,000 at closing.

The Company’s board of directors approved issuance of 50,000 shares of the Company’s common stock to a director for his service as a broker for the transaction. The Company determined that 16,000 shares of the total number of shares represent non-cash debt issuance costs directly related to the convertible notes financing and the remaining 34,000 shares represent non-cash offering costs directly related to the sale of the Company’s common stock to this investor (see NOTE 7). As a result, the debt discount of $10,000, commitment fee of $2,500, legal fee of $2,500, commission to a third party consultant of $5,950 and the non-cash debt issuance costs of $26,400, totaling $47,350, were recorded as a direct reduction from the carrying value of the principal amount in the consolidated balance sheet at the time of the agreement. These costs were amortized as interest expense immediately upon issuance because the first note was immediately convertible by the note holder. The principle amount of $100,000 was repaid in June 2017 together with interest expense of $5,000.

As of September 30, 2017, the Company did not receive additional funding from the investor and therefore, no additional convertible note agreement was issued.

NOTE 7 – STOCKHOLDERS’ EQUITY

Common Stock

The Company has been authorized to issue 150,000,000 shares of common stock, $.001 par value.  Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution.

During the nine months ended September 30, 2017, the Company issued 608,166 shares of its restricted common stock as follows:

1) 10,000 shares to each director for services rendered for fiscal year 2016 and 10,000 shares for services to be rendered for fiscal year 2017, total 60,000 shares, valued at $99,000;

2) 17,646 shares to a consultant for investors relations services, valued at $30,000;

3) 50,000 shares to the Company’s SEC legal counsel for services performed, valued at $82,500;

4) 10,000 shares to an employee for services performed, valued at $12,800;

5) 110,000 shares to an investor and its affiliate as offering costs, valued at $184,800;

F-9

ACACIA DIVERSIFIED HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(UNAUDITED)

6) 50,000 shares to a director for services rendered in the convertible note and equity purchase agreement transactions, valued at $82,500;

7) 100,000 shares issued as debt issuance cost to CEO for related party advances, valued at $182,000;

8) 100,000 shares issued as interest expense to CEO for related party advances, valued at $158,000;

9) 15,000 shares to a consultant for continuing services, valued at $23,400; and

10) 80,000 shares to a director as other considerations and to purchase and prepare assets acquired by the Company’s subsidiary, valued at $128,000.

11) 15,520 shares to a director for expenses incurred related to land excavation and clean up, valued at $9,529.

Warrants and Options

At September 30, 2017, 75,000 options were outstanding and no warrants were outstanding. The Company did not issue any common stock purchase warrants or options during the nine months ended September 30, 2017 and 2016.

Equity Purchase Agreement

In March 2017, the Company entered into an equity purchase agreement (“agreement”) with an investor whereby the investor will purchase up to $5,000,000 of the Company’s common stock over a period of 24 months from the effective date of the Company’s Registration Statement. The investor will purchase the Company’s common stock at a 10% discount. Pursuant to the agreement, the Company issued to the investor, and its affiliate, 110,000 shares of its common stock as commitment fee. These shares are valued at $184,800 at the commitment date and are recorded as deferred offering costs on the Company’s consolidated balance sheets. These costs will offset any proceeds to be received in the future from the expected sale of common stock.

The Company’s board of directors approved issuance of 50,000 shares of the Company’s common stock to a director for his service as a broker of the transaction. The Company determined that 34,000 shares of the total number of shares approved for issuance represent non-cash offering costs directly related the sale of the Company’s common stock to this investor. These shares are valued at $56,100 on commitment date are recorded as deferred offering costs on the Company’s consolidated balance sheets. These costs will offset any proceeds to be received in the future from the expected sale of common stock.

Restricted Stock Awards to Key Employees

In  March 2017, the board of directors approved issuance of 100,000 shares of the Company’s restricted common stock to each of its three key employees. As of the date of the issuance of the financial statements, only two key employees accepted the award. The award for the employees are subject to a four or five-year vesting requirements, i.e. the requisite service period. The shares are issued as the vesting restriction lapses. The Company valued these shares at fair value on commitment date which is the date on which the employee accepted the award and recorded stock based compensation expense over the requisite service period.  During the nine months ended September 30, 2017, the board of directors approved issuance of 10,000 shares of the Company’s common stock to one of the key employees as the vesting requirement was met. These shares were valued at $12,800 on commitment date. Stock based compensation expense for these awards for the three and nine months ended September 30, 2017 was $17,877 and $60,501, respectively.

NOTE 8 – SUBSEQUENT EVENTS

In July 2017, the Company closed its retail location in the state of Colorado and retained all its inventory. The Company anticipates relocating its retail operation to Tennessee. The Company does not anticipate incurring significant costs in connection with this closure.

In October, 2017, EMT entered into a lease for its retail space in Tennessee for a period of 24 months, commencing 60 days after the landlord delivers the premise to tenant. Base rent for the first 12 months is $2,500 per month and $2,550 per month for the next 12 months.

NOTE 9 – RECENT ACCOUNTING PRONOUNCEMENTS

Except as noted in our Form 10-K, the Company’s management does not believe that recent codified pronouncements by the Financial Accounting Standards Board (“FASB”) (including its EITF), the AICPA or the Securities and Exchange Commission will have a material impact on the Company’s current or future consolidated financial statements.

F-10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Information

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statementswithin the meaning of the Private Litigation Reform Act of 1995 that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “may”, “will”, “should”, “could”, “predicts”, “potential”, “proposed”, or “continue” or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements due to numerous factors, including, but not limited to, availability of financing for operations, successful performance of operations, impact of competition and other risks detailed below as well as those discussed elsewhere in this Form 10-Q and from time to time in the Company’s Securities and Exchange Commission filings and reports.  In addition, general economic and market conditions and growth rates could affect such statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

General

These unaudited interim consolidated financial statements should be read in conjunction with the annual financial statements for the Company most recently completed fiscal year ended December 31, 2016. These unaudited interim consolidated financial statements do not include all disclosures required in annual financial statements, but rather are prepared in accordance with recommendations for interim financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These unaudited interim consolidated financial statements have been prepared using the same accounting policies and methods as those used by the Company in the annual audited financial statements for the year ended December 31, 2016.

Discussion on the Company’s Operations and Recent Event

MariJ Pharmaceuticals, Inc.

MariJ Pharma has a mobile CO2, supercritical extraction unit which was USDA certified Organic on September 28th, 2016, by OneCert, under the US National Organic Program; 7 CFR PART 205. MariJ Pharma extracts and processes very high quality, high-cannabinoid profile content medical grade cannabis oils from medicinal cannabis plants.  As such, MariJ Pharma is authorized to process directly for certified organic farms and is able to produce certified organic cannabis oils.

The Company intends to acquire, through its MariJ Pharma subsidiary, portions or complete ownership of licenses and grow operations in one or more states and seeking to cultivate, organically extract and process its medicinal cannabis crops year round in indoor facilities.  The acquisition of these licenses is anticipated to provide the Company with the opportunity to compound medicinal products using mixtures of high cannabinoid profile oils that have very little hallucinogenic properties but have significantly improved medicinal properties.

In addition, MariJ Pharma has the technical expertise and capability to process and formulate the oils and to employ them in its compounding operations.  MariJ Pharma will seek to become engaged as owner or co-owner of a grow facility in Florida or other location(s) such as to produce its own plants for processing. MariJ Pharma has also been preparing for its newly-developed, proprietary GeoTraking Technology that is fully compliant with the Health Insurance Portability and Accountability standard (“HIPAA”) utilizing its “plant to patient” solution. This GeoTraking Technology is designed to provide a full-channel patient care tracking system that is fully compliant under today’s strict HIPAA regulations that require privacy and security of the patients’ information. Beginning with RFID labeling and tracking of every single seed employed in the grow program and continuing through the sale of prescription products in a sophisticated retail Point of Sale delivery system, the GeoTraking Technology will be one of the most advanced system available.

The Company’s primary source of revenue is from the extraction of medicinal cannabis oil, from a non-psychoactive cannabis plant.

1

All extraction services are currently limited to the State of Colorado, as the Company is attempting to attain various licenses for business in the State of Florida.

It is anticipated that MariJ Pharma could generate revenues from the following activities:

1) Cannabis oil extraction and processing - MariJ Pharma has a unique mobile cannabis oil processing and extraction unit designed into a heavy-duty truck chassis.  The unit has already begun performing extractions and processing of medical hemp oils at various sites in Colorado, and MariJ Pharma is currently developing additional contracts for services.

2) Wholesale sale of raw and processed medical cannabis oils.

3) Laboratory testing and certification services – As the demand for these services grows in the medical cannabis industry, MariJ Pharma is uniquely positioned to fulfill the growing demand for these services by utilizing its existing mobile laboratory and testing unit built on a heavy-duty truck chassis.

4) Licensing and support of the Company’s GeoTraking Technology systems.

5) Processing and compounding services for medical grade cannabis oils.

The Company is preparing to seek additional investments and financing to pay the costs of constructing its second mobile oil extraction and processing unit, to finance final construction of its mobile laboratory and testing unit for the same industry, and to complete the roll-out of its GeoTraking Technology system. However, there can be no assurance that the Company will be successful in its plans to generate the required capital.

Canna-Cures Research and Development Center, Inc.

In August 2016, Canna-Cures began engaging in product development activities as well as retail distribution of medicinal Hemp products in Colorado.  In July 2017, Canna-Cures closed its retail operations in Colorado and retained all its inventory as the Company begins to focus its developmental activities in Tennessee.

Eufloria Medical of Tennessee, Inc.

In addition to our current extraction operations in the State of Colorado, the Company has been invited to be part of the hemp pilot program in Tennessee. This program provides the Company the license to grow, manufacture, and dispense USDA organic hemp oil in Tennessee and represents the first step in moving its operations to the east coast of the United States. The Company plans on participating in this pilot program through this new, wholly-owned subsidiary.

The Company also acquired land in Tennessee and has completed excavation and other cleanup activities to prepare the land for its intended use.

EMT will seek to align itself with institutions of higher learning in working to develop new products and to identify and develop additional uses for its medical cannabis products. It is anticipated that EMT could generate revenues from the following activities:

1) EMT will seek to enter into product development projects with institutions of higher learning in efforts to develop new and better strains of medical cannabis related products for dispensing as medications, nutraceuticals, cosmeceuticals, and probably dietary supplements.  EMT anticipates participating in state and federal grants in conjunction with one or more universities as a means to defray part of its costs in these efforts.

2) Private label packaging services - the Company has obtained a majority of the equipment required to engage in the business of packaging and labeling of medical cannabis oils, oil-infused products, and related items.

3) Retail sales of medical cannabis oils, oil-infused products, and other merchandise through its web-based portal or retail dispensaries planned for that purpose.  These activities are dependent in large part upon meeting FDA regulations and criteria relating to the sale and distribution of cannabis-infused products, and the Company is currently in the process of determining the status of those criteria.

4) Retail and wholesale sales of cosmeceutical and nutraceutical products and dietary supplements containing its high-quality cannabis oil extracts, subject to compliance with FDA and other regulations.

5) Growing high quality cannabis plants and extracting oil for sale or for manufacturing of oil-infused products.

The Company will require additional capital to execute these plans and there can be no assurance that the Company will be successful in its plans to generate that capital.

2

Operating results for the three months ended September 30, 2017 and 2016:

For the three months ended September 30, 2017, the Company generated revenues of $63,772 from operations, compared to $9,726 for the three months ended September 30, 2016, an increase of $54,046 or 556%. Revenues from 2016 were from the sales of the Company’s retail store in Colorado which opened in the third quarter of 2016. Revenues from 2017 were primarily from extraction services performed.

For the three months ended September 30, 2017, costs of goods sold was $18,997, compared to $47,251 for the three months ended September 30, 2016, a decrease of $28,254, or 60%. The decrease in our costs is primarily related to the non-recognition and reversal of non-cash stock based compensation expense from a unvested restricted stock award granted to our extraction technician. In addition, salary expense for extraction technicians also decreased due to completion of an extraction services contract during the three months ended September 30, 2017.

As a result of the changes in revenues and costs of goods sold discussed above, the Company’s gross profit increased from a loss of $37,525 for the three months ended September 30, 2016 to $44,775, or 70% of revenues for the three months ended September 30, 2017.

For the three months ended September 30, 2017, selling, general and administrative expenses were $186,328, compared to $325,711 during the three months ended September 30, 2016, a decrease of $139,383, or 43%. The decrease in these expenses are attributable to (1) a decrease in employee compensation expenses due to higher executive compensation in prior period and the closing of our Colorado retail operation, and (2) a decrease in general administrative expenses primarily due to fewer legal activities during the current period.

During the three months ended September 30, 2017, the Company incurred interest expense of $13,178, compared to $10 for the three months ended September 30, 2016. During the current period, the Company accrued $13,178 of interest expense on the notes payable to related party. There were no such liabilities existed at September 30, 2016.

As a result of the changes in revenues, costs and expenses, the Company incurred a net loss of $154,218 for the three months ended September 30, 2017, compared to a net loss of $363,106 for the three months ended September 30, 2016.

The future trends of all expenses are expected to be primarily driven by the Company’s ability to execute its business plans and the future outcome of its application to obtain operating licenses in other states. As the cannabis industry grows, additional expenses are anticipated to be incurred in complying with various state and federal regulatory requirements. The Company’s ability to continue to fund operating expenses will depend on its ability to raise additional capital. There can be no assurance that the Company will be successful in doing so.

Operating results for the nine months ended September 30, 2017 and 2016:

For the nine months ended September 30, 2017, the Company generated revenues of $344,133 from operations, compared to $235,092 for the nine months ended September 30, an increase of $109,041 or 46%.  The increase in revenues is primarily attributable to the increase in processing and revenues generated from its retail store operations in Colorado.

For the nine months ended September 30, 2017, costs of goods sold was $183,738, compared to $160,315 for the nine months ended September 30, 2016, an increase of $23,423, or 15%. The increase in our costs is primarily related to production based bonuses, recognition of non-cash stock based compensation expense from a restricted stock award granted to our extraction technician and costs of goods sold in our retail store in Colorado.

As a result of the changes in revenues and costs of goods sold discussed above, the Company’s gross profit increased from $74,777 for the nine months ended September 30, 2016 to $160,395, or 47% of revenues for the nine months ended September 30, 2017.

For the nine months ended September 30, 2017, selling, general and administrative expenses were $1,114,883, compared to $960,369 during the nine months ended September 30, 2016, an increase of $154,514, or 16%. The increase in these expenses are attributable to (1) an increase in employee compensation expenses in Canna-Cures which did not begin operations until third quarter of 2016, the hiring of additional administrative staff, stock based compensation to employee, and accrual of bonuses for current management, and (2) an increase in general administrative expenses primarily due to stock based compensation to board of directors, third party vendors and outside counsel, and increase in professional fees.

3

During the nine months ended September 30, 2017, the Company incurred interest expense of $416,311, compared to $48 for the nine months ended September 30, 2016. During the current period, the Company paid interest in the amount of $5,000 to the convertible note holder, accrued $23,961 of interest expense on the notes payable to related party, issued common stock valued at $366,400 as interest to a related party for working capital advances and as debt issuance costs related to the issuance of the convertible note payable and $20,950 as cash debt discount.  There were no such liabilities existed at September 30, 2016.

As a result of the changes in revenues, costs and expenses, the Company incurred a net loss of $1,373,536 for the nine months ended September 30, 2017, compared to a net loss of $928,487 for the nine months ended September 30, 2016.

The future trends of all expenses are expected to be primarily driven by the Company’s ability to execute its business plans and the future outcome of its application to obtain operating licenses in other states. As the cannabis industry grows, additional expenses are anticipated to be incurred in complying with various state and federal regulatory requirements. The Company’s ability to continue to fund operating expenses will depend on its ability to raise additional capital. There can be no assurance that the Company will be successful in doing so.

Liquidity and Capital Resources

The Company’s cash position at September 30, 2017 decreased by $6,995 to $36,883, as compared to a balance of $43,878, as of December 31, 2016. The net decrease in cash for the nine months ended September 30, 2017 was attributable to net cash used in operating activities of $492,849, net cash used in investing activities of $6,196, offset by net cash provided by financing activities of $492,050.

As of September 30, 2017, the Company had negative working capital of $759,684 compared to negative working capital of $191,435, at December 31, 2016, a decrease of $568,249, attributable primarily to issuance of notes payable to its CEO and amounts owed to related parties for working capital advances.

Net cash used in operating activities of $492,849 during the nine months ended September 30, 2017, was lower compared to the prior period of $739,264, primarily due to higher net loss, offset by (i) non-cash items such as common stock issued for services and interest and amortization of debt discount and (ii) changes in operating assets and liabilities, including an increase in payable to related parties.

Net cash used in investing activities of $6,196 for the nine months ended September 30, 2017 was lower compared to $35,414 for the nine months ended September 30, 2016. This is primarily due to purchases of extraction equipment in the prior period as the Company began to provide extraction services for its customer.

Net cash provided by financing activities of $492,050 during the nine months ended September 30, 2017 decreased by $198,954 compared to $691,004 during the nine months ended September 30, 2016. The decrease in net cash provided by financing activities was primarily attributable to a reduction in net proceeds from the reverse acquisition.

During the nine months ended September 30, 2017, the Company also issued 41,266 shares of its common stock to acquire, prepare, and cleanup a parcel of land from one of its directors. These shares are valued at $50,723. The Company also issued 144,000 shares of its common stock as costs directly related to entering into the equity purchase agreement with an investor. These shares were valued at $240,900. In addition, accrued interest on notes payable to related party of $21,117, accrued expense of $2,234 and related party advances of $130,050, totaling $153,400 was consolidated with existing notes payable to related party of $405,000, into one single note payable to related party of $558,000.

During the three months ended September 30, 2017, the board of directors approved the Company to enter into a consolidated note payable agreement to consolidate notes and advances received from a related party, including accrued interests on these notes.

Note Date	Note Amount		Accrued Interest
January 2017	$	300,000	$	16,504
June 2017		105,000		2,048
June 2017		130,050		2,564
Total notes and accrued interest			$	556,166
Expenses owed to related party				2,234
			$	558,400

The consolidated note payable bears interest at 8% and is due and payable on demand or first from any capital raised. The note is secured by a first lien on the assets of the Company and its subsidiaries.

4

As reported in the accompanying consolidated financial statements, for the nine months ended September 30, 2017 and 2016, the Company incurred net losses of $1,373,536 and $928,487, respectively. The Company did not produce significant revenues in the periods presented and has sustained operating losses since inception. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital, obtain licenses to commence operations in states outside of Colorado and achieve a level of profitability. Until recently where the Company obtained working capital from convertible notes financing and equity purchase agreement with an outside investor, the Company has financed its activities principally from working capital advances from related parties and issuing notes payable to its CEO since inception. It intends to finance its future operating activities and its working capital needs largely from proceeds from the convertible notes agreement, the sale of equity securities, combined with additional funding from its CEO. The sale of equity and convertible notes financing agreements may result in dilution to stockholders and those securities may have rights senior to those of common shares. If the Company raises additional funds through the issuance of convertible notes or other debt financing, these activities or other debt could contain covenants that would restrict the Company’s operations. Any other third-party funding arrangements could require the Company to relinquish valuable rights. The Company will require additional capital beyond its currently anticipated needs. Additional capital, if available, may not be available on reasonable terms or at all.

The Company has not generated significant revenue to date, and will not generate significant revenue in the foreseeable future. The Company expects to continue to incur operating losses as it proceeds with its pursuit of operating licenses in various states. The future trends of all expenses are expected to be primarily driven by the Company’s ability to execute its business plans and the future outcome of its application to obtain operating licenses in other states. As the cannabis industry grows, additional expenses are anticipated to be incurred in complying with various regulatory requirements. The Company’s ability to continue to fund operating expenses will depend on its ability to raise additional capital. There can be no assurance that the Company will be successful in doing so.

Financial Condition

The Company’s total assets at September 30, 2017 and December 31, 2016 were $919,621 and $684,783, respectively, an increase of $234,838. Total liabilities at September 30, 2017 and December 31, 2016 were $962,674 and $394,530, respectively, an increase of $568,144. The significant change in the Company’s financial condition is attributable to (i) issuance of note payable to a related party, (ii) increase in working capital advances from related parties, (iii) payment of accrued expenses of $43,907, and (iv) incurring deferred offering cost of $240,900. As a result of these transactions, the Company’s cash position decreased from $43,878 to $36,883 during the nine months ended September 30, 2017.

Off-Balance Sheet Arrangements

We have made no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2017. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2017, the Company’s disclosure controls and procedures were not effective. The controls were determined to be ineffective due to the lack of segregation of duties. In January 2017, the Company hired a part-time financial controller to assist with technical accounting issues and the preparation of the filings. However, until the Company begins generating sufficient revenues, it is unable to remediate the weakness. Despite the existence of material weaknesses, management believes the financial information presented herein is materially correct and fairly presents the financial position and operating results of the three months ended September 30, 2017, in accordance with U.S. GAAP.

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the three months ended September 30, 2017, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

5

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.

None.

Item 1A.  Risk Factors

The Company is a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

During the nine months ended September 30, 2017, the Company issued 608,166 shares of its restricted common stock as follows:

1) 10,000 shares to each director for services rendered for fiscal year 2016 and 10,000 shares for services to be rendered for fiscal year 2017, total 60,000 shares, valued at $99,000;

2) 17,646 shares to a consultant for investors relations services, valued at $30,000;

3) 50,000 shares to the Company’s SEC legal counsel for services performed, valued at $82,500;

4) 10,000 shares to an employee for services performed, valued at $12,800;

5) 110,000 shares to an investor and its affiliate as offering costs, valued at $184,800;

6) 50,000 shares to a director for services rendered in the convertible note and equity purchase agreement transactions, valued at $82,500;

7) 100,000 shares issued as debt issuance cost to CEO for related party advances, valued at $182,000;

8) 100,000 shares issued as interest expense to CEO for related party advances, valued at $158,000;

9) 15,000 shares to a consultant for continuing services, valued at $23,400; and

10) 80,000 shares to a director as other considerations and to purchase and prepare assets acquired by the Company’s subsidiary, valued at $128,000.

11) 15,520 shares to a director for expenses incurred related to land excavation and clean up, valued at $9,529.

The shares of our common stock were issued pursuant to an exemption from registration in Section 4(a)(2) of the Securities Act of 1933.  These shares of our common stock qualified for exemption under Section 4(a)(2) of the Securities Act of 1933 since the issuance of shares by us did not involve a public offering.  The offering was not a “public offering” as defined in Section 4(a)(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered.  We did not undertake an offering in which we sold a high number of shares to a high number of investors.  In addition, these shareholders had necessary investment intent as required by Section 4(a)(2) since they agreed to receive share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Act.  This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.”  All shareholders are “sophisticated investors” and are business acquaintances of our officers and directors.  Based on an analysis of the above factors, we believe we have met the requirements to qualify for exemption under section 4(a)(2) of the Securities Act of 1933 for this transaction.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

6

Item 6. Exhibits

Exhibits required by Item 601, Regulation S-K;

Exhibit Number and Description				Location Reference
	(3.0)	Articles of Incorporation
		(3.1)	Articles Of Amendment And Restated Articles Of Incorporation of Acacia Diversified Holdings, Inc. dated June 9, 2015	See Exhibit Key
		(3.2)	Restated Bylaws Of Acacia Diversified Holdings, Inc. dated June 29, 2015	See Exhibit Key
	(9.0)	Voting Proxy Agreement between Rick Pertile and Steven L. Sample		See Exhibit Key
	(10.1)	Consolidated Loan Agreement		See Exhibit Key
	(10.2)	Consolidated Promissory Note		See Exhibit Key
	(10.3)	Security Agreement – Acacia Diversified Holdings, Inc.		See Exhibit Key
	(10.4)	Security Agreement -- Marij Agriculture, Inc.		See Exhibit Key
	(10.5)	Security Agreement – Marij Pharmaceuticals, Inc.		See Exhibit Key
	(10.6)	Security Agreement – CannaCures Research & Development Center, Inc.		See Exhibit Key
	(14.0)	Code of Ethics		Filed herewith
	(21.0)	List of Subsidiaries		See Exhibit Key
	(31.1)	Certificate of Chief Executive Officer And Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		Filed herewith
	(32.1)	Certification of Chief Executive Officer And Chief Financial Officer Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		Filed herewith
	101.INS	XBRL Instance Document
	101.SCH	XBRL Taxonomy Extension Schema Document
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit Key

3.1 Incorporated by reference herein from the Company’s Form 8-K filed on July 16, 2015.

3.2 Incorporated by reference herein from the Company’s Form 8-K filed on July 16, 2015.

9.0 Incorporated by reference herein from the Company’s Form 10-K filed on March 28, 2017.

10.1 Incorporated by reference herein from the Company’s Form 8-K filed on November 3, 2017.

10.2 Incorporated by reference herein from the Company’s Form 8-K filed on November 3, 2017.

10.3 Incorporated by reference herein from the Company’s Form 8-K filed on November 3, 2017.

10.4 Incorporated by reference herein from the Company’s Form 8-K filed on November 3, 2017.

10.5 Incorporated by reference herein from the Company’s Form 8-K filed on November 3, 2017.

10.6 Incorporated by reference herein from the Company’s Form 8-K filed on November 3, 2017.

21.0 Incorporated by reference herein from the Company’s Form 10-Q filed on August 7, 2017.

7

SIGNATURES

Pursuant to the requirements of the Securities exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned.

	Acacia Diversified Holdings, Inc.
Date: November 13, 2017	By:	/s/ Richard K. Pertile
		Richard K. Pertile
		Chief Executive Officer, Principal Executive Officer
		Chief Financial Officer and Principal Financial Officer

8

EX-14

EXHIBIT 14

ACACIA DIVERSIFIED HOLDINGS, INC.

Code of Business Conduct and Ethics

(Adopted by the Board of Directors on November 6,2017)

INTRODUCTION

This Code of Business Conduct and Ethics covers a wide range of business practices and procedures. It does not cover every issue that may arise but it sets out basic principles to guide all employees of Acacia Diversified Holdings, Inc. and its subsidiaries, if any (the “Company”). All of our officers, directors and employees must conduct themselves accordingly and seek to avoid even the appearance of improper behavior. The code should also be provided to and followed by the Company’s agents and representatives, including consultants.

If a law conflicts with a policy in this Code, you must comply with the law. If you have any questions about these conflicts, you should ask your supervisor how to handle the situation.

Those who violate standards in this Code will be subject to disciplinary action, up to and including termination of employment. If you are in a situation that you believe may violate or lead to a violation of this Code, follow the guidelines described in Section 14 of this Code.

1.COMPLIANCE WITH LAWS, RULES AND REGULATIONS

Obey the law, both in letter and in spirit, is the foundation on which our ethical standards are built. All employees must respect and obey the laws of the cities, states and countries in which we operate. Although not all employees are expected to know the details of these laws, it is important to know enough about them to determine when to seek advice from supervisors, managers or other appropriate personnel.

2.CONFLICTS OF INTEREST

A “conflict of interest” exists when a person’s private interests interferes in any way with the interests of the Company. A conflict situation can arise when an employee, officer or director takes actions or has interests that may make it difficult to perform his or her Company work objectively and efficiently. Conflicts of interest may also arise when an employee, officer or director, or members of his or her family, receives improper personal benefits as a result of his or her position in the Company. Loans to, or guarantees of obligations of, employees and their family members may create conflicts of interest.

It is almost always a conflict of interest for a Company employee to work simultaneously for a competitor, customer or supplier. You are not allowed to work for a competitor as a consultant or board member. The best policy is to avoid any direct or indirect business connection with our customers, suppliers or competitors, except on our behalf.  Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by our Board of Directors. Conflicts of interest may not always be clear-cut, so if you have a question, you should consult with higher levels of management. Any employee, officer or director who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, a manager, or other appropriate personnel, or consult with the procedures described in Section 14 of this Code.

3.INSIDER TRADING

Employees who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business. All non-public information about the Company should be considered confidential information. To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical but also illegal.

4.CORPORATE OPPORTUNITIES

Employees, officer and directors are prohibited from taking for themselves personally, opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors. No employee may use corporate property, information or position for improper personal gain, and no employee may compete with the Company, directly or indirectly.

5.COMPETITION AND FAIR DEALING

We seek to outperform our competition fairly and honestly. Stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent, or inducing such disclosures by past or present employees of other companies is prohibited. Each officer, director and employee should respect the rights of and deal fairly with the Company’s customers, suppliers, competitors and employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift, or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent, unless it (a) is not in cash, (b) is consistent with customary business practices, (c) is not excessive in value, (d) cannot be construed as a bribe or payoff and (e) does not violate any laws or regulations. Please discuss with your supervisor any gifts or proposed gifts that you are not certain are appropriate.

6.DISCRIMINATION AND HARASSMENT

The diversity of the Company’s employees is a tremendous asset. We are firmly committed to providing equal opportunity in all respects aspects of employment and will not tolerate illegal discrimination or harassment of any kind. Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances.

7.HEALTH AND SAFETY

The Company strives to provide each employee with a safe and healthy work environment. Each employee has responsibility for maintaining a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.

Violence and threatening behavior are not permitted. Employees should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol. The use of alcohol and/or illegal drugs in the workplace will not be tolerated.

8.RECORD-KEEPING

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. For example, only the true and actual number of hours worked should be reported.

Many employees regularly use business expense accounts, which must be documented and recorded accurately. If you are not sure whether a certain expense is legitimate, ask your supervisor or the Company’s controller or chief financial officer.

All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform to both applicable legal requirements and to the Company’s systems of accounting and internal controls. Unrecorded or “off the books” finds or assets should not be maintained unless permitted by applicable laws or regulations.

Business records and communications often become public, and we should avoid exaggeration, derogatory remarks, guesswork or inappropriate characterizations of people and companies that can be misunderstood. This applies equally to e-mail, internal memos and formal reports. Records should always be retained or destroyed according to the Company’s record retention policies. In accordance with these policies, in the event of litigation or governmental investigation please consultant your supervisor. All e-mail communications are the property of the Company and employees, officers and directors should not expect that Company or personal e-mail communications are private. All e-mails are the property of the Company. No employee, officer or director shall use Company computers, including to access the internet, for personal or non-Company business.

9.CONFIDENTIALITY

Employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, except when disclosure is required by laws or regulations. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers, if disclosed. It also includes information that suppliers and customers have entrusted to us. The obligation to preserve confidential information continues even after employment ends. In connection with this obligation, employees, officers and directors may be required to execute confidentiality agreements confirming their agreement to be bound not to disclose confidential information. If you are uncertain whether particular information is confidential or non-public, please consult your supervisor.

10.PROTECTION AND PROPER USE OF COMPANY ASSETS

All officers, directors and employees should endeavor to protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Company equipment should not be used for non-Company business.

The obligation of officers, directors and employees to protect the Company’s assets includes it proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil or even criminal penalties.

11.PAYMENTS TO GOVERNMENT PERSONNEL

The Unites States Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country.

In addition, the U. S. government has a number of laws and regulations regarding business gratuities that may be accepted by U. S. government personnel. The promise, offer or delivery to an official or employee of the U. S. government of a gift, favor or other gratuity in violation of these rules would not only violate Company policy, but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules.

12.WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS

Any waiver of the provisions of this Code may be made only by the Board of Directors and will be promptly disclosed as required by law or stock exchange rule or regulation.

13.REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR

Employees are encouraged to talk with supervisors, managers or Company officials about observed illegal or unethical behavior, and when in doubt about the best course of action in a particular situation. It is the Company’s policy not to allow retaliation for reports of misconduct by others made in good faith by employees. Employees are expected to cooperate in internal investigations of misconduct, and the failure to do so could serve as grounds for termination.

Any employee may submit a good faith concern regarding questionable accounting or auditing matters without fear of dismissal or retaliation of any kind.

14.COMPLIANCE PROCEDURES

We must all work to ensure prompt and consistent action against violations of this Code. However, in some situations, it is difficult to know if a violation has occurred. Since we cannot anticipate every situation that may arise, it is important that we have a way to approach a new question or problem. These are steps to keep in mind:

Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.

•Ask yourself, what specifically you are being asked to do - doesit seem unethical or improper?  This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.

•Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed?  It may help to get others involved and discuss the problem.

Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process.  Keep in mind that it is your supervisor’s responsibility to help solve problems. If your supervisor does not or cannot remedy the situation, or you are uncomfortable bringing the problem to the attention of your supervisor, bring the issue to the attention of the human resources supervisor, or to an officer of the Company.

You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The Company does not permit retaliation of any kind for good faith reports of ethical violations.

Always ask first,act later. If you are unsure of what to do in any situation, seek guidance before you act.

ACACIA DIVERSIFIED HOLDINGS, INC.

Code of Ethics forthe President

and Senior Financial Officers

(Adopted by the Board of Directors on November 6, 2017)

Acacia Diversified Holdings, Inc. (the “Company”) has a Code of Business Conduct and Ethics applicable to all employees, officers and directors of the Company. The President, Chief Executive Officer (“CEO”) and senior financial officers who are in place at any given time in the employ of the Company are bound by the provisions set forth therein relating to ethical conduct, conflicts of interest and compliance with law. In addition to the Code of Business Conduct and Ethics, the President, CEO and senior financial officers who are in place at any given time in the employ of the Company are also subject to the following specific policies:

1.The President, CEO and senior financial officers in the employ of the Company are responsible for full, fair, accurate, timely and understandable disclosure in the periodic reports and other filings required to be made by the Company with the Securities and Exchange Commission. Accordingly, it is the responsibility of the President, CEO and senior financial officers in the employ of the Company to promptly to bring to the attention of the Board of Directors any material information of which he or she may become aware that affects the disclosures made by the Company in its public filings or otherwise impairs the ability of the Company to make full, fair, accurate, timely and understandable public disclosures.

2.The President, CEO and senior financial officers in the employ of the Company shall promptly bring to the attention of the Company’s Audit Committee any information he or she may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls.

3.The President, CEO and senior financial officers in the employ of the Company shall promptly bring to the attention of the Board of Directors and the Audit Committee any information he or she may have concerning any violation of the Company’s Code of Business Conduct and Ethics, including any actual or apparent conflicts of interest between personal and professional relationships, involving management or other employees who have a significant rule in the Company’s financial reporting, disclosures or internal controls.

4.The President, CEO and senior financial officers in the employ of the Company shall promptly bring to the attention of the Board of Directors and Audit Committee any information he or she may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business, by the Company or any agent thereof, or of violation of the Code of Business Conduct and Ethics or of these additional procedures.

5.The Board of Directors shall determine, or designate appropriate persons to determine, appropriate actions to be taken in the event of violations of the Code of Business Conduct and Ethics of these additional procedures by the CEO and the Company’s senior financial officers. Such actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to the Code of Business Conduct and Ethics and to these additional procedures, and shall include written notices to the individual involved that the Board has determined that there has been a violation, censure by the Board, demotion or reassignment of the individual involved, suspension with or without pay or benefits (as determined by the Board) and termination of the individual’s employment. In determining what action is appropriate in a particular case, the Board of Directors or such designee shall take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action and whether or not the individual in question had committed other violations in the past.

ADOPTED AND APPROVED this 6th day of November 2017.

ACACIA DIVERSIFIED HOLDINGS, INC.

/s/: Richard K. Pertile

Richard K. Pertile,

Chairman of the Board of Directors

EX-31.1

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certifications

 I, Richard K. Pertile, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Acacia Diversified Holdings, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based upon such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:    November 13, 2017   

By:  /s/ Richard K. Pertile                               

Richard K. Pertile

Chief Executive Officer and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification of Chief Executive Officer and Chief Financial Officer

pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

regarding Quarterly Report on Form 10-Q for the quarter ended September 30, 2017

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Acacia Diversified Holdings, Inc., a Texas corporation (the "Company"), does hereby certify that:

1.  The Company's Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2017, (the Form 10-Q) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.  Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  November 13, 2017	By:	/s/ Richard K. Pertile
		Richard K. Pertile
		Chief Executive Officer and Chief Financial Officer

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 07, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Acacia Diversified Holdings, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		17,529,982
Amendment Flag	false
Entity Central Index Key	0001001463
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 36,883	$ 43,878
Accounts receivable	95,100	35,630
Inventories	57,471	63,085
Prepaid expenses and other current assets	13,536	60,502
Total Current Assets	202,990	203,095
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $166,762 and $108,886 in 2017 and 2016, respectively	474,890	480,847
OTHER ASSETS:
Deferred offering cost	240,900	0
Deposits	841	841
Total Other Assets	241,741	841
TOTAL ASSETS	919,621	684,783
CURRENT LIABILITIES:
Accounts payable	61,605	69,938
Accrued expenses	276,685	320,592
Note payable to related party	558,400	0
Payable to related parties	65,984	4,000
Total Current Liabilities	962,674	394,530
Total Liabilities	962,674	394,530
Commitments and contingencies
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $0.001 par value; 150,000,000 shares authorized; 17,539,982 and 16,931,816 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	17,540	16,932
Additional paid-in capital	4,433,161	3,393,539
Accumulated deficit	(4,493,754)	(3,120,218)
Total Stockholders’ Equity (Deficit)	(43,053)	290,253
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$ 919,621	$ 684,783

XML

CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Accumulated depreciation (in Dollars)	$ 166,762	$ 108,886
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	17,539,982	16,931,816
Common stock, shares outstanding	17,539,982	16,931,816

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
REVENUE	$ 63,772	$ 9,726	$ 344,133	$ 235,092
COSTS OF GOODS SOLD
Costs of goods sold	700	29,231	129,338	107,488
Depreciation expense	18,297	18,020	54,400	52,827
	18,997	47,251	183,738	160,315
GROSS PROFIT (LOSS)	44,775	(37,525)	160,395	74,777
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Employee compensation expenses	101,941	156,148	540,902	432,155
General and administrative expenses	83,418	168,428	569,754	524,455
Depreciation expense	969	1,135	4,227	3,759
	186,328	325,711	1,114,883	960,369
LOSS FROM OPERATIONS	(141,553)	(363,236)	(954,488)	(885,592)
OTHER INCOME (EXPENSES)
Loss on sale of equipment to related party	0	0	(4,249)	(42,987)
Interest expense	(13,178)	(10)	(416,311)	(48)
Other income	513	140	1,512	140
TOTAL OTHER EXPENSES	(12,665)	130	(419,048)	(42,895)
NET LOSS BEFORE INCOME TAXES	(154,218)	(363,106)	(1,373,536)	(928,487)
Income taxes	0	0	0	0
NET LOSS	$ (154,218)	$ (363,106)	$ (1,373,536)	$ (928,487)
NET LOSS PER COMMON SHARE, BASIC AND DILUTED (in Dollars per share)	$ (0.01)	$ (0.02)	$ (0.08)	$ (0.06)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED (in Shares)	17,528,342	15,446,356	17,330,720	15,436,696

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,373,536)	$ (928,487)
Adjustments to reconcile net loss to net cash and cash equivalents used by operating activities:
Depreciation	58,627	56,945
Common stock issued for services	337,469	14,955
Employee stock plan	44,738	0
Common stock issued for interest	366,400	0
Amortization of debt discount	15,000	0
Loss on sale of equipment to related party	4,249	42,987
(Increase) decrease in:
Accounts receivable	(59,470)	135,200
Inventories	5,614	(80,363)
Prepaid expenses and other current assets	46,965	(9,905)
Increase (decrease) in:
Accounts payable	(8,332)	21,530
Accrued expenses	(20,557)	7,874
Payable to related parties	89,984	0
Net cash used by operating activities	(492,849)	(739,264)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(6,196)	(35,414)
Net cash used by investing activities	(6,196)	(35,414)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from payable to related party	130,050	510,000
Payment on due to related party	(28,000)	0
Proceeds from issuance of convertible note payable, net	85,000	0
Repayment on convertible note payable	(100,000)	0
Proceeds from issuance of note payable to related party	405,000	0
Proceeds from issuance of common stock	0	150
Proceeds from reverse acquisition	0	180,854
Net cash provided by financing activities	492,050	691,004
Net change in cash and cash equivalents	(6,995)	(83,674)
Cash and cash equivalents, beginning of the period	43,878	221,174
Cash and cash equivalents, end of the period	36,883	137,500
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	5,000	48
Cash paid for income taxes	0	0
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Common stock issued for acquisition of property	50,723	0
Common stock issued for deferred offering cost	240,900	0
Consolidation of notes payable to related party, including accrued interest	153,400	0
Changes in operating assets and liabilities due to reverse acquisition:
Prepaid expenses	0	(3,434)
Property and equipment	0	(95,860)
Accumulated depreciation	0	44,332
Deposits	0	(841)
Accounts payable	0	6,973
Additional paid-in capital	$ 0	$ 48,830

XML

NOTE 1 - THE COMPANY

9 Months Ended

Sep. 30, 2017

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 – THE COMPANY

Acacia Diversified Holdings, Inc. (“Acacia” or the “Company”) has three wholly-owned subsidiaries, MariJ Pharmaceuticals, Inc. (“MariJ Pharma”), Canna-Cures Research & Development Center, Inc. (“Canna-Cures”), and Eufloria Medical of Tennessee, Inc. (“EMT”), a company incorporated in the state of Tennessee. The Company formed this new subsidiary to acquire a parcel of land and a license from one of its directors.  See details in Note 4 - Related Party Transactions.

The Company’s primary source revenue is from the extraction of medicinal cannabis oil, from a non-psychoactive cannabis plant. All extraction services are currently limited to the State of Colorado, as the Company is attempting to obtain various licenses for business in the State of Florida.

XML

NOTE 2 - GOING CONCERN

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Substantial Doubt about Going Concern [Text Block]

NOTE 2 – GOING CONCERN

The Company has not generated profit to date. The Company expects to continue to incur operating losses as it proceeds with its extraction and research and development activities and continues to navigate through the regulatory process. The Company expects general and administrative costs to increase, as the Company adds personnel and other administrative expenses associated with its current efforts. As such, and without substantially increasing revenue or finding new sources of capital, the Company will find it difficult to continue to meet its obligations as they come due.  The Company continues to seek working capital but there can be no assurance that the Company will be successful in its efforts to raise capital, or if it were successful in raising capital, that it would be successful in meeting its business plans.  While the services performed by the Company’s MariJ Pharma subsidiary are anticipated to be sufficient to partly meet the Company’s liquidity needs, these factors raise substantial doubt as to the ability of the Company to continue as a going concern.  Management’s plans include increasing production at the Company’s MariJ Pharma subsidiary during 2017 and opening a retail store in Tennessee, attempting to start new businesses outside of Colorado, finding additional operational businesses to buy, and attempting to raise funds from the public through an equity offering of the Company’s common stock. Management intends to make every effort to identify and develop all these sources of funds, but there can be no assurance that Management’s plans will be successful.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses for all periods presented and has a substantial accumulated deficit. As of September 30, 2017, these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

XML

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, which consist solely of normal recurring adjustments, needed to fairly present the financial results for these periods. The consolidated financial statements and notes thereto are presented as prescribed by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The accompanying consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2016 and notes thereto in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the Securities and Exchange Commission on March 28, 2017. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year. In the opinion of management, all adjustments have been made, which consist only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three and nine-month periods ended September 30, 2017 and 2016, (b) the financial position at September 30, 2017 and (c) cash flows for the nine-month periods ended September 30, 2017 and 2016.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Acacia Diversified Holdings, Inc. and its wholly-owned subsidiaries, MariJ Pharmaceuticals, Inc, Canna-Cures Research & Development Center, Inc., and Eufloria Medical of Tennessee, Inc. All significant intercompany accounts and transactions are eliminated in consolidation.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The actual results may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

RECLASSIFICATIONS

Certain prior year amounts shown in the accompanying consolidated financial statements have been reclassified to conform to the 2017 presentation. These reclassifications did not have any effect on total current assets, total assets, total current liabilities, total liabilities, total stockholders’ equity, net loss or loss per share.

DEBT ISSUANCE COSTS

In March 2017, the Company incurred direct costs associated with the issuance of a convertible note, as described in Note 6. The Company follows Accounting Standard Update 2015-03 – Simplifying the Presentation of Debt Issuance Costs, which requires these costs to be presented in the balance sheet as a direct reduction from the carrying value of the associated debt liability. These costs should be amortized into interest expense over the contractual term of the note or a shorter amortization period when deemed appropriate. The Company amortizes debt issuance costs for its convertible note immediately upon issuance since the note is convertible on demand.

OFFERING COSTS

In March 2017, the Company issued shares of its common stock to pay for direct incremental costs associated with the expected future sale of its equity securities, as described in Note 7. These shares are valued at their fair value on commitment date and are recorded as deferred offering costs on the Company’s consolidated balance sheets. These costs will offset any proceeds to be received in the future from the sale of common stock.

STOCK BASED COMPENSATION

The Company accounts for stock-based compensation under Accounting Standards Codification 718 - Compensation-Stock Compensation (“ASC 718”). ASC 718 requires that all stock-based compensation be recognized as expense in the financial statements and that such cost be measured at the fair value of the award at the grant date and recognized over the period during which an employee is required to provide services (requisite service period). An additional requirement of ASC 718 is that estimated forfeitures be considered in determining compensation expense. Estimating forfeitures did not have a material impact on the determination of compensation expense during the three and nine months ended September 30, 2017 and 2016.  

The Company accounts for stock based awards based on the fair market value of the instrument using a 10-day volume weighted adjusted price (VWAP) and accounts for stock options issued using the Black-Scholes option pricing model and utilizing certain assumptions including the followings:

Risk-free interest rate – This is the yield on U.S. Treasury Securities posted at the date of grant (or date of modification) having a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense.

Expected life—years – This is the period of time over which the options granted are expected to remain outstanding. Options granted by the Company had a maximum term of ten years. An increase in the expected life will increase compensation expense.

Expected volatility – Actual changes in the market value of stock are used to calculate the volatility assumption.  An increase in the expected volatility will increase compensation expense.

Dividend yield – This is the annual rate of dividends per share over the exercise price of the option. An increase in the dividend yield will decrease compensation expense.  The Company does not currently pay dividends and has no immediate plans to do so in the near future.

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of Accounting Standards Codification 505-50, Equity – Based Payments to Non-Employees.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued.  The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. 

During the nine months ended September 30, 2017, the board of directors approved issuances of Company’s restricted common stock to consultants and non-employee directors for past and future services:

1. 10,000 shares to each director for services rendered for fiscal year 2016 and 10,000 shares for services to be rendered for fiscal year 2017, total 60,000 shares, valued at $99,000;

2. 17,646 shares to a consultant for investors relations services, valued at $30,000;

3. 50,000 shares to the Company’s SEC legal counsel for services performed, valued at $82,500;

4. 15,000 shares to a consultant for continuing services, valued at $23,400; and

5. 54,254 shares to a director as other considerations and to purchase and prepare assets acquired by the Company’s subsidiary, valued at $86,806.

The Company valued these shares at fair value on commitment dates and recorded stock based compensation expense over the respective requisite service periods. There was no share-based compensation expense for the three months ended September 30, 2017 and 2016. Share-based compensation expense for the nine months ended September 30, 2017 and 2016 was $321,706 and $0, respectively.

FAIR VALUE ESTIMATES – The Company measures assets and liabilities it acquires at fair value in accordance with Accounting Standards Codification 820 – Fair Value Measurement (“ASC 820”). The objective of ASC 820 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 specifies a valuation hierarchy based on whether the inputs to those valuation techniques are observable or unobservable.

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions. These two types of inputs have created the following fair value hierarchy:

· Level 1 – Quoted prices for identical instruments in active markets;

· Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and 

· Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when estimating fair value. 

During the nine months ended September 30, 2017, EMT acquired land and a license from one of the Company’s directors (NOTE 4). The Company determined that the fair value of the land is $26,194 which is a level 2 input.

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NOTE 4 - RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 4 – RELATED PARTY TRANSACTIONS

Notes Payable to Related Party

In January 2017, the Company entered into a note agreement in the amount of $300,000 with the Company’s CEO. The note bears interest at a rate of 8% per annum and specifies no due date. The Company accrued interest of $16,504 at September 30, 2017. Interest expense on this note for the three and nine months ended was $4,800 and $11,704, respectively. Concurrently, the board of directors also approved issuance of 100,000 shares of the Company’s common stock as additional interest. These shares were accounted for as debt issuance costs, valued at $182,000. The costs were expensed at the commitment date of the note as interest expense since the note is a short term capital advance with no stated term. This note was convertible into the shares of the Company’s common stock at $0.50/share. During the three months ended September 30, 2017, this note has been consolidated with other notes and advances from this related party. See Consolidated Note Payable to Related Party below.

In June 2017, the Company entered into a note agreement in the amount of $105,000 with the Company’s CEO for short term working capital advance. The note bears interest at a rate of 8% per annum and specifies no due date. This note was convertible into the shares of the Company’s common stock at $0.50/share. During the three months ended September 30, 2017, this note has been consolidated with other notes and advances from this related party. See Consolidated Note Payable to Related Party below.

Payable to Related Parties

Payable to related parties consisted of the followings at September 30, 2017 and December 31, 2016:

	September 30,		December 31,
	2017		2016
Short term loan from related entity (1)	$	35,348	$	-
Short term loan from related entity (1)		26,636		-
Storage and corporate housing and auto allowances owed to CEO (2)		4,000		4,000
Working capital advances from CEO (3)		-		-
	$	65,984	$	4,000

(1) In March 2017 and June 2017, the Company received a working capital advance of $35,348 and $39,000, respectively, from a related entity. These advances are non-interest bearing and were intended as short term capital advances. They have been included in payable to related parties on the consolidated balance sheet as current liabilities at September 30, 2017.

(2) On May 1, 2016, the Company entered into an employment agreement with its CEO. The term of the employment is through December 31, 2019. The agreement provides for a monthly storage and corporate housing allowance of $1,000 for a property owned by the CEO and a monthly automobile allowance of $1,000. During the three and nine months ended September 30, 2017, expenses related to the housing and automobile allowances totaled $6,000 and $18,000, respectively, of which $4,000 and $4,000 remained owed to the CEO at September 30, 2017 and December 31, 2016, respectively.

(3) In June 2017, the Company’s CEO provided the Company with a short term working capital advance of $130,050. This amount remained outstanding at June 30, 2017. During the three months ended September 30, 2017, this balance has been consolidated with other notes and advances from this related party. See Consolidated Note Payable to Related Party below.

Consolidated Note Payable to Related Party

During the three months ended September 30, 2017, the board of directors approved the Company to enter into a consolidated note payable agreement to consolidate notes and advances received from a related party, including accrued interests on these notes.

Note Date	Note Amount		Accrued Interest
January 2017	$	300,000	$	16,504
June 2017		105,000		2,048
June 2017		130,050		2,564
Total notes and accrued interest			$	556,166
Expenses owed to related party				2,234
			$	558,400

The consolidated note payable bears interest at 8% and is due and payable on demand or first from any capital raised. The note is secured by a first lien on the assets of the Company and its subsidiaries.

Other Related Party Transactions

In March 2017, the Company’s board of directors approved issuance of 50,000 shares of the Company’s common stock to a director for his service in a financing transaction and the equity purchase agreement described in NOTES 6 and 7. The Company determined that 16,000 shares of the total number of shares represent non-cash debt issuance costs directly related to the convertible notes financing and the remaining 34,000 shares represent non-cash offering costs directly related to the equity purchase agreement with this investor. These shares are valued at $82,500.

In May 2017, the Company and EMT entered into an agreement to purchase a parcel of land in Tennessee and an Industrial Hemp Grower License issued by the Tennessee Department of Agriculture from one of the Company’s directors. The purchase price of the transaction was 80,000 shares of the Company’s restricted common stock. These shares were valued at $1.60 per share, or $128,000, on commitment date. EMT allocated the purchase price among the assets acquired based on their fair values as follow:

Land	$	26,194
Land preparation and cleanup		15,000
Industrial Hemp Grower License		-
Other considerations		86,806
Total Purchase Price	$	128,000

The Company determined the value of the land based on the purchase price paid by the director in December 2016. There has been no significant changes in the value of the land since that time. The Company estimated land preparation and cleanup costs at $15,000. The director applied for and paid a fee of $264 to obtain the license. The Company was not able to determine the value of the license since the license was granted as part of the hemp pilot program in Tennessee. The Company entered into this agreement with its director, in lieu of the state of Tennessee, as a result of the state’s residency requirement to enter into the program in Tennessee. As a result, this director is also a registered agent and a director of EMT, a Tennessee corporation. The remaining purchase price of $86,806 represented other considerations to this director for his effort in preparing the Company for operations in Tennessee. During the three months ended September 30, 2017, this director also incurred $7,760 of expenses in excavating and clearing of the land, installing driveway and calvary and completing the survey for excavation. The board of directors approved issuance of the Company’s common stock to compensate this director for his expenses at a rate of $0.50 per share for each dollar spent. As a result, the Company recorded its commitment to issue 15,520 shares of its common stock valued at $0.61 per share, for a total of $9,529.

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NOTE 5 - INVENTORIES

9 Months Ended

Sep. 30, 2017

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

NOTE 5 – INVENTORIES

The Company’s inventories consisted of the followings at September 30, 2017 and December 31, 2016:

	September 30, 2017		December 31, 2016
Raw materials	$	46,880	$	52,363
Finished goods		10,591		10,722
	$	57,471	$	63,085

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NOTE 6 - CONVERTIBLE NOTE PAYABLE

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE 6 – CONVERTIBLE NOTE PAYABLE

In  March 2017, the Company entered into a financing agreement with an investor whereby the Company will issue unsecured convertible note agreements to the investor in the aggregate principal amount of $400,000 at 10% discount. The financing will be funded in tranches, each with the issuance of a separate convertible note agreement by the Company.

On March 31, 2017, the Company issued the first convertible note agreement (“first note”) in the principal amount of $100,000 at 10% discount. The first note matures on March 31, 2019 and is convertible into the Company’s common stock at a conversion price of $1.60 per share if no event of default has occurred and is converted prior to 180 days after the issuance date. If an event of default has occurred or the date of conversion is 180 days after the issuance date, the conversion price will be the lesser of $1.60 per share, or 70% of the second lowest closing bid price of the Company’s common stock for the 20 trading days immediately preceding the date of the conversion. In connection with the issuance of the first note, the Company paid $2,500 of commitment fee to the investor and $2,500 legal fees. Therefore, the Company received net proceeds of $85,000 at closing.

The Company’s board of directors approved issuance of 50,000 shares of the Company’s common stock to a director for his service as a broker for the transaction. The Company determined that 16,000 shares of the total number of shares represent non-cash debt issuance costs directly related to the convertible notes financing and the remaining 34,000 shares represent non-cash offering costs directly related to the sale of the Company’s common stock to this investor (see NOTE 7). As a result, the debt discount of $10,000, commitment fee of $2,500, legal fee of $2,500, commission to a third party consultant of $5,950 and the non-cash debt issuance costs of $26,400, totaling $47,350, were recorded as a direct reduction from the carrying value of the principal amount in the consolidated balance sheet at the time of the agreement. These costs were amortized as interest expense immediately upon issuance because the first note was immediately convertible by the note holder. The principle amount of $100,000 was repaid in June 2017 together with interest expense of $5,000.

As of September 30, 2017, the Company did not receive additional funding from the investor and therefore, no additional convertible note agreement was issued.

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NOTE 7 - SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2017

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 7 – STOCKHOLDERS’ EQUITY

Common Stock

The Company has been authorized to issue 150,000,000 shares of common stock, $.001 par value.  Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution.

During the nine months ended September 30, 2017, the Company issued 608,166 shares of its restricted common stock as follows:

1) 10,000 shares to each director for services rendered for fiscal year 2016 and 10,000 shares for services to be rendered for fiscal year 2017, total 60,000 shares, valued at $99,000;

2) 17,646 shares to a consultant for investors relations services, valued at $30,000;

3) 50,000 shares to the Company’s SEC legal counsel for services performed, valued at $82,500;

4) 10,000 shares to an employee for services performed, valued at $12,800;

5) 110,000 shares to an investor and its affiliate as offering costs, valued at $184,800;

6) 50,000 shares to a director for services rendered in the convertible note and equity purchase agreement transactions, valued at $82,500;

7) 100,000 shares issued as debt issuance cost to CEO for related party advances, valued at $182,000;

8) 100,000 shares issued as interest expense to CEO for related party advances, valued at $158,000;

9) 15,000 shares to a consultant for continuing services, valued at $23,400; and

10) 80,000 shares to a director as other considerations and to purchase and prepare assets acquired by the Company’s subsidiary, valued at $128,000.

11) 15,520 shares to a director for expenses incurred related to land excavation and clean up, valued at $9,529.

Warrants and Options

At September 30, 2017, 75,000 options were outstanding and no warrants were outstanding. The Company did not issue any common stock purchase warrants or options during the nine months ended September 30, 2017 and 2016.

Equity Purchase Agreement

In March 2017, the Company entered into an equity purchase agreement (“agreement”) with an investor whereby the investor will purchase up to $5,000,000 of the Company’s common stock over a period of 24 months from the effective date of the Company’s Registration Statement. The investor will purchase the Company’s common stock at a 10% discount. Pursuant to the agreement, the Company issued to the investor, and its affiliate, 110,000 shares of its common stock as commitment fee. These shares are valued at $184,800 at the commitment date and are recorded as deferred offering costs on the Company’s consolidated balance sheets. These costs will offset any proceeds to be received in the future from the expected sale of common stock.

The Company’s board of directors approved issuance of 50,000 shares of the Company’s common stock to a director for his service as a broker of the transaction. The Company determined that 34,000 shares of the total number of shares approved for issuance represent non-cash offering costs directly related the sale of the Company’s common stock to this investor. These shares are valued at $56,100 on commitment date are recorded as deferred offering costs on the Company’s consolidated balance sheets. These costs will offset any proceeds to be received in the future from the expected sale of common stock.

Restricted Stock Awards to Key Employees

In  March 2017, the board of directors approved issuance of 100,000 shares of the Company’s restricted common stock to each of its three key employees. As of the date of the issuance of the financial statements, only two key employees accepted the award. The award for the employees are subject to a four or five-year vesting requirements, i.e. the requisite service period. The shares are issued as the vesting restriction lapses. The Company valued these shares at fair value on commitment date which is the date on which the employee accepted the award and recorded stock based compensation expense over the requisite service period.  During the nine months ended September 30, 2017, the board of directors approved issuance of 10,000 shares of the Company’s common stock to one of the key employees as the vesting requirement was met. These shares were valued at $12,800 on commitment date. Stock based compensation expense for these awards for the three and nine months ended September 30, 2017 was $17,877 and $60,501, respectively.

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NOTE 8 - SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 8 – SUBSEQUENT EVENTS

In July 2017, the Company closed its retail location in the state of Colorado and retained all its inventory. The Company anticipates relocating its retail operation to Tennessee. The Company does not anticipate incurring significant costs in connection with this closure.

In October, 2017, EMT entered into a lease for its retail space in Tennessee for a period of 24 months, commencing 60 days after the landlord delivers the premise to tenant. Base rent for the first 12 months is $2,500 per month and $2,550 per month for the next 12 months.

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NOTE 9 - RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2017

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

NOTE 9 – RECENT ACCOUNTING PRONOUNCEMENTS

Except as noted in our Form 10-K, the Company’s management does not believe that recent codified pronouncements by the Financial Accounting Standards Board (“FASB”) (including its EITF), the AICPA or the Securities and Exchange Commission will have a material impact on the Company’s current or future consolidated financial statements.

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

BASIS OF PRESENTATION

The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, which consist solely of normal recurring adjustments, needed to fairly present the financial results for these periods. The consolidated financial statements and notes thereto are presented as prescribed by Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The accompanying consolidated financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2016 and notes thereto in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the Securities and Exchange Commission on March 28, 2017. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year. In the opinion of management, all adjustments have been made, which consist only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three and nine-month periods ended September 30, 2017 and 2016, (b) the financial position at September 30, 2017 and (c) cash flows for the nine-month periods ended September 30, 2017 and 2016.

Consolidation, Policy [Policy Text Block]

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Acacia Diversified Holdings, Inc. and its wholly-owned subsidiaries, MariJ Pharmaceuticals, Inc, Canna-Cures Research & Development Center, Inc., and Eufloria Medical of Tennessee, Inc. All significant intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The actual results may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Reclassification, Policy [Policy Text Block]

RECLASSIFICATIONS

Certain prior year amounts shown in the accompanying consolidated financial statements have been reclassified to conform to the 2017 presentation. These reclassifications did not have any effect on total current assets, total assets, total current liabilities, total liabilities, total stockholders’ equity, net loss or loss per share.

Debt, Policy [Policy Text Block]

DEBT ISSUANCE COSTS

In March 2017, the Company incurred direct costs associated with the issuance of a convertible note, as described in Note 6. The Company follows Accounting Standard Update 2015-03 – Simplifying the Presentation of Debt Issuance Costs, which requires these costs to be presented in the balance sheet as a direct reduction from the carrying value of the associated debt liability. These costs should be amortized into interest expense over the contractual term of the note or a shorter amortization period when deemed appropriate. The Company amortizes debt issuance costs for its convertible note immediately upon issuance since the note is convertible on demand.

Offering Costs, Policy [Policy Text Block]

OFFERING COSTS

In March 2017, the Company issued shares of its common stock to pay for direct incremental costs associated with the expected future sale of its equity securities, as described in Note 7. These shares are valued at their fair value on commitment date and are recorded as deferred offering costs on the Company’s consolidated balance sheets. These costs will offset any proceeds to be received in the future from the sale of common stock.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

STOCK BASED COMPENSATION

The Company accounts for stock-based compensation under Accounting Standards Codification 718 - Compensation-Stock Compensation (“ASC 718”). ASC 718 requires that all stock-based compensation be recognized as expense in the financial statements and that such cost be measured at the fair value of the award at the grant date and recognized over the period during which an employee is required to provide services (requisite service period). An additional requirement of ASC 718 is that estimated forfeitures be considered in determining compensation expense. Estimating forfeitures did not have a material impact on the determination of compensation expense during the three and nine months ended September 30, 2017 and 2016.  

The Company accounts for stock based awards based on the fair market value of the instrument using a 10-day volume weighted adjusted price (VWAP) and accounts for stock options issued using the Black-Scholes option pricing model and utilizing certain assumptions including the followings:

Risk-free interest rate – This is the yield on U.S. Treasury Securities posted at the date of grant (or date of modification) having a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense.

Expected life—years – This is the period of time over which the options granted are expected to remain outstanding. Options granted by the Company had a maximum term of ten years. An increase in the expected life will increase compensation expense.

Expected volatility – Actual changes in the market value of stock are used to calculate the volatility assumption.  An increase in the expected volatility will increase compensation expense.

Dividend yield – This is the annual rate of dividends per share over the exercise price of the option. An increase in the dividend yield will decrease compensation expense.  The Company does not currently pay dividends and has no immediate plans to do so in the near future.

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of Accounting Standards Codification 505-50, Equity – Based Payments to Non-Employees.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued.  The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. 

During the nine months ended September 30, 2017, the board of directors approved issuances of Company’s restricted common stock to consultants and non-employee directors for past and future services:

1. 10,000 shares to each director for services rendered for fiscal year 2016 and 10,000 shares for services to be rendered for fiscal year 2017, total 60,000 shares, valued at $99,000;

2. 17,646 shares to a consultant for investors relations services, valued at $30,000;

3. 50,000 shares to the Company’s SEC legal counsel for services performed, valued at $82,500;

4. 15,000 shares to a consultant for continuing services, valued at $23,400; and

5. 54,254 shares to a director as other considerations and to purchase and prepare assets acquired by the Company’s subsidiary, valued at $86,806.

The Company valued these shares at fair value on commitment dates and recorded stock based compensation expense over the respective requisite service periods. There was no share-based compensation expense for the three months ended September 30, 2017 and 2016. Share-based compensation expense for the nine months ended September 30, 2017 and 2016 was $321,706 and $0, respectively.

Fair Value of Financial Instruments, Policy [Policy Text Block]

FAIR VALUE ESTIMATES – The Company measures assets and liabilities it acquires at fair value in accordance with Accounting Standards Codification 820 – Fair Value Measurement (“ASC 820”). The objective of ASC 820 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 specifies a valuation hierarchy based on whether the inputs to those valuation techniques are observable or unobservable.

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions. These two types of inputs have created the following fair value hierarchy:

· Level 1 – Quoted prices for identical instruments in active markets;

· Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and 

· Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when estimating fair value. 

During the nine months ended September 30, 2017, EMT acquired land and a license from one of the Company’s directors (NOTE 4). The Company determined that the fair value of the land is $26,194 which is a level 2 input.

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NOTE 4 - RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

Payable to related parties consisted of the followings at September 30, 2017 and December 31, 2016:

	September 30,		December 31,
	2017		2016
Short term loan from related entity (1)	$	35,348	$	-
Short term loan from related entity (1)		26,636		-
Storage and corporate housing and auto allowances owed to CEO (2)		4,000		4,000
Working capital advances from CEO (3)		-		-
	$	65,984	$	4,000

(1) In March 2017 and June 2017, the Company received a working capital advance of $35,348 and $39,000, respectively, from a related entity. These advances are non-interest bearing and were intended as short term capital advances. They have been included in payable to related parties on the consolidated balance sheet as current liabilities at September 30, 2017.

(2) On May 1, 2016, the Company entered into an employment agreement with its CEO. The term of the employment is through December 31, 2019. The agreement provides for a monthly storage and corporate housing allowance of $1,000 for a property owned by the CEO and a monthly automobile allowance of $1,000. During the three and nine months ended September 30, 2017, expenses related to the housing and automobile allowances totaled $6,000 and $18,000, respectively, of which $4,000 and $4,000 remained owed to the CEO at September 30, 2017 and December 31, 2016, respectively.

(3) In June 2017, the Company’s CEO provided the Company with a short term working capital advance of $130,050. This amount remained outstanding at June 30, 2017. During the three months ended September 30, 2017, this balance has been consolidated with other notes and advances from this related party. See Consolidated Note Payable to Related Party below.

Schedule of Debt [Table Text Block]

During the three months ended September 30, 2017, the board of directors approved the Company to enter into a consolidated note payable agreement to consolidate notes and advances received from a related party, including accrued interests on these notes.

Note Date	Note Amount		Accrued Interest
January 2017	$	300,000	$	16,504
June 2017		105,000		2,048
June 2017		130,050		2,564
Total notes and accrued interest			$	556,166
Expenses owed to related party				2,234
			$	558,400

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

EMT allocated the purchase price among the assets acquired based on their fair values as follow:

Land	$	26,194
Land preparation and cleanup		15,000
Industrial Hemp Grower License		-
Other considerations		86,806
Total Purchase Price	$	128,000

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NOTE 5 - INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2017

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

The Company’s inventories consisted of the followings at September 30, 2017 and December 31, 2016:

	September 30, 2017		December 31, 2016
Raw materials	$	46,880	$	52,363
Finished goods		10,591		10,722
	$	57,471	$	63,085

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NOTE 1 - THE COMPANY (Details)	9 Months Ended
	Sep. 30, 2017
Disclosure Text Block [Abstract]
Number of Wholly Owned Subsidiaries	3

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NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	1 Months Ended	9 Months Ended
	Mar. 31, 2017	Sep. 30, 2017	Sep. 30, 2016
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term		10 years
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares)		10,000
Stock Issued During Period, Value, Share-based Compensation, Gross		$ 12,800
Stock Issued During Period, Shares, Issued for Services (in Shares)		15,000
Stock Issued During Period, Value, Issued for Services		$ 23,400
Stock Issued During Period, Shares, Purchase of Assets (in Shares)		54,254
Stock Issued During Period, Value, Purchase of Assets		$ 86,806
Share-based Compensation		321,706	$ 0
Property, Plant, and Equipment, Fair Value Disclosure		$ 26,194
Shares Issued for Services #1 [Member]
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Stock Issued During Period, Shares, Issued for Services (in Shares)		17,646
Stock Issued During Period, Value, Issued for Services		$ 30,000
Shares Issued for Services #2 [Member]
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Stock Issued During Period, Shares, Issued for Services (in Shares)		50,000
Stock Issued During Period, Value, Issued for Services		$ 82,500
Director [Member]
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares)		60,000
Stock Issued During Period, Value, Share-based Compensation, Gross		$ 99,000
Stock Issued During Period, Shares, Issued for Services (in Shares)	50,000	50,000
Stock Issued During Period, Value, Issued for Services	$ 82,500	$ 82,500
Stock Issued During Period, Shares, Purchase of Assets (in Shares)		80,000
Stock Issued During Period, Value, Purchase of Assets		$ 128,000
2016 Services [Member] | Director [Member]
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares)		10,000

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NOTE 4 - RELATED PARTY TRANSACTIONS (Details)		1 Months Ended			3 Months Ended			6 Months Ended	9 Months Ended
		Jun. 30, 2017 USD ($) $ / shares	May 31, 2017 USD ($) $ / shares shares	Mar. 31, 2017 USD ($) $ / shares shares	Sep. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2017 USD ($) $ / shares	Mar. 31, 2017 USD ($) $ / shares	Jun. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($)	Jan. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Debt Instrument, Face Amount		$ 105,000		$ 100,000		$ 105,000	$ 100,000	$ 105,000
Debt Instrument, Interest Rate, Stated Percentage		8.00%				8.00%		8.00%
Stock Issued During Period, Shares, Other (in Shares) | shares									50,000
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ / shares		$ 0.50		$ 1.60		$ 0.50	$ 1.60	$ 0.50
Proceeds from Related Party Debt									$ 130,050	$ 510,000
Due to Related Parties					$ 65,984				$ 65,984			$ 4,000
Debt Instrument, Interest Rate Terms									8%
Stock Issued During Period, Shares, Issued for Services (in Shares) | shares									15,000
Stock Issued for Deferred Offering Cost, Shares (in Shares) | shares									16,000
Stock Issued During Period, Value, Issued for Services									$ 23,400
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment			$ 15,000
Business Combination, Consideration Transferred, Other			$ 86,806
Former Chief Executive Officer [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Debt Instrument, Face Amount											$ 300,000
Debt Instrument, Interest Rate, Stated Percentage											8.00%
Interest Payable, Current					16,504				16,504
Interest Expense, Related Party					$ 4,800				$ 11,704
Stock Issued During Period, Shares, Other (in Shares) | shares									100,000
Interest Expense, Debt									$ 182,000
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ / shares					$ 0.50				$ 0.50
Affiliated Entity [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Proceeds from Related Party Debt						$ 39,000	$ 35,348
Chief Executive Officer [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Stock Issued During Period, Shares, Other (in Shares) | shares									100,000
Proceeds from Related Party Debt		$ 130,050
Related Party Transaction, Amounts of Transaction					$ 6,000				$ 18,000
Due to Related Parties					4,000				4,000			4,000
Stock Issued During Period, Value, Other									182,000
Chief Executive Officer [Member] | Building [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Employment Agreement, Reimbursement									1,000
Due to Related Parties	[1]				4,000				4,000			4,000
Chief Executive Officer [Member] | Vehicles [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Employment Agreement, Reimbursement									1,000
Due to Related Parties	[2]				$ 0				$ 0			$ 0
Director [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Stock Issued During Period, Shares, Other (in Shares) | shares					15,520
Related Party Transaction, Amounts of Transaction					$ 7,760
Stock Issued During Period, Shares, Issued for Services (in Shares) | shares				50,000					50,000
Stockholders' Equity, Other Shares (in Shares) | shares				16,000
Stock Issued for Deferred Offering Cost, Shares (in Shares) | shares								50,000
Stock Issued During Period, Value, Issued for Services				$ 82,500					$ 82,500
Number of Directors			1
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | shares			80,000
Share Price (in Dollars per share) | $ / shares			$ 1.60		$ 0.61				$ 0.61
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned			$ 128,000
Shares Issued, Price Per Share (in Dollars per share) | $ / shares					$ 0.50				$ 0.50
Stock Issued During Period, Value, Other					$ 9,529
Non-Cash Offering Costs [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Stock Issued During Period, Shares, Other (in Shares) | shares									110,000
Stock Issued for Deferred Offering Cost, Shares (in Shares) | shares									34,000
Stock Issued During Period, Value, Other									$ 184,800
Non-Cash Offering Costs [Member] | Director [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) [Line Items]
Stock Issued for Deferred Offering Cost, Shares (in Shares) | shares				34,000				34,000

[1] On May 1, 2016, the Company entered into an employment agreement with its CEO. The term of the employment is through December 31, 2019. The agreement provides for a monthly storage and corporate housing allowance of $1,000 for a property owned by the CEO and a monthly automobile allowance of $1,000. During the three and nine months ended September 30, 2017, expenses related to the housing and automobile allowances totaled $6,000 and $18,000, respectively, of which $4,000 and $4,000 remained owed to the CEO at September 30, 2017 and December 31, 2016, respectively.

[2] In June 2017, the Company's CEO provided the Company with a short term working capital advance of $130,050. This amount remained outstanding at June 30, 2017. During the three months ended September 30, 2017, this balance has been consolidated with other notes and advances from this related party. See Consolidated Note Payable to Related Party below.

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NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Related Party Transactions - USD ($)		Sep. 30, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Payable to Related Parties		$ 65,984	$ 4,000
Affiliated Entity [Member] | Related Party Note #1 [Member]
Related Party Transaction [Line Items]
Payable to Related Parties	[1]	35,348	0
Affiliated Entity [Member] | Related Party Note #2 [Member]
Related Party Transaction [Line Items]
Payable to Related Parties	[1]	26,636	0
Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Payable to Related Parties		4,000	4,000
Chief Executive Officer [Member] | Building [Member]
Related Party Transaction [Line Items]
Payable to Related Parties	[2]	4,000	4,000
Chief Executive Officer [Member] | Vehicles [Member]
Related Party Transaction [Line Items]
Payable to Related Parties	[3]	$ 0	$ 0

[1] In March 2017 and June 2017, the Company received a working capital advance of $35,348 and $39,000, respectively, from a related entity. These advances are non-interest bearing and were intended as short term capital advances. They have been included in payable to related parties on the consolidated balance sheet as current liabilities at September 30, 2017.

[2] On May 1, 2016, the Company entered into an employment agreement with its CEO. The term of the employment is through December 31, 2019. The agreement provides for a monthly storage and corporate housing allowance of $1,000 for a property owned by the CEO and a monthly automobile allowance of $1,000. During the three and nine months ended September 30, 2017, expenses related to the housing and automobile allowances totaled $6,000 and $18,000, respectively, of which $4,000 and $4,000 remained owed to the CEO at September 30, 2017 and December 31, 2016, respectively.

[3] In June 2017, the Company's CEO provided the Company with a short term working capital advance of $130,050. This amount remained outstanding at June 30, 2017. During the three months ended September 30, 2017, this balance has been consolidated with other notes and advances from this related party. See Consolidated Note Payable to Related Party below.

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NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Debt - USD ($)	1 Months Ended		9 Months Ended
	Jun. 30, 2017	Jan. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Debt [Line Items]
Total related party			$ 558,400	$ 0
Principal [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Debt [Line Items]
Notes and accrued interest		$ 300,000
Principal [Member] | June 2017 #1 [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Debt [Line Items]
Notes and accrued interest	$ 105,000
Principal [Member] | June 2017 #2 [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Debt [Line Items]
Notes and accrued interest	130,050
Accrued Interest [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Debt [Line Items]
Notes and accrued interest		$ 16,504	556,166
Expenses owed to related party			2,234
Total related party			$ 558,400
Accrued Interest [Member] | June 2017 #1 [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Debt [Line Items]
Notes and accrued interest	2,048
Accrued Interest [Member] | June 2017 #2 [Member]
NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Debt [Line Items]
Notes and accrued interest	$ 2,564

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NOTE 4 - RELATED PARTY TRANSACTIONS (Details) - Schedule of Business Acquisitions, by Acquisition	1 Months Ended
	May 31, 2017 USD ($)
Schedule of Business Acquisitions, by Acquisition [Abstract]
Land	$ 26,194
Land preparation and cleanup	15,000
Industrial Hemp Grower License	0
Other considerations	86,806
Total Purchase Price	$ 128,000

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NOTE 5 - INVENTORIES (Details) - Schedule of Inventory, Current - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Schedule of Inventory, Current [Abstract]
Raw materials	$ 46,880	$ 52,363
Finished goods	10,591	10,722
	$ 57,471	$ 63,085

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NOTE 6 - CONVERTIBLE NOTE PAYABLE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2017	Sep. 30, 2016
NOTE 6 - CONVERTIBLE NOTE PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	$ 105,000	$ 100,000
Debt, Discount Rate		10.00%
Debt Instrument, Maturity Date		Mar. 31, 2019
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.50	$ 1.60
Debt Instrument, Convertible, Terms of Conversion Feature		If an event of default has occurred or the date of conversion is 180 days after the issuance date, the conversion price will be the lesser of $1.60 per share, or 70% of the second lowest closing bid price of the Company’s common stock for the 20 trading days immediately preceding the date of the conversion
Proceeds from Convertible Debt		$ 85,000	$ 85,000	$ 0
Stock Issued During Period, Shares, Other (in Shares)			50,000
Stock Issued for Deferred Offering Cost, Shares (in Shares)			16,000
Debt Instrument, Unamortized Discount			$ 10,000
Payments of Debt Issuance Costs			26,400
Debt Instrument, Increase (Decrease), Other, Net			(47,350)
Repayments of Convertible Debt			100,000	0
Interest Paid			$ 5,000	$ 48
Maximum [Member]
NOTE 6 - CONVERTIBLE NOTE PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount		400,000
Commitment Fee [Member]
NOTE 6 - CONVERTIBLE NOTE PAYABLE (Details) [Line Items]
Debt Instrument, Fee Amount		2,500
Legal Fees [Member]
NOTE 6 - CONVERTIBLE NOTE PAYABLE (Details) [Line Items]
Debt Instrument, Fee Amount		$ 2,500
Non-Cash Offering Costs [Member]
NOTE 6 - CONVERTIBLE NOTE PAYABLE (Details) [Line Items]
Stock Issued During Period, Shares, Other (in Shares)			110,000
Stock Issued for Deferred Offering Cost, Shares (in Shares)			34,000
Consultant Commissions [Member]
NOTE 6 - CONVERTIBLE NOTE PAYABLE (Details) [Line Items]
Debt Instrument, Fee Amount			$ 5,950
Repayments of Convertible Debt	$ 100,000
Interest Paid	$ 5,000

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NOTE 7 - SHAREHOLDERS' EQUITY (Details)	1 Months Ended		3 Months Ended		6 Months Ended	9 Months Ended
	May 31, 2017	Mar. 31, 2017 USD ($) shares	Sep. 30, 2017 USD ($) shares	Jun. 30, 2017 USD ($)	Jun. 30, 2017 USD ($) shares	Sep. 30, 2017 USD ($) shares	Sep. 30, 2016 USD ($)	Dec. 31, 2016 shares
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Common Stock, Shares Authorized			150,000,000			150,000,000		150,000,000
Common Stock, Voting Rights						Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution.
Stock Issued During Period, Shares, New Issues						608,166
Stock Issued During Period, Shares, Share-based Compensation, Gross						10,000
Stock Issued During Period, Value, Share-based Compensation, Gross (in Dollars) | $						$ 12,800
Stock Issued During Period, Shares, Issued for Services						15,000
Stock Issued During Period, Value, Issued for Services (in Dollars) | $						$ 23,400
Stock Issued During Period, Shares, Other						50,000
Stock Issued During Period, Shares, Purchase of Assets						54,254
Stock Issued During Period, Value, Purchase of Assets (in Dollars) | $						$ 86,806
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number			75,000			75,000
Stock Issued for Deferred Offering Cost, Shares						16,000
Stock Issued for Deferred Offering Cost (in Dollars) | $						$ 240,900	$ 0
Share-based Compensation (in Dollars) | $						$ 321,706	$ 0
Equity Purchase Agreement [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Value, Other (in Dollars) | $					$ 184,800
Equity Purchase Agreement, Maximum (in Dollars) | $					$ 5,000,000
Equity Purchase Agreement, Term					24 months
Common Stock Discount Rate					10.00%
Shares Issued for Services #1 [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Issued for Services						17,646
Stock Issued During Period, Value, Issued for Services (in Dollars) | $						$ 30,000
Shares Issued for Services #2 [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Issued for Services						50,000
Stock Issued During Period, Value, Issued for Services (in Dollars) | $						$ 82,500
Restricted Stock [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross		100,000			10,000
Number of Directors					1
Stock Issued During Period, Value, Restricted Stock Award, Gross (in Dollars) | $					$ 12,800
Share-based Compensation (in Dollars) | $				$ 17,877	$ 60,501
Restricted Stock [Member] | Minimum [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		4 years
Restricted Stock [Member] | Maximum [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		5 years
Director [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross						60,000
Stock Issued During Period, Value, Share-based Compensation, Gross (in Dollars) | $						$ 99,000
Stock Issued During Period, Shares, Issued for Services		50,000				50,000
Stock Issued During Period, Value, Issued for Services (in Dollars) | $		$ 82,500				$ 82,500
Stock Issued During Period, Shares, Other			15,520
Stock Issued During Period, Value, Other (in Dollars) | $			$ 9,529
Stock Issued During Period, Shares, Purchase of Assets						80,000
Stock Issued During Period, Value, Purchase of Assets (in Dollars) | $						$ 128,000
Stock Issued for Deferred Offering Cost, Shares					50,000
Stock Issued for Deferred Offering Cost (in Dollars) | $					$ 56,100
Number of Directors	1
Chief Executive Officer [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Other						100,000
Stock Issued During Period, Value, Other (in Dollars) | $						$ 182,000
Chief Executive Officer [Member] | Interest Expense [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Other						100,000
Stock Issued During Period, Value, Other (in Dollars) | $						$ 158,000
2016 Services [Member] | Director [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross						10,000
2017 Services [Member] | Director [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross						10,000
Non-Cash Offering Costs [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Other						110,000
Stock Issued During Period, Value, Other (in Dollars) | $						$ 184,800
Stock Issued for Deferred Offering Cost, Shares						34,000
Non-Cash Offering Costs [Member] | Director [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued for Deferred Offering Cost, Shares		34,000			34,000
Commitment Fee [Member] | Equity Purchase Agreement [Member]
NOTE 7 - SHAREHOLDERS' EQUITY (Details) [Line Items]
Stock Issued During Period, Shares, Other					110,000

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NOTE 8 - SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] - Building [Member]	Oct. 31, 2017 USD ($)
NOTE 8 - SUBSEQUENT EVENTS (Details) [Line Items]
Lessee, Operating Lease, Term of Contract	24 months
Lessee, Operating Lease, Description	commencing 60 days after the landlord delivers the premise to tenant
Operating Lease, Rent for First Twelve Months [Member]
NOTE 8 - SUBSEQUENT EVENTS (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	$ 2,500
Operating Lease, Rent Expense for Next Twelve Months [Member]
NOTE 8 - SUBSEQUENT EVENTS (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	$ 2,550