10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from __________________ to _________________

Commission file number: 001-35902

AMERICANN, INC

(Exact name of registrant as specified in its charter)

Delaware	27-4336843
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
3200 Brighton Blvd. Unit 114, Denver, CO	80216
(Address of principal executive offices)	(Zip Code)
(303) 862-9000
(Registrant’s telephone number, including area code)
N/A
(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. Yes ☑No ☐

Indicate by a checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date 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 ☐

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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☑
(Do not check if a smaller reporting company)		Emerging growth company	☐

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 ☐No ☑

As of May 3, 2017, the registrant had 19,181,000shares of common stock outstanding.

AmeriCann, Inc.

FORM 10-Q

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION		PAGE NO.
	Item 1.	Unaudited Financial Statements:
		Balance Sheets as of March 31, 2017 and September 30, 2016	1
		Statements of Operations for the Three and Six Months Ended March 31, 2017 and 2016	2
		Statements of Cash Flows for the Six Months Ended March 31, 2017 and 2016	3
		Notes to Financial Statements	4
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
	Item 4.	Controls and Procedures	15
PART II	OTHER INFORMATION
	Item 6.	Exhibits	16
	SIGNATURES		17

Part I:  FINANCIAL INFORMATION

Item 1.      UNAUDITED Financial Statements

AMERICANN, INC.

BALANCE SHEETS

	March 31, 2017 (unaudited)			September 30, 2016
Assets
Current Assets:
Cash and cash equivalents	$	204,411		$	24
Interest receivable		527			2,521
Current portion of prepaid land lease		57,959			-
Prepaid expenses and other current assets		11,726			11,726
Note receivable		62,747			247,378
Total current assets		337,370			261,649
Land held for resale		2,250,809			2,250,809
Construction in progress		214,881			-
Furniture and equipment (net of depreciation of $3,143 and $2,581)		4,714			5,276
Notes and other receivables (net of allowance of $469,699 and $469,699)		780,315			780,315
Note receivable - related party		98,741			57,693
Website development costs (net of amortization of $21,903 and $14,986)		19,597			26,514
Prepaid land lease and related deposits, net of current portion		2,811,027			925,000
Security deposit		3,110			3,110
Total assets	$	6,520,564		$	4,310,366
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	54,448		$	385,380
Interest payable (including $0 and $109,825 to related parties)		30,270			118,749
Other payables		23,008			14,927
Notes payable (net of discount of $0 and $35,250)		990,000			1,157,997
Total current liabilities		1,097,726			1,677,053
Note payable - related party (inclusive of premium of $57,719 and $72,651)		1,989,365			2,024,297
Total liabilities		3,087,091			3,701,350
Commitments and contingencies - see Note 9		-			-
Stockholders' Equity:
Preferred stock, $0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.0001 par value; 100,000,000 shares authorized; 19,181,000 and 17,031,000 shares issued and outstanding as of March 31, 2017 and September 30, 2016, respectively		1,918			1,703
Additional paid in capital		10,366,219			6,512,244
Accumulated deficit		(6,934,664	)		(5,904,931	)
Total stockholders' equity		3,433,473			609,016
Total liabilities and stockholders' equity	$	6,520,564		$	4,310,366

See accompanying notes to unaudited financial statements.

1

AMERICANN, INC.

STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended March,						Six Months Ended March 31,
	2017			2016			2017			2016
Revenues:
Consulting fees	$	15,000		$	15,000		$	30,000		$	30,000
Total revenues		15,000			15,000			30,000			30,000
Operating expenses:
Advertising and marketing		4,973			250			7,220			2,348
Professional fees		148,686			134,751			201,083			353,080
General and administrative expenses		364,817			162,400			653,250			337,545
Provision for doubtful accounts		-			3,289			-			6,614
Total operating expenses		518,476			300,690			861,553			699,587
Loss from operations		(503,476	)		(285,690	)		(831,553	)		(669,587	)
Other income (expense):
Interest income		2,584			45,492			10,759			93,787
Interest expense		(57,762	)		(32,249	)		(139,337	)		(64,205	)
Interest expense - related party		(36,634	)		(23,594	)		(69,602	)		(45,452	)
Total other income (expense)		(91,812	)		(10,351	)		(198,180	)		(15,870	)
Net loss	$	(595,288	)	$	(296,041	)	$	(1,029,733	)	$	(685,457	)
Basic and diluted loss per common share	$	(0.03	)	$	(0.02	)	$	(0.06	)	$	(0.04	)
Weighted average common shares outstanding		19,136,555			16,631,000			18,706,825			16,631,000

See accompanying notes to unaudited financial statements.

2

AMERICANN, INC.

STATEMENTS OF CASH FLOWS

(unaudited)

	Six Months Ended March 31,
	2017			2016
Cash flows from operating activities:
Net loss	$	(1,029,733	)	$	(685,457	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		7,479			7,478
Provision for doubtful accounts		-			6,614
Stock based compensation and option expense		37,450			102,799
Amortization of debt discount/(premium)		20,318			-
Changes in operating assets and liabilities:
Interest receivable		1,994			1,951
Amounts due from WGP		-			(64,371	)
Prepaid expenses		28,980			25,022
Accounts payable and accrued expenses		(330,932	)		127,856
Interest payable		21,346			25,467
Interest payable - related party		(109,825	)		45,452
Other payables		8,081			(8,018	)
Deferred revenue		-			5,000
Net cash flows used in operations		(1,344,842	)		(410,207	)
Cash flows from investing activities:
Additions to construction in progress		(214,881	)		(4,327	)
Deposit on land		-			(250,000	)
Payments received on notes receivable		214,631			184,234
Advances made on notes receivable - related party		(41,048	)		-
Advances made on notes receivable		(30,000	)		-
Net cash flows used in investing activities		(71,298	)		(70,093	)
Cash flows from financing activities:
Common stock issued for cash, net		1,843,774			-
Proceeds from note payable		24,657			116,185
Proceeds from note payable - related party		-			227,500
Payments on note payable - related party		(20,000	)		-
Payments on note payable		(227,904	)		-
Net cash flows provided by financing activities		1,620,527			343,685
Net increase (decrease) in cash and cash equivalents		204,387			(136,615	)
Cash and cash equivalents at beginning of period		24			201,353
Cash and cash equivalents at end of period	$	204,411		$	64,738
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest (including $194,368 to related parties)	$	277,100		$	15,932
Cash paid for income taxes	$	-		$	-
Non-Cash Investing and Financing Activities:
Shares and warrants issued to lessor as consideration for land lease		1,972,966			-

See accompanying notes to unaudited financial statements.

3

AMERICANN, INC.

Notes To Unaudited Financial Statements

NOTE 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

AmeriCann, Inc. ("the Company", “we”, “our” or "the Issuer") was organized under the laws of the State of Delaware on June 25, 2010.

On January 17, 2014, a privately held limited liability company acquired approximately 93% of the Company's outstanding shares of common stock from several of the Company's shareholders, which resulted in a change in control of the Company.

The Company's business plan is to offer a comprehensive, turnkey package of services that includes consulting, design, construction and financing to approved and licensed marijuana operators throughout the United States. The Company's business plan is based on the anticipated growth of the regulated marijuana market in the United States.

The Company's activities are subject to significant risks and uncertainties including failure to secure funding to properly expand its operations.

Basis of Presentation

The (a) balance sheet as of September 30, 2016, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the three and six months ended March 31, 2017 and 2016, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on January 12, 2017. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2016 as reported in the Form 10-K have been omitted.

Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have no impact on net loss.

Recent Accounting Pronouncements

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, to amend the amortization period for certain purchased callable debt securities held at a premium. The ASU shortens the amortization period for the premium to the earliest call date. Under current Generally Accepted Accounting Principles (“GAAP”), entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The amendments should be applied on a modified retrospective basis, and are effective for fiscal years beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this amendment on its financial statements.

In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which is the same time as the amendments in ASU No. 2014-09, and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its financial statements.

In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No. 2014- 09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.   The Company is currently evaluating the impact of these amendments on its financial statements.

4

Between May 2014 and December 2016, the FASB issued several ASU’s on Revenue from Contracts with Customers (Topic 606). These updates will supersede nearly all existing revenue recognition guidance under current U.S. generally accepted accounting principles (GAAP). The core principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. A five-step process has been defined to achieve this core principle, and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standards are effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standards in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting the standards recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of these standards on its financial statements and has not yet determined the method by which it will adopt the standard in 2018.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force), to provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flow. The amendments should be applied using a retrospective transition method, and are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of these amendments on its financial statements.

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $6,934,664 and $5,904,931 at March 31, 2017, and September 30, 2016, respectively, and had a net loss of $1,029,733 for the six months ended March 31, 2017. Further, the amount due from Wellness Group Pharms, LLC (“WGP”) of $1,250,014 (before an allowance of $469,699) may not be collectible. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds through the sale of its securities. The Company filed a Demand for Arbitration against WGP on April 7, 2017. See Note 11, Subsequent Events, for additional discussion.

Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

5

NOTE 3. NOTES AND OTHER RECEIVABLES

Notes and Other Receivables as of March 31, 2017, and September 30, 2016, consisted of the following: 

	March 31, 2017		September 30, 2016
Note receivable from 4900 Jackson, LLC, a licensed dispensary, interest rate of 12.0%; monthly principal and interest payments of $50,000, with a balloon payment of $182,531 due on May 1, 2017; collateralized by the borrower's assets.	$	62,747	$	247,378
Notes and other receivables from WGP, a licensed medical marijuana cultivator; $673,294 note secured by real and personal property of the borrower, interest rate of 18.0%; accrued consulting fees of $40,000, construction advances of $332,357 and accrued interest of $204,363. Net of reserves of $469,699. All amounts are due and payable immediately.		780,315		780,315
Related party note receivable from CCI, a non-profit corporation, financing of up to $2.5 million through April 2021, interest rate of 18.0%; monthly principal and interest payments commencing the sixth month after CCI begins to generate sales; construction and working capital advances of $93,049, and accrued interest of $5,692; unsecured.		98,741		57,693
		941,803		1,085,386
Less: Current portion		62,747		247,378
	$	879,056	$	838,008

The notes and other receivables from WGP are classified as long term due to ongoing disputes between the Company and WGP. The Company filed a Demand for Arbitration against WGP on April 7, 2017. See Note 11, Subsequent Events, for additional discussion.

NOTE 4.  NOTES PAYABLE

Unrelated

On September 15, 2015, an unrelated third party loaned the Company $900,000. The loan bore interest at 12% per year and was due and payable on March 16, 2016. The Company used $650,000 of the proceeds to repay existing loans that were secured by the land held for sale. On April 6, 2016, the loan was modified to increase the principal balance to $990,000, increase the interest rate to 18% per year, and extend the due date to March 15, 2017. On March 15, 2017, the maturity date of the loan was extended to March 15, 2018, and the interest rate remained the same at 18% per year. The Company may repay the loan at any time without penalty. The loan is secured by a first lien on the five-acre parcel of land in Denver. Accrued interest on this note payable at March 31, 2017 and September 30, 2016 was $30,270 and $8,924, respectively.

In September 2016, we had borrowed funds from various unrelated parties. The interest rates on these notes ranged from 8% to 18%, due dates ranged from December 14, 2016, through January 15, 2017, and $75,000 was convertible into the Company’s common stock at a conversion price of $0.75. In addition to the notes, we issued warrants to purchase 75,000 shares of our common stock, exercisable at a price of $0.75 per share, and warrants to purchase an additional 75,000 shares of common stock, exercisable at a price of $1.25 per share. Both sets of warrants expire on September 15, 2020. We allocated the new proceeds to the warrants, stock options, and the convertible debt based on their relative fair values, as determined by the Black Scholes option pricing model. Based on the Black Scholes option pricing model, $35,250 was allocated to the warrants which are reflected in additional paid-in-capital and $35,250 was allocated to a debt discount. The debt discount is being amortized on a straight-line basis over the term of the note. At March 31, 2017, there was no outstanding principal or interest, and no unamortized debt discount due to the full payment of the notes.

6

Related Party

On February 1, 2016, we entered into an agreement with an unrelated party which provided us with borrowing capacity of $200,000. On May 1, 2016, the agreement was amended to increase the borrowing capacity to $1,000,000. On July 14, 2016, Strategic Capital Partners (“SCP”) assumed the $521,297 loan borrowed against this credit line, increasing the total balance owed to SCP to $2,431,646. SCP is controlled by Benjamin J. Barton, one of our officers and directors and a principal shareholder. The amounts borrowed from SCP were used to fund our operations.

On July 14, 2016, we entered into a debt modification agreement whereby a portion of the debt was converted into common stock and the remaining debt was renegotiated into two promissory notes.

Of the amounts owed to SCP, $500,000 was converted into 400,000 shares of our common stock ($1.25 conversion rate).

The remaining $1,931,646 owed to SCP was divided into two promissory notes.

The first note, in the principal amount of $1,000,000, bears interest at 9.5% per year and matures on December 31, 2019. Interest is payable quarterly. The note can be converted at any time, at the option of the lender, into shares of our common stock, initially at a conversion price of $1.25 per share. The conversion price will be proportionately adjusted in the event of any stock split or capital reorganization. The note is not secured. Accrued interest on this note payable at March 31, 2017 and September 30, 2016 was $0 and $20,301, respectively.

If the average closing price of our common stock is at least $2.50 for twenty consecutive trading days, and the average daily volume of trades of our common stock during the twenty trading days is at least 100,000 shares, we may, within 10 days of the end of such twenty-day period, notify SCP that its right to convert the note into shares of our common stock will end 45 days after the date of the notice to SCP.

The second note, in the principal amount of $931,646, bears interest at 8% per year and matures on December 31, 2019. Interest is payable quarterly. The note is not convertible into shares of our common stock. The note is secured by a second lien on our property in Denver, Colorado and a first lien on all amounts due to us by WGP. Any payments received from the sale, lease or commercialization of the property in Denver, and any amounts received from WGP, will be applied to the principal amount of the note. Otherwise, all unpaid principal and interest will be due on December 31, 2019. Accrued interest on this note payable at March 31, 2017 and September 30, 2016 was $0 and $15,297, respectively.

In connection with the debt modification agreement, we issued SCP warrants to purchase 800,000 shares of our common stock, exercisable at a price of $1.50 per share, and warrants to purchase an additional 800,000 shares of common stock, exercisable at a price of $3.00 per share. Both sets of warrants expire on June 30, 2020. We allocated the relative fair values to the warrants, stock options, and convertible debt, as determined by the Black Scholes option pricing model. Based on the Black Scholes option pricing model, a net debt premium of $72,651 was allocated to the warrants which are reflected in additional paid-in-capital. The debt premium is being amortized on a straight-line basis over the term of the notes. At March 31, 2017, the outstanding principal on these notes was $1,931,646, and the unamortized debt premium was $57,719. Amortization of debt premium was $5,169 and $14,932 for the three and six months ended March 31, 2017. There was no such amortization for the three and six months ended March 31, 2016.

NOTE 5. RELATED PARTY TRANSACTIONS

Strategic Capital Partners. At March 31, 2017 and September 30, 2016, we had outstanding notes and accrued interest payable, inclusive of premium, to SCP of $1,989,365 and $2,024,297, respectively.

Interest expense was $36,634 and $23,594 for the three months ended March 31, 2017 and 2016, respectively; and $69,602 and $45,452 for the six months ended March 31, 2017 and 2016. There was no interest payable to related parties at March 31, 2017. Interest payable – related party of $109,825 was included in the accompanying balance sheets at September 30, 2016.  We made interest payments of $194,368 during 2017, and made no interest payments during 2016 associated with this related party notes payable.  During the six months ended March 31, 2017, we received advances of $0 and made payments of $20,000. During the six months ended March 31, 2016, we received advances of $227,500 and made no payments.

Coastal Compassion. On April 7, 2016, we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is one of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial tenant in our planned Massachusetts Medical Cannabis Center (“MMCC”). Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

7

Pursuant to the agreements, we agreed to provide CCI with financing of up to $2.5 million for a five-year term at 18% interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a three-year period beginning April 1, 2016, we agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will owe us $10,000 each month for these consulting services, but is not required to pay until six months after generating certain revenues. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of March 31, 2017, we have provided financing to CCI of $98,741, which includes construction and working capital advances of $93,049 and accrued interest of $5,692.

NOTE 6. LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
Net loss attributable to common stockholders	$	(595,288	)	$	(296,041	)	$	(1,029,733	)	$	(685,457	)
Basic weighted average outstanding shares of common stock		19,136,555			16,631,000			18,706,825			16,631,000
Dilutive effects of common share equivalents		-			-			-			-
Dilutive weighted average outstanding shares of common stock		19,136,555			16,631,000			18,706,825			16,631,000
Basic and diluted net loss per share of common stock	$	(0.03	)	$	(0.02	)	$	(0.06	)	$	(0.04	)

We have excluded 1,155,000 of stock options and 9,981,000 of warrants from the computation of diluted net loss per share since the effects are anti-dilutive.

NOTE 7. INCOME TAXES

We did not record any income tax expense or benefit for the three or six months ended March 31, 2017. We increased our valuation allowance and reduced our net deferred tax assets to zero. Our assessment of the realization of our deferred tax assets has not changed, and as a result we continue to maintain a full valuation allowance for our net deferred assets as of March 31, 2017.

As of March 31, 2017, we did not have any unrecognized tax benefits. There were no significant changes to the calculation since September 30, 2016.

NOTE 8. STOCK BASED COMPENSATION

Restricted Stock Awards. We use restricted stock awards to compensate certain key executives and other individuals. At March 31, 2017, we had no outstanding unvested restricted stock awards. Stock-based compensation expense associated with restricted stock awards was $18,725 and $46,813 for the three months ended March 31, 2017 and 2016, respectively, and $37,450 and $93,626 for the six months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, there is no remaining unrecognized stock-based compensation associated with restricted stock awards.

8

Stock Options. Stock option activity as of and for the six months ended March 31, 2017 is as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding at September 30, 2016		1,205,000	$	8.70		1.5	$	-
Granted		-		-		-		-
Cancelled		-		-		-		-
Exercised		50,000	$	0.75		2.0		-
Outstanding as of March 31, 2017		1,155,000	$	9.04		1.0	$	-
Vested and expected to vest at March 31, 2017		1,155,000	$	9.04		1.0	$	-
Exercisable at March 31, 2017		1,155,000	$	9.04		1.0	$	-

Stock-based compensation expense associated with stock options totaled $0 and $4,264 for the three months ended March 31, 2017 and 2016, respectively; and $0 and $9,173 for the six months ended March 31, 2017 and 2016, respectively. At March 31, 2017, there is no remaining unrecognized stock-based compensation associated with stock options. During the three and six months ended March 31, 2017, we received proceeds of $37,500 from stock option exercises.

NOTE 9.  COMMITMENTS AND CONTIGENCIES

Coastal Compassion. On April 7, 2016, we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is one of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial tenant in our planned MMCC. Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

Pursuant to the agreements, we agreed to provide CCI with financing of up to $2.5 million for a five-year term at 18% interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a three- year period beginning April 1, 2016, we agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will owe us $10,000 each month for these consulting services, but is not required to pay until six months after generating certain revenues. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of March 31, 2017, we have provided financing to CCI of $98,741, which includes construction and working capital advances of $93,049 and accrued interest of $5,692.

Operating Leases

Land

On October 17, 2016, the Company closed the previously announced acquisition of a 52.6-acre parcel of undeveloped land in Freetown, Massachusetts. The deposits of $925,000 previously paid by the Company to the seller, Boston Beer Company (“BBC”), were credited against the total purchase price of $4,475,000. The remaining balance of $3,550,000 was paid to BBC by Massachusetts Medical Properties, LLC (“MMP”). The property is located approximately 47 miles southeast of Boston. The Company plans to develop the property as the MMCC. Plans for the MMCC include the construction of sustainable greenhouse cultivation, processing, and infused product facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program.

As part of a simultaneous transaction, the Company assigned the property rights to MMP for a nominal fee and entered a lease agreement pursuant to which MMP agreed to lease the property to the Company for an initial term of fifty (50) years. We have the option to extend the term of the lease for four (4) additional ten (10) year periods. The lease is a triple net lease, with the Company paying all real estate taxes, repairs, maintenance and insurance.

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The lease payments will be the greater of (a) $30,000 per month; (b) $0.38 per square foot per month of any structure built on the property; or (c) 1.5% of all gross monthly sales of products sold by the Company, any assignee of the Company, or any subtenant of the Company. The lease payments will be adjusted up (but not down) every five (5) years by any increase in the Consumer Price Index.

Between October 17, 2016 and April 17, 2017, the monthly lease payments will accrue, with all accrued lease payments to be paid to MMP on April 17, 2017. On April 17, 2017, the Company will reimburse MMP’s costs and expenses associated with the acquisition of the property, the lease, and the acquisition of the shares and the warrant from the Company (as further described below).

Under the terms of the lease, the Company has six (6) months to obtain capital funding for the construction of the first phase building. In the event that the Company is unable to raise these funds within the six (6) month period, the Company will have an additional six (6) month period to do so; provided, that the Company has paid accrued lease payments and closing costs. If the Company is then unable to raise these funds on or before twelve (12) months from October 17, 2016, the lease will terminate. As of March 31, 2017, the Company has paid all accrued lease payments and closing costs.

The Company shall receive credit for the $925,000 paid towards the purchase price of the land in the form of discounted lease payments. For the initial fifty (50) year term of the lease, the lease payments will be reduced by $1,542 each month.

 In connection with the sale of the property to MMP and the lease, the Company and MMP entered into a Share Purchase Agreement pursuant to which the Company issued to MMP 100,000 shares of its common stock at par value of $0.0001 (“Common Stock”), and a warrant to purchase up to 3,640,000 shares of Common Stock at an exercise price of $1.00 per share. The warrant can be exercised at any time on or after October 17, 2018 and on or before October 17, 2020. The warrant does not contain a cashless exercise provision. The fair value of the warrant was established using the Black Scholes option pricing model using the following assumptions:

● Risk-free interest rate – 1.12 percent

● Expected term – 4.0 years

● Volatility – 115 percent

The Company allocated $1,899,966 to the warrant which is reflected in additional paid-in-capital and was allocated to prepaid land lease. The fair value of the common stock on the date of the agreement was $73,000, which is also reflected in additional paid-in-capital and was allocated to prepaid land lease. The prepaid land lease is being amortized on a straight-line basis over the term of the lease.

The lease expense was $208,184 and $307,036 for the three and six months ended March 31, 2017. No such expense was incurred in the three and six months ended March 31, 2016.  At March 31, 2017, the future rental payments required under this lease are $142,290 for the remainder of fiscal 2017, $341,496 for fiscal years 2018 through 2021, and $15,367,520 thereafter.

Office space

The Company leases its office space located at 3200 Brighton Boulevard, Denver, Colorado for $2,870 per month under a month-to-month lease.

The Company leases an automobile under an operating lease commencing October 4, 2014 for 39 months at $611 per month. At March 31, 2017, the future rental payments required under this lease are $3,666 for the remainder of fiscal 2017 and $910 for fiscal 2018.

Except as described above, the Company has no other non-cancelable lease commitments.

NOTE 10.  SHAREHOLDERS’ EQUITY

Sale of Equity Securities. On November 7, 2016, we sold 2,000,000 Units at a price of $1.00 per Unit. The Units were sold in a private offering to a group of accredited investors. Each Unit consisted of one share of our common stock and one Series I Warrant. Each Series I Warrant allows the Holder to purchase one share of our common stock at a price of $3.00 per share at any time on or before November 4, 2020. The relative fair value of the warrants issued was approximately 43% of the proceeds received.

The offering provided us with $2,000,000 in gross proceeds and the potential for an additional $6,000,000 in proceeds with the exercise of the Series I Warrants. The proceeds from the placement will be utilized for the MMCC development, to pursue new opportunities in California, Pennsylvania, Florida and other states, and general corporate purposes.

Shares issued to lessor. As described in Note 9, we entered into a Share Purchase Agreement with MMP pursuant to which we issued to MMP 100,000 shares of our common stock at par value of $0.0001 (“Common Stock”), and a warrant to purchase up to 3,640,000 shares of Common Stock at an exercise price of $1.00 per share. The warrant can be exercised at any time on or after October 17, 2018 and on or before October 17, 2020. The warrant does not contain a cashless exercise provision.

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Warrants. Warrant activity as of and for the six months ended March 31, 2017 is as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding at September 30, 2016		4,341,000	$	6.19		2.1	$	-
Granted		5,640,000	$	1.71		3.8	$	-
Cancelled		-		-		-		-
Exercised		-		-		-		-
Outstanding as of March 31, 2017		9,981,000	$	3.66		2.8	$	-
Vested and expected to vest at March 31, 2017		9,981,000	$	3.66		2.8	$	-
Exercisable at March 31, 2017		9,981,000	$	3.66		2.8	$	-

NOTE 11.  SUBSEQUENT EVENTS

On April 7, 2017, we filed an arbitration claim against WGP. In our arbitration claim we requested an award for damages consisting of $1,005,000 previously advanced to WGP, unpaid consulting fees of $2,880,000, amounts that should have been paid to us under the lease agreement, including the base annual rent of $1,944,000 per year, interest at the rate of 25% on damages awarded by the Arbitrator, all costs and attorney’s fees incurred in the arbitration, and the immediate appointment of a receiver by the Arbitrator pursuant to the terms of our agreements with WGP.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended September 30, 2016 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K.

Forward-Looking Statements

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (“the Exchange Act”), which are subject to the “safe harbor” created by those sections. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “should,” “could,” “predicts,” “potential,” “continue,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements. All forward-looking statements in this Form 10-Q are made based on our current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. In evaluating these statements, you should specifically consider various factors, uncertainties and risks that could affect our future results or operations. These factors, uncertainties and risks may cause our actual results to differ materially from any forward-looking statement set forth in this Form 10-Q. You should carefully consider these risk and uncertainties described and other information contained in the reports we file with or furnish to the SEC before making any investment decision with respect to our securities. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

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OVERVIEW

AmeriCann's business plan is to offer a comprehensive, turnkey package of services that includes consulting, design, construction and financing to approved and licensed marijuana operators throughout the United States. Our business plan is based on the anticipated growth of the regulated marijuana market in the United States.

AmeriCann’s team includes board members, consultants, engineers and architects who specialize in real estate development, traditional horticulture, lean manufacturing, medical research, facility construction, regulatory compliance, security, marijuana cultivation and genetics, extraction processes, and infused product development.

To support local businesses that seek to serve cannabis patients in their communities we initiated the AmeriCann Preferred Partner Program. Currently, we have one Preferred Partner in Colorado, which is 4900 Jackson, LLC and one Preferred Partner in Massachusetts, which is Coastal Compassion, Inc. Through this program, we plan to provide an essential set of resources including advanced cultivation facilities, access to a team of experts and in certain cases, capital for our partner’s businesses. In addition, AmeriCann’s team has assisted applicants in obtaining cannabis licenses in competitive application processes in Massachusetts and Illinois. This support is designed to assist our Preferred Partners in newly regulated markets.

AmeriCann plans to lease facilities to its Preferred Partners that will be designed with AmeriCann’s propriety cultivation and processing system called “Cannopy.” AmeriCann developed Cannopy with experts from traditional horticulture, lean manufacturing, regulatory compliance and cannabis cultivation. Cannopy includes automation throughout the production life-cycle, customized workflow processes, monitoring and controls, and top-line security systems. Cannopy empowers Preferred Partners to consistently produce medical marijuana for patients at the lowest cost in the most efficient, compliant manner. We plan to provide initial and on-going training, policies, practices and procedures to operate the facilities.

The expanding cannabis industry requires extensive real estate to meet the growing needs of the market for cannabis products. AmeriCann assists our Preferred Partners with the identification, design, permitting, acquisition, development and operation of scalable infrastructure to cultivate and to dispense medical cannabis in regulated markets.

RECENT DEVELOPMENTS

MMP. On October 17, 2016, the Company closed the previously announced acquisition of a 52.6-acre parcel of undeveloped land in Freetown, Massachusetts. The deposits of $925,000 previously paid by the Company to the seller, Boston Beer Company (“BBC”), were credited against the total purchase price of $4,475,000. The remaining balance of $3,550,000 was paid to BBC by Massachusetts Medical Properties, LLC (“MMP”). The property is located approximately 47 miles southeast of Boston. The Company plans to develop the property as the Massachusetts Medical Cannabis Center (the “MMCC”). Plans for the MMCC include the construction of sustainable greenhouse cultivation, processing, and infused product facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program.

As part of a simultaneous transaction, the Company assigned the property rights to MMP for a nominal fee, and MMP and the Company entered a lease, pursuant to which MMP agreed to lease the property to the Company for an initial term of fifty (50) years. The Company has the option to extend the term of the lease for four (4) additional ten (10) year periods. The lease is a triple net lease, with the Company paying all real estate taxes, repairs, maintenance and insurance.

The lease payments will be the greater of (a) $30,000 per month; (b) $0.38 per square foot per month of any structure built on the property; or (c) 1.5% of all gross monthly sales of products sold by the Company, any assignee of the Company, or any subtenant of the Company. The lease payments will be adjusted up (but not down) every five (5) years by any increase in the Consumer Price Index.

Between October 17, 2016 and April 17, 2017, the monthly lease payments will accrue, with all accrued lease payments to be paid to MMP on April 17, 2017. On April 17, 2017, the Company will reimburse MMP’s costs and expenses associated with the acquisition of the property, the lease, and the acquisition of the shares and the warrant from the Company (as further described below).

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Under the terms of the lease, the Company has six (6) months to obtain capital funding for the construction of the first phase building. In the event that the Company is unable to raise these funds within the six (6) month period, the Company will have an additional six (6) month period to do so; provided, that the Company has paid accrued lease payments and closing costs. If the Company is then unable to raise these funds on or before twelve (12) months from October 17, 2016, the lease will terminate.

The Company shall receive credit for the $925,000 paid towards the purchase price of the land in the form of discounted lease payments. For the initial fifty (50) year term of the lease, the lease payments will be reduced by $1,542 each month.

In connection with the sale of the property to MMP and the lease, the Company and MMP entered into a Share Purchase Agreement pursuant to which the Company issued to MMP 100,000 shares of its common stock, par value $0.0001 (“Common Stock”), and a warrant to purchase up to 3,640,000 shares of Common Stock at an exercise price of $1.00 per share. The warrant can be exercised at any time on or after October 17, 2018 and on or before October 17, 2020. The warrant does not contain a cashless exercise provision.

The lease expense was $208,184 and $307,036 for the three and six months ended March 31, 2017. No such expense was incurred in the three and six months ended March 31, 2016.  At March 31, 2017, the future rental payments required under this lease are $142,290 for the remainder of fiscal 2017, $341,496 for fiscal years 2018 through 2021, and $15,367,520 thereafter.

Sale of Equity Securities. On November 7, 2016, we sold 2,000,000 Units at a price of $1.00 per Unit. The Units were sold in a private offering to a group of accredited investors. Each Unit consisted of one share of our common stock and one Series I Warrant. Each Series I Warrant allows the Holder to purchase one share of our common stock at a price of $3.00 per share at any time on or before November 4, 2020.

The offering provided us with $2,000,000 in gross proceeds and the potential for an additional $6,000,000 in proceeds with the exercise of the Series I Warrants. The proceeds from the placement will be utilized for the MMCC development, to pursue new opportunities in California, Pennsylvania, Florida and other states, and general corporate purposes.

SIGNIFICANT ACCOUNTING POLICIES

There were no changes in our significant accounting policies and estimates during the six months ended March 31, 2017 from those set forth in our Annual Report on Form 10-K for the year ended September 30, 2016 filed on January 12, 2017.

RESULTS OF OPERATIONS

Total Revenues

During the three and six months ended March 31, 2017, we generated $15,000 and $30,000 in revenue, respectively. During the three and six months ended March 31, 2016, we generated $15,000 and $30,000 in revenue, respectively. All of the Company’s revenue was earned from one customer, 4900 Jackson, LLC.

Advertising and Marketing Expenses

Advertising and marketing expenses were approximately $5,000 and $7,200 for the three and six months ended March 31, 2017, respectively, as compared to approximately $250 and $2,300 for the three and six months ended March 31, 2016, respectively. The Company continues to use print marketing and advertising efforts to raise the profile and awareness of the company and pursue new opportunities in our national expansion program. 

Professional Fees

Professional fees were approximately $149,000 and $201,000 for the three and six months ended March 31, 2017, respectively, as compared to approximately $135,000 and $353,000 for the three and six months ended March 31, 2016, respectively. The decrease in professional fees for the six months ended March 31, 2017 as compared to the six months ended March 31, 2016 is due to the capitalization of consulting fees associated with the planning and development of the first phase building of the Massachusetts Medical Cannabis Center.

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General and Administrative Expenses

General and administrative expenses were approximately $365,000 and $653,000 for the three and six months ended March 31, 2017, respectively, as compared to approximately $162,000 and $338,000 for the three and six months ended March 31, 2016, respectively. The increase is attributable primarily to lease expense associated with the land lease agreement that commenced in October 2016, partially offset by a decrease in stock based compensation.

Provision for doubtful accounts

Provision for doubtful accounts was approximately $0 and $3,300 for the three months ended March 31, 2017 and 2016, respectively, and approximately $0 and $6,600 for the six months ended March 31, 2017 and 2016, respectively. As a result of the arbitration claim filed against WGP in April 2017, the Company did not recognize interest income on the note receivable from WGP, and thus no provision was recorded against these amounts in the three and six months ended March 31, 2017.

Interest Income

Interest income was approximately $2,600 and $11,000 for the three and six months ended March 31, 2017, respectively, as compared to approximately $45,000 and $94,000 for the three and six months ended March 31, 2016, respectively. The decrease is attributable to a decrease in the amount owed from 4900 Jackson, LLC, in addition to no longer recognizing interest income on the note receivable from WGP as a result of the arbitration claim filed in April 2017.

Interest Expense

Interest expense was approximately $94,000 and $209,000 for the three and six months ended March 31, 2017, respectively, as compared to approximately $56,000 and $110,000 for the three and six months ended March 31, 2016, respectively. The increase is primarily attributable to increased interest rates and the amortization of debt discounts that are associated with the debt modifications that occurred in 2016.

Net Operating Loss

We had a net loss of approximately $(595,000) and $(1,030,000) for the three and six months ended March 31, 2017, respectively, as compared to approximately $(296,000) and $(685,000) for the three and six months ended March 31, 2016, respectively. The increase in net loss is attributable to changes in revenues, operating expenses and interest income and expense, each of which is described above.

 LIQUIDITY AND CAPITAL RESOURCES

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $6,934,664 and $5,904,931 at March 31, 2017, and September 30, 2016, respectively, and had a net loss of $1,029,733 for the six months ended March 31, 2017. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds through the sale of its securities. Further, the amount due from WGP of $1,250,014 (before an allowance of $469,699) may not be collectible. The Company filed a Demand for Arbitration against WGP on April 7, 2017. See Note 11, Subsequent Events, for additional discussion.

Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Notes Payable

See Notes 4 and 5 to the financial statements filed with this report for information concerning our notes payable.

Analysis of Cash Flows

During the six months ended March 31, 2017, our net cash flows used in operations were approximately $1,345,000 as compared to net cash flows used in operations of $410,000 for the six months ended March 31, 2016. The increase is primarily due to an increase in land lease expense associated with the commencement of the lease in October 2016, in addition to decreases in accounts payable, accrued expenses, and interest payable funded by the proceeds from our private equity offering during the three months ended December 31, 2016.

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Cash flows used in investing activities were approximately $71,000 for the six months ended March 31, 2017, consisting of additions to construction in progress of approximately $215,000, advances made on notes receivable of $30,000, advances made on notes receivable – related party of approximately $41,000, offset by approximately $215,000 of payments received from notes receivable. Cash flows used in investing activities were approximately $70,000 for the six months ended March 31, 2016, consisting of a $250,000 deposit on land and minor purchases of fixed assets, offset by approximately $184,000 of payments received from notes receivable.

Cash flows provided by financing activities were approximately $1,621,000 for the six months ended March 31, 2017, consisting of net proceeds from the issuance of common stock of approximately $1,844,000, proceeds from notes payable of approximately $25,000, offset by payments on notes payable to related parties of $20,000 and payments on notes payable of approximately $228,000. Cash flows provided by financing activities were approximately $344,000 for the six months ended March 31, 2016, consisting of proceeds from notes payable and notes payable - related parties.  

We do not have any firm commitments from any person to provide us with any capital.

OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, 2017, we did not have any off balance sheet arrangements.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as of the end of the period covered by this Quarterly Report on Form 10-Q.  Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were not effective for the same reasons that our internal control over financial reporting were not adequate.

Internal Control over Financial Reporting

As indicated in our Form 10-K filed on January 12, 2017, our Principal Executive Officer and Principal Financial Officer concluded that our internal control over financial reporting was not effective during the 2016 fiscal year at the reasonable assurance level, as a result of a material weakness primarily related to a lack of a sufficient number of personnel with appropriate training and experience in accounting principles generally accepted in the United States of America, or GAAP.

We are currently in the process of evaluating the steps necessary to remediate this material weakness.

Change in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarterly period ended March 31, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

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PART II OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit Number	Description of Document
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, (filed herewith)
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, (filed herewith)
32	Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished 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.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMERICANN, INC.
Dated: May 15, 2017	By:	/s/ Timothy Keogh
		Timothy Keogh
		Principal Executive Officer
	By:	/s/ Benjamin Barton
		Benjamin Barton
		Principal Financial and Accounting Officer

 17

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULES 13a-14(a)AND 15a-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

I, Timothy Keogh, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 of AmeriCann, 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(s) 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 on 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 (the registrant's fourth fiscal quarter in the case of an annual report) 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(s) 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 functions):

          (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: May 15, 2017

/s/ Timothy Keogh

Timothy Keogh

Principal Executive Officer

EX-31.2

 Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULES 13a-14(a) AND 15a-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

I, Benjamin Barton, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 of AmeriCann, 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(s) 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 on 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 (the registrant's fourth fiscal quarter in the case of an annual report) 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(s) 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 functions):

          (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: May 15, 2017

/s/ Benjamin Barton

Benjamin Barton

Principal Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of AmeriCann, Inc. (the “Company”), for the quarter ended March 31, 2017, as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned, Timothy Keogh, principal executive officer of the Company, and Benjamin Barton, principal financial officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ Timothy Keogh
	Timothy Keogh
	Principal Executive Officer
Dated May 15, 2017
By:	/s/ Benjamin Barton
	Benjamin Barton
	Principal Financial Officer

Dated May 15, 2017

XML

Document And Entity Information - shares	6 Months Ended
	Mar. 31, 2017	May 03, 2017
Document Information [Line Items]
Entity Registrant Name	Americann, Inc.
Entity Central Index Key	0001508348
Trading Symbol	acan
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		19,181,000
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Current Assets:
Cash and cash equivalents	$ 204,411	$ 24
Interest receivable	527	2,521
Current portion of prepaid land lease	57,959
Prepaid expenses and other current assets	11,726	11,726
Note receivable	62,747	247,378
Total current assets	337,370	261,649
Land held for resale	2,250,809	2,250,809
Construction in progress	214,881
Furniture and equipment (net of depreciation of $3,143 and $2,581)	4,714	5,276
Notes and other receivables (net of allowance of $469,699 and $469,699)	780,315	780,315
Note receivable - related party	98,741	57,693
Website development costs (net of amortization of $21,903 and $14,986)	19,597	26,514
Prepaid land lease and related deposits, net of current portion	2,811,027	925,000
Security deposit	3,110	3,110
Total assets	6,520,564	4,310,366
Current Liabilities:
Accounts payable and accrued expenses	54,448	385,380
Interest payable (including $0 and $109,825 to related parties)	30,270	118,749
Other payables	23,008	14,927
Notes payable (net of discount of $0 and $35,250)	990,000	1,157,997
Total current liabilities	1,097,726	1,677,053
Note payable - related party (inclusive of premium of $57,719 and $72,651)	1,989,365	2,024,297
Total liabilities	3,087,091	3,701,350
Commitments and contingencies - see Note 9
Stockholders' Equity:
Preferred stock, $0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.0001 par value; 100,000,000 shares authorized; 19,181,000 and 17,031,000 shares issued and outstanding as of March 31, 2017 and September 30, 2016, respectively	1,918	1,703
Additional paid in capital	10,366,219	6,512,244
Accumulated deficit	(6,934,664)	(5,904,931)
Total stockholders' equity	3,433,473	609,016
Total liabilities and stockholders' equity	$ 6,520,564	$ 4,310,366

XML

Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Furniture and equipment, accmulated depreciation	$ 3,143	$ 2,581
Notes and other receivables, allowance	469,699	469,699
Website development costs, accumulation amortization	21,903	14,986
Interest payable, related parties	0	109,825
Notes payable discount	0	35,250
Note payable, related party, discount	$ 57,719	$ 72,651
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	19,181,000	17,031,000
Common stock, shares outstanding (in shares)	19,181,000	17,031,000

XML

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Consulting fees	$ 15,000	$ 15,000	$ 30,000	$ 30,000
Total revenues	15,000	15,000	30,000	30,000
Operating expenses:
Advertising and marketing	4,973	250	7,220	2,348
Professional fees	148,686	134,751	201,083	353,080
General and administrative expenses	364,817	162,400	653,250	337,545
Provision for doubtful accounts		3,289		6,614
Total operating expenses	518,476	300,690	861,553	699,587
Loss from operations	(503,476)	(285,690)	(831,553)	(669,587)
Other income (expense):
Interest income	2,584	45,492	10,759	93,787
Interest expense	(57,762)	(32,249)	(139,337)	(64,205)
Interest expense - related party	(36,634)	(23,594)	(69,602)	(45,452)
Total other income (expense)	(91,812)	(10,351)	(198,180)	(15,870)
Net loss	$ (595,288)	$ (296,041)	$ (1,029,733)	$ (685,457)
Basic and diluted loss per common share (in dollars per share)	$ (0.03)	$ (0.02)	$ (0.06)	$ (0.04)
Weighted average common shares outstanding (in shares)	19,136,555	16,631,000	18,706,825	16,631,000

XML

Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net loss	$ (1,029,733)	$ (685,457)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	7,479	7,478
Provision for doubtful accounts		6,614
Stock based compensation and option expense	37,450	102,799
Amortization of debt discount/(premium)	20,318	0
Changes in operating assets and liabilities:
Interest receivable	1,994	1,951
Amounts due from WGP		(64,371)
Prepaid expenses	28,980	25,022
Accounts payable and accrued expenses	(330,932)	127,856
Interest payable	21,346	25,467
Interest payable - related party	(109,825)	45,452
Other payables	8,081	(8,018)
Deferred revenue		5,000
Net cash flows used in operations	(1,344,842)	(410,207)
Cash flows from investing activities:
Additions to construction in progress	(214,881)	(4,327)
Deposit on land	0	(250,000)
Payments received on notes receivable	214,631	184,234
Advances made on notes receivable - related party	(41,048)
Advances made on notes receivable	(30,000)	0
Net cash flows used in investing activities	(71,298)	(70,093)
Cash flows from financing activities:
Common stock issued for cash, net	1,843,774	0
Proceeds from note payable	24,657	116,185
Proceeds from note payable - related party	0	227,500
Payments on note payable - related party	(20,000)	0
Payments on note payable	(227,904)	0
Net cash flows provided by financing activities	1,620,527	343,685
Net increase (decrease) in cash and cash equivalents	204,387	(136,615)
Cash and cash equivalents at beginning of period	24	201,353
Cash and cash equivalents at end of period	204,411	64,738
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest (including $194,368 to related parties)	277,100	15,932
Cash paid for income taxes	0	0
Non-Cash Investing and Financing Activities:
Shares and warrants issued to lessor as consideration for land lease	$ 1,972,966

XML

Note 1 - Nature of Business and Basis of Presentation

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

NOTE

1.

NATURE

OF BUSINESS AND

BASIS OF PRESENTATION

AmeriCann, Inc. ("the Company", “we”, “our” or "the Issuer") was organized under the laws of the State of Delaware on

June

25,

2010.

On

January

17,

2014,

a privately held limited liability company acquired approximately

93%

of the Company's outstanding shares of common stock from several of the Company's shareholders, which resulted in a change in control of the Company.

The Company's business plan is to offer a comprehensive, turnkey package of services that includes consulting, design, construction and financing to approved and licensed marijuana operators throughout the United States. The Company's business plan is based on the anticipated growth of the regulated marijuana market in the United States.

The Company's activities are subject to significant risks and uncertainties including failure to secure funding to properly expand its operations.

Basis of Presentation

The (a) balance sheet as of

September

30,

2016,

which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the

three

and

six

months ended

March

31,

2017

and

2016,

have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form

10

-K filed with the SEC on

January

12,

2017.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal

2016

as reported in the Form

10

-K have been omitted.

Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have no impact on net loss.

Recent Accounting Pronouncements

In

March

2017,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2017

-

08,

Receivables—Nonrefundable Fees and Other Costs (Subtopic

310

-

20):

Premium Amortization on Purchased Callable Debt Securities, to amend the amortization period for certain purchased callable debt securities held at a premium. The ASU shortens the amortization period for the premium to the earliest call date. Under current Generally Accepted Accounting Principles (“GAAP”), entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The amendments should be applied on a modified retrospective basis, and are effective for fiscal years beginning after

December

15,

2018.

Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this amendment on its financial statements.

In

February

2017,

the FASB issued ASU No.

2017

-

05,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic

610

-

20):

Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, to clarify the scope of Subtopic

610

-

20,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic

610

-

20,

which was issued in

May

2014

as a part of ASU No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606),

provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after

December

15,

2017,

including interim periods within those fiscal years, which is the same time as the amendments in ASU No.

2014

-

09,

and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its financial statements.

In

January

2017,

the FASB issued ASU No.

2017

-

03,

Accounting Changes and Error Corrections (Topic

250).

The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606);

ASU No.

2016

-

02,

Leases (Topic

842);

and ASU No.

2016

-

13,

Financial Instruments—Credit Losses (Topic

326):

Measurement of Credit Losses on Financial Instruments.   The Company is currently evaluating the impact of these amendments on its financial statements.

Between

May

2014

and

December

2016,

the FASB issued several ASU’s on Revenue from Contracts with Customers (Topic

606).

These updates will supersede nearly all existing revenue recognition guidance under current U.S. generally accepted accounting principles (GAAP). The core principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. A

five

-step process has been defined to achieve this core principle, and, in doing so, more judgment and estimates

may

be required within the revenue recognition process than are required under existing U.S. GAAP. The standards are effective for annual periods beginning after

December

15,

2017,

and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standards in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting the standards recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of these standards on its financial statements and has not yet determined the method by which it will adopt the standard in

2018.

In

November

2016,

the FASB issued ASU No.

2016

-

18,

Statement of Cash Flows (Topic

230):

Restricted Cash (a consensus of the FASB Emerging Issues Task Force), to provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flow. The amendments should be applied using a retrospective transition method, and are effective for fiscal years beginning after

December

15,

2017,

including interim periods within those fiscal years. The Company is currently evaluating the impact of these amendments on its financial statements.

XML

Note 2 - Going Concern

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

NOTE

2.

GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of

$6,934,664

and

$5,904,931

at

March

31,

2017,

and

September

30,

2016,

respectively, and had a net loss of

$1,029,733

for the

six

months ended

March

31,

2017.

Further, the amount due from Wellness Group Pharms, LLC (“WGP”) of

$1,250,014

(before an allowance of

$469,699)

may

not be collectible. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position

may

not be significant enough to support the Company's daily operations. Management intends to raise additional funds through the sale of its securities. The Company filed a Demand for Arbitration against WGP on

April

7,

2017.

See Note

11,

Subsequent Events, for additional discussion.

Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

XML

Note 3 - Notes and Other Receivables

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE

3.

NOTES

AND OTHER

RECEIVABLE

S

Notes and Other Receivables as of

March

31,

2017,

and

September

30,

2016,

consisted of the following: 

	March 31, 2017		September 30, 2016
Note receivable from 4900 Jackson, LLC, a licensed dispensary, interest rate of 12.0%; monthly principal and interest payments of $50,000, with a balloon payment of $182,531 due on May 1, 2017; collateralized by the borrower's assets.	$	62,747	$	247,378
Notes and other receivables from WGP, a licensed medical marijuana cultivator; $673,294 note secured by real and personal property of the borrower, interest rate of 18.0%; accrued consulting fees of $40,000, construction advances of $332,357 and accrued interest of $204,363. Net of reserves of $469,699. All amounts are due and payable immediately.		780,315		780,315
Related party note receivable from CCI, a non-profit corporation, financing of up to $2.5 million through April 2021, interest rate of 18.0%; monthly principal and interest payments commencing the sixth month after CCI begins to generate sales; construction and working capital advances of $93,049, and accrued interest of $5,692; unsecured.		98,741		57,693
		941,803		1,085,386
Less: Current portion		62,747		247,378
	$	879,056	$	838,008

The notes and other receivables from WGP are classified as long term due to ongoing disputes between the Company and WGP. The Company filed a Demand for Arbitration against WGP on

April

7,

2017.

See Note

11,

Subsequent Events, for additional discussion.

XML

Note 4 - Notes Payable

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

4

.

 NOTE

S

PAYABLE

Unrelated

On

September

15,

2015,

an unrelated

third

party loaned the Company

$900,000.

The loan bore interest at

12%

per year and was due and payable on

March

16,

2016.

The Company used

$650,000

of the proceeds to repay existing loans that were secured by the land held for sale. On

April

6,

2016,

the loan was modified to increase the principal balance to

$990,000,

increase the interest rate to

18%

per year, and extend the due date to

March

15,

2017.

On

March

15,

2017,

the maturity date of the loan was extended to

March

15,

2018,

and the interest rate remained the same at

18%

per year. The Company

may

repay the loan at any time without penalty. The loan is secured by a

first

lien on the

five

-acre parcel of land in Denver. Accrued interest on this note payable at

March

31,

2017

and

September

30,

2016

was

$30,270

and

$8,924,

respectively.

In

September

2016,

we had borrowed funds from various unrelated parties. The interest rates on these notes ranged from

8%

to

18%,

due dates ranged from

December

14,

2016,

through

January

15,

2017,

and

$75,000

was convertible into the Company’s common stock at a conversion price of

$0.75.

In addition to the notes, we issued warrants to purchase

75,000

shares of our common stock, exercisable at a price of

$0.75

per share, and warrants to purchase an additional

75,000

shares of common stock, exercisable at a price of

$1.25

per share. Both sets of warrants expire on

September

15,

2020.

We allocated the new proceeds to the warrants, stock options, and the convertible debt based on their relative fair values, as determined by the Black Scholes option pricing model. Based on the Black Scholes option pricing model,

$35,250

was allocated to the warrants which are reflected in additional paid-in-capital and

$35,250

was allocated to a debt discount. The debt discount is being amortized on a straight-line basis over the term of the note. At

March

31,

2017,

there was no outstanding principal or interest, and no unamortized debt discount due to the full payment of the notes.

Related Party

On

February

1,

2016,

we entered into an agreement with an unrelated party which provided us with borrowing capacity of

$200,000.

 On

May

1,

2016,

the agreement was amended to increase the borrowing capacity to

$1,000,000.

On

July

14,

2016,

Strategic Capital Partners (“SCP”) assumed the

$521,297

loan borrowed against this credit line, increasing the total balance owed to SCP to

$2,431,646.

SCP is controlled by Benjamin J. Barton,

one

of our officers and directors and a principal shareholder. The amounts borrowed from SCP were used to fund our operations.

On

July

14,

2016,

we entered into a debt modification agreement whereby a portion of the debt was converted into common stock and the remaining debt was renegotiated into

two

promissory notes.

Of the amounts owed to SCP,

$500,000

was converted into

400,000

shares of our common stock

($1.25

conversion rate).

The remaining

$1,931,646

owed to SCP was divided into

two

promissory notes.

The

first

note, in the principal amount of

$1,000,000,

bears interest at

9.5%

per year and matures on

December

31,

2019.

Interest is payable quarterly. The note can be converted at any time, at the option of the lender, into shares of our common stock, initially at a conversion price of

$1.25

per share. The conversion price will be proportionately adjusted in the event of any stock split or capital reorganization. The note is not secured. Accrued interest on this note payable at

March

31,

2017

and

September

30,

2016

was

$0

and

$20,301,

respectively.

If the average closing price of our common stock is at least

$2.50

for

twenty

consecutive trading days, and the average daily volume of trades of our common stock during the

twenty

trading days is at least

100,000

shares, we

may,

within

10

days of the end of such

twenty

-day period, notify SCP that its right to convert the note into shares of our common stock will end

45

days after the date of the notice to SCP.

The

second

note, in the principal amount of

$931,646,

bears interest at

8%

per year and matures on

December

31,

2019.

Interest is payable quarterly. The note is not convertible into shares of our common stock. The note is secured by a

second

lien on our property in Denver, Colorado and a

first

lien on all amounts due to us by WGP. Any payments received from the sale, lease or commercialization of the property in Denver, and any amounts received from WGP, will be applied to the principal amount of the note. Otherwise, all unpaid principal and interest will be due on

December

31,

2019.

Accrued interest on this note payable at

March

31,

2017

and

September

30,

2016

was $

0

and

$15,297,

respectively.

In connection with the debt modification agreement, we issued SCP warrants to purchase

800,000

shares of our common stock, exercisable at a price of

$1.50

per share, and warrants to purchase an additional

800,000

shares of common stock, exercisable at a price of

$3.00

per share. Both sets of warrants expire on

June

30,

2020.

We allocated the relative fair values to the warrants, stock options, and convertible debt, as determined by the Black Scholes option pricing model. Based on the Black Scholes option pricing model, a net debt premium of

$72,651

was allocated to the warrants which are reflected in additional paid-in-capital. The debt premium is being amortized on a straight-line basis over the term of the notes. At

March

31,

2017,

the outstanding principal on these notes was

$1,931,646,

and the unamortized debt premium was

$57,719.

Amortization of debt premium was

$5,169

and

$14,932

for the

three

and

six

months ended

March

31,

2017.

There was

no

such amortization for the

three

and

six

months ended

March

31,

2016.

XML

Note 5 - Related Party Transactions

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE

5

. RELATED PARTY TRANSACTIONS

Strategic Capital Partners.

 At

March

31,

2017

and

September

30,

2016,

we had outstanding notes and accrued interest payable, inclusive of premium, to SCP of

$1,989,365

and

$2,024,297,

respectively.

Interest expense was

$36,634

and

$23,594

for the

three

months ended

March

31,

2017

and

2016,

respectively; and

$69,602

and

$45,452

for the

six

months ended

March

31,

2017

and

2016.

There was no interest payable to related parties at

March

31,

2017.

Interest payable – related party of

$109,825

was included in the accompanying balance sheets at 

September

30,

2016.

  We made interest payments of

$194,368

during

2017,

and made no interest payments during

2016

associated with this related party notes payable.  During the

six

months ended

March

31,

2017,

we received advances of

$0

and made payments of

$20,000.

During the

six

months ended

March

31,

2016,

we received advances of

$227,500

and made no payments.

Coastal Compassion.

 On

April

7,

2016,

we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is

one

of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial

tenant

in our planned Massachusetts Medical Cannabis Center (“MMCC”). Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

Pursuant to the agreements, we agreed to provide CCI with financing of up to

$2.5

million for a

five

-year term at

18%

interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a

three

-year period beginning

April

1,

2016,

we agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will owe us

$10,000

each month for these consulting services, but is not required to pay until

six

months after generating certain revenues. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of

March

31,

2017,

we have provided financing to CCI of

$98,741,

which includes construction and working capital advances of

$93,049

and accrued interest of

$5,692.

XML

Note 6 - Loss Per Share

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

6

.

LOSS

PER SHARE

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
Net loss attributable to common stockholders	$	(595,288	)	$	(296,041	)	$	(1,029,733	)	$	(685,457	)
Basic weighted average outstanding shares of common stock		19,136,555			16,631,000			18,706,825			16,631,000
Dilutive effects of common share equivalents		-			-			-			-
Dilutive weighted average outstanding shares of common stock		19,136,555			16,631,000			18,706,825			16,631,000
Basic and diluted net loss per share of common stock	$	(0.03	)	$	(0.02	)	$	(0.06	)	$	(0.04	)

We have excluded

1,155,000

of stock options and

9,981,000

of warrants from the computation of diluted net loss per share since the effects are anti-dilutive.

XML

Note 7 - Income Taxes

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

7

. INCOME TAXES

We did not record any income tax expense or benefit for the

three

or

six

months ended

March

31,

2017.

We increased our valuation allowance and reduced our net deferred tax assets to

zero

.

Our assessment of the realization of our deferred tax assets has not changed, and as a result we continue to maintain a full valuation allowance for our net deferred assets as of

March

31,

2017.

As of

March

31,

2017,

we did not have any unrecognized tax benefits. There were no significant changes to the calculation since

September

30,

2016.

XML

Note 8 - Stock Based Compensation

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE

8

.

STOCK BASED COMPENSATION

Restricted Stock Awards.

We use restricted stock awards to compensate certain key executives and other individuals. At

March

31,

2017,

we had no outstanding unvested restricted stock awards. Stock-based compensation expense associated with restricted stock awards was

$18,725

and

$46,813

for the

three

months ended

March

31,

2017

and

2016,

respectively, and

$37,450

and

$93,626

for the

six

months ended

March

31,

2017

and

2016,

respectively. As of

March

31,

2017,

there is no remaining unrecognized stock-based compensation associated with restricted stock awards.

Stock Options.

Stock option activity as of and for the

six

months ended

March

31,

2017

is as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding at September 30, 2016		1,205,000	$	8.70		1.5	$	-
Granted		-		-		-		-
Cancelled		-		-		-		-
Exercised		50,000	$	0.75		2.0		-
Outstanding as of March 31, 2017		1,155,000	$	9.04		1.0	$	-
Vested and expected to vest at March 31, 2017		1,155,000	$	9.04		1.0	$	-
Exercisable at March 31, 2017		1,155,000	$	9.04		1.0	$	-

Stock-based compensation expense associated with stock options totaled

$0

and

$4,264

for the

three

months ended

March

31,

2017

and

2016,

respectively; and

$0

and

$9,173

for the

six

months ended

March

31,

2017

and

2016,

respectively. At

March

31,

2017,

there is

no

remaining unrecognized stock-based compensation associated with stock options. During the

three

and

six

months ended

March

31,

2017,

we received proceeds of

$37,500

from stock option exercises.

XML

Note 9 - Commitments and Contingencies

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

9

.

 COMMITMENTS AND CONTIGENC

IES

Coastal Compassion.

On

April

7,

2016,

we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is

one

of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial

tenant

in our planned MMCC. Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

Pursuant to the agreements, we agreed to provide CCI with financing of up to

$2.5

million for a

five

-year term at

18%

interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a

three

- year period beginning

April

1,

2016,

we agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will owe us

$10,000

each month for these consulting services, but is not required to pay until

six

months after generating certain revenues. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of

March

31,

2017,

we have provided financing to CCI of

$98,741,

which includes construction and working capital advances of

$93,049

and accrued interest of

$5,692.

Operating Leases

Land

On

October

17,

2016,

the Company closed the previously announced acquisition of a

52.6

-acre parcel of undeveloped land in Freetown, Massachusetts. The deposits of

$925,000

previously paid by the Company to the seller, Boston Beer Company (“BBC”), were credited against the total purchase price of

$4,475,000.

The remaining balance of

$3,550,000

was paid to BBC by Massachusetts Medical Properties, LLC (“MMP”). The property is located approximately

47

miles southeast of Boston. The Company plans to develop the property as the MMCC. Plans for the MMCC include the construction of sustainable greenhouse cultivation, processing, and infused product facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program.

As part of a simultaneous transaction, the Company assigned the property rights to MMP for a nominal fee and entered a lease agreement pursuant to which MMP agreed to lease the property to the Company for an initial term of

fifty

(50)

years. We have the option to extend the term of the lease for

four

(4)

additional

ten

(10)

year periods. The lease is a triple net lease, with the Company paying all real estate taxes, repairs, maintenance and insurance.

The lease payments will be the greater of (a)

$30,000

per month; (b)

$0.38

per square foot per month of any structure built on the property; or (c)

1.5%

of all gross monthly sales of products sold by the Company, any assignee of the Company, or any subtenant of the Company. The lease payments will be adjusted up (but not down) every

five

(5)

years by any increase in the Consumer Price Index.

Between

October

17,

2016

and

April

17,

2017,

the monthly lease payments will accrue, with all accrued lease payments to be paid to MMP on

April

17,

2017.

On

April

17,

2017,

the Company will reimburse MMP’s costs and expenses associated with the acquisition of the property, the lease, and the acquisition of the shares and the warrant from the Company (as further described below).

Under the terms of the lease, the Company has

six

(6)

months to obtain capital funding for the construction of the

first

phase building. In the event that the Company is unable to raise these funds within the

six

(6)

month period, the Company will have an additional

six

(6)

month period to do so; provided, that the Company has paid accrued lease payments and closing costs. If the Company is then unable to raise these funds on or before

twelve

(12)

months from

October

17,

2016,

the lease will terminate. As of

March

31,

2017,

the Company has paid all accrued lease payments and closing costs.

The Company shall receive credit for the

$925,000

paid towards the purchase price of the land in the form of discounted lease payments. For the initial

fifty

(50)

year term of the lease, the lease payments will be reduced by

$1,542

each month.

 In connection with the sale of the property to MMP and the lease, the Company and MMP entered into a Share Purchase Agreement pursuant to which the Company issued to MMP

100,000

shares of its common stock at par value of

$0.0001

(“Common Stock”), and a warrant to purchase up to

3,640,000

shares of Common Stock at an exercise price of

$1.00

per share. The warrant can be exercised at any time on or after

October

17,

2018

and on or before

October

17,

2020.

The warrant does not contain a cashless exercise provision.

The fair value of the warrant was established using the Black Scholes option pricing model using the following assumptions:

● Risk-free interest rate – 1.12 percent

● Expected term – 4.0 years

● Volatility – 115 percent

The Company allocated

$1,899,966

to the warrant which is reflected in additional paid-in-capital and was allocated to prepaid land lease. The fair value of the common stock on the date of the agreement was

$73,000,

which is also reflected in additional paid-in-capital and was allocated to prepaid land lease. The prepaid land lease is being amortized on a straight-line basis over the term of the lease.

The lease expense was

$208,184

and

$307,036

for the

three

and

six

months ended

March

31,

2017.

No such expense was incurred in the

three

and

six

months ended

March

31,

2016.

  At

March

31,

2017,

the future rental payments required under this lease are 

$142,290

for the remainder of fiscal

2017,

$341,496

for fiscal years

2018

through

2021,

and

$15,367,520

thereafter.

Office space

The Company leases its office space located at

3200

Brighton Boulevard, Denver, Colorado for

$2,870

per month under a month-to-month lease.

The Company leases an automobile under an operating lease commencing

October

4,

 

2014

for

39

months at

$611

per month. At

March

31,

2017,

the future rental payments required under this lease are 

$3,666

for the remainder of fiscal

2017

and

$910

for fiscal

2018.

Except as described above, the Company has no other non-cancelable lease commitments.

XML

Note 10 - Shareholders' Equity

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

1

0

.

SHAREHOLDERS’ EQUITY

Sale of Equity Securities.

 On

November

7,

2016,

we sold

2,000,000

Units at a price of

$1.00

per Unit. The Units were sold in a private offering to a group of accredited investors. Each Unit consisted of

one

share of our common stock and

one

Series I Warrant. Each Series I Warrant allows the Holder to purchase

one

share of our common stock at a price of

$3.00

per share at any time on or before

November

4,

2020.

The relative fair value of the warrants issued was approximately

43%

of the proceeds received.

The offering provided us with

$2,000,000

in gross proceeds and the potential for an additional

$6,000,000

in proceeds with the exercise of the Series I Warrants. The proceeds from the placement will be utilized for the MMCC development, to pursue new opportunities in California, Pennsylvania, Florida and other states, and general corporate purposes.

Shares issued to lessor.

As described in Note

9,

we entered into a Share Purchase Agreement with MMP pursuant to which we issued to MMP

100,000

shares of our common stock at par value of

$0.0001

(“Common Stock”), and a warrant to purchase up to

3,640,000

shares of Common Stock at an exercise price of

$1.00

per share. The warrant can be exercised at any time on or after

October

17,

2018

and on or before

October

17,

2020.

The warrant does not contain a cashless exercise provision.

Warrants

.

Warrant activity as of and for the

six

months ended

March

31,

2017

is as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding at September 30, 2016		4,341,000	$	6.19		2.1	$	-
Granted		5,640,000	$	1.71		3.8	$	-
Cancelled		-		-		-		-
Exercised		-		-		-		-
Outstanding as of March 31, 2017		9,981,000	$	3.66		2.8	$	-
Vested and expected to vest at March 31, 2017		9,981,000	$	3.66		2.8	$	-
Exercisable at March 31, 2017		9,981,000	$	3.66		2.8	$	-

XML

Note 11 - Subsequent Events

6 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

1

1

.

SUBSEQUENT EVENTS

On

April

7,

2017,

we filed an arbitration claim against WGP. In our arbitration claim we requested an award for damages consisting of

$1,005,000

previously advanced to WGP, unpaid consulting fees of

$2,880,000,

amounts that should have been paid to us under the lease agreement, including the base annual rent of

$1,944,000

per year, interest at the rate of

25%

on damages awarded by the Arbitrator, all costs and attorney’s fees incurred in the arbitration, and the immediate appointment of a receiver by the Arbitrator pursuant to the terms of our agreements with WGP.

XML

Significant Accounting Policies (Policies)

6 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The (a) balance sheet as of

September

30,

2016,

which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the

three

and

six

months ended

March

31,

2017

and

2016,

have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form

10

-K filed with the SEC on

January

12,

2017.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal

2016

as reported in the Form

10

-K have been omitted.

Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have no impact on net loss.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In

March

2017,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2017

-

08,

Receivables—Nonrefundable Fees and Other Costs (Subtopic

310

-

20):

Premium Amortization on Purchased Callable Debt Securities, to amend the amortization period for certain purchased callable debt securities held at a premium. The ASU shortens the amortization period for the premium to the earliest call date. Under current Generally Accepted Accounting Principles (“GAAP”), entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The amendments should be applied on a modified retrospective basis, and are effective for fiscal years beginning after

December

15,

2018.

Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this amendment on its financial statements.

In

February

2017,

the FASB issued ASU No.

2017

-

05,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic

610

-

20):

Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, to clarify the scope of Subtopic

610

-

20,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic

610

-

20,

which was issued in

May

2014

as a part of ASU No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606),

provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after

December

15,

2017,

including interim periods within those fiscal years, which is the same time as the amendments in ASU No.

2014

-

09,

and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its financial statements.

In

January

2017,

the FASB issued ASU No.

2017

-

03,

Accounting Changes and Error Corrections (Topic

250).

The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606);

ASU No.

2016

-

02,

Leases (Topic

842);

and ASU No.

2016

-

13,

Financial Instruments—Credit Losses (Topic

326):

Measurement of Credit Losses on Financial Instruments.   The Company is currently evaluating the impact of these amendments on its financial statements.

Between

May

2014

and

December

2016,

the FASB issued several ASU’s on Revenue from Contracts with Customers (Topic

606).

These updates will supersede nearly all existing revenue recognition guidance under current U.S. generally accepted accounting principles (GAAP). The core principle is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. A

five

-step process has been defined to achieve this core principle, and, in doing so, more judgment and estimates

may

be required within the revenue recognition process than are required under existing U.S. GAAP. The standards are effective for annual periods beginning after

December

15,

2017,

and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standards in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting the standards recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of these standards on its financial statements and has not yet determined the method by which it will adopt the standard in

2018.

In

November

2016,

the FASB issued ASU No.

2016

-

18,

Statement of Cash Flows (Topic

230):

Restricted Cash (a consensus of the FASB Emerging Issues Task Force), to provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flow. The amendments should be applied using a retrospective transition method, and are effective for fiscal years beginning after

December

15,

2017,

including interim periods within those fiscal years. The Company is currently evaluating the impact of these amendments on its financial statements.

XML

Note 3 - Notes and Other Receivables (Tables)

6 Months Ended

Mar. 31, 2017

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	March 31, 2017		September 30, 2016
Note receivable from 4900 Jackson, LLC, a licensed dispensary, interest rate of 12.0%; monthly principal and interest payments of $50,000, with a balloon payment of $182,531 due on May 1, 2017; collateralized by the borrower's assets.	$	62,747	$	247,378
Notes and other receivables from WGP, a licensed medical marijuana cultivator; $673,294 note secured by real and personal property of the borrower, interest rate of 18.0%; accrued consulting fees of $40,000, construction advances of $332,357 and accrued interest of $204,363. Net of reserves of $469,699. All amounts are due and payable immediately.		780,315		780,315
Related party note receivable from CCI, a non-profit corporation, financing of up to $2.5 million through April 2021, interest rate of 18.0%; monthly principal and interest payments commencing the sixth month after CCI begins to generate sales; construction and working capital advances of $93,049, and accrued interest of $5,692; unsecured.		98,741		57,693
		941,803		1,085,386
Less: Current portion		62,747		247,378
	$	879,056	$	838,008

XML

Note 6 - Loss Per Share (Tables)

6 Months Ended

Mar. 31, 2017

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
Net loss attributable to common stockholders	$	(595,288	)	$	(296,041	)	$	(1,029,733	)	$	(685,457	)
Basic weighted average outstanding shares of common stock		19,136,555			16,631,000			18,706,825			16,631,000
Dilutive effects of common share equivalents		-			-			-			-
Dilutive weighted average outstanding shares of common stock		19,136,555			16,631,000			18,706,825			16,631,000
Basic and diluted net loss per share of common stock	$	(0.03	)	$	(0.02	)	$	(0.06	)	$	(0.04	)

XML

Note 8 - Stock Based Compensation (Tables)

6 Months Ended

Mar. 31, 2017

Notes Tables

Share-based Compensation, Stock Options, Activity [Table Text Block]

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding at September 30, 2016		1,205,000	$	8.70		1.5	$	-
Granted		-		-		-		-
Cancelled		-		-		-		-
Exercised		50,000	$	0.75		2.0		-
Outstanding as of March 31, 2017		1,155,000	$	9.04		1.0	$	-
Vested and expected to vest at March 31, 2017		1,155,000	$	9.04		1.0	$	-
Exercisable at March 31, 2017		1,155,000	$	9.04		1.0	$	-

XML

Note 10 - Shareholders' Equity (Tables)

6 Months Ended

Mar. 31, 2017

Notes Tables

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding at September 30, 2016		4,341,000	$	6.19		2.1	$	-
Granted		5,640,000	$	1.71		3.8	$	-
Cancelled		-		-		-		-
Exercised		-		-		-		-
Outstanding as of March 31, 2017		9,981,000	$	3.66		2.8	$	-
Vested and expected to vest at March 31, 2017		9,981,000	$	3.66		2.8	$	-
Exercisable at March 31, 2017		9,981,000	$	3.66		2.8	$	-

XML

Note 1 - Nature of Business and Basis of Presentation (Details Textual)	Jan. 17, 2014
Ownership Percentage, Transfered	93.00%

XML

Note 2 - Going Concern (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Retained Earnings (Accumulated Deficit)	$ (6,934,664)		$ (6,934,664)		$ (5,904,931)
Net Income (Loss) Attributable to Parent	(595,288)	$ (296,041)	(1,029,733)	$ (685,457)
Allowance for Notes, Loans and Financing Receivable, Noncurrent	469,699		469,699		469,699
Wellness Group Pharms LLC [Member]
Notes, Loans and Financing Receivable, Gross, Noncurrent	1,250,014		1,250,014
Allowance for Notes, Loans and Financing Receivable, Noncurrent	$ 469,699		$ 469,699		$ 469,699

XML

Note 3 - Notes Receivables - Schedule of Notes Receivables (Details) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Notes and other receivables	$ 941,803	$ 1,085,386
Total loans	941,803	1,085,386
Less: Current portion	62,747	247,378
Notes, Loans, and Financing Receivable, Net, Noncurrent	879,056	838,008
4900 Jackson LLC [Member]
Notes and other receivables	62,747	247,378
Total loans	62,747	247,378
Wellness Group Pharms LLC [Member]
Notes and other receivables	780,315	780,315
Total loans	780,315	780,315
Coastal Compassion Inc. [Member]
Notes and other receivables	98,741	57,693
Total loans	$ 98,741	$ 57,693

XML

Note 3 - Notes Receivables - Schedule of Notes Receivables (Details) (Parentheticals) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Notes and other receivables, allowance	$ 469,699	$ 469,699
4900 Jackson LLC [Member]
Interest rate	12.00%	12.00%
Monthly principal payments and interest payments	$ 50,000	$ 50,000
Balloon payment	$ 182,531	$ 182,531
Wellness Group Pharms LLC [Member]
Interest rate	18.00%	18.00%
Secured note	$ 673,294	$ 673,294
Accrued consulting fees	40,000	40,000
Construction advances	332,357	332,357
Accrued interest	204,363	204,363
Notes and other receivables, allowance	$ 469,699	$ 469,699
Coastal Compassion Inc. [Member]
Interest rate	18.00%	18.00%
Construction advances	$ 93,049	$ 93,049
Accrued interest	5,692	5,692
Maximum financing amount	$ 2,500,000	$ 2,500,000

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Note 4 - Notes Payable (Details Textual)			1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 14, 2016 USD ($) $ / shares shares	Sep. 15, 2015 USD ($)	Sep. 30, 2016 USD ($) $ / shares shares	Mar. 31, 2017 USD ($) $ / shares	Mar. 31, 2016 USD ($)	Mar. 31, 2017 USD ($) $ / shares	Mar. 31, 2016 USD ($)	Mar. 15, 2017	May 01, 2016 USD ($)	Apr. 06, 2016 USD ($)	Feb. 01, 2016 USD ($)
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares			$ 6.19	$ 3.66		$ 3.66
Debt Instrument, Unamortized Discount			$ 35,250	$ 0		$ 0
Amortization of Debt Discount (Premium)						20,318	$ 0
Strategic Capital Partners [Member]
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 1.25
Line of Credit Outstanding Amount Assumed by Related Party	$ 521,297
Notes Payable, Related Parties	$ 2,431,646		$ 2,024,297	1,989,365		1,989,365
Debt Conversion, Converted Instrument, Shares Issued | shares	400,000
Debt Instrument, Unamortized Premium	$ 72,651			57,719		57,719
Long-term Debt, Gross				1,931,646		1,931,646
Amortization of Debt Discount (Premium)				(5,169)	$ 0	(14,932)	$ 0
Strategic Capital Partners [Member] | Debt Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount	500,000
Strategic Capital Partners [Member] | Debt Converted into Promissory Notes [Member]
Debt Conversion, Original Debt, Amount	$ 1,931,646
Unrelated Party [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares			75,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares			$ 0.75
Adjustments to Additional Paid in Capital, Warrant Issued			$ 35,250
Warrants to Purchase Additional Shares [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares			75,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares			$ 1.25
Warrants to Purchase Additional Shares [Member] | Strategic Capital Partners [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	800,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 3
Warrant to Related Party, Set 1 [Member] | Strategic Capital Partners [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	800,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 1.50
Promissory Note One [Member] | Strategic Capital Partners [Member]
Debt Instrument, Interest Rate, Stated Percentage	9.50%
Interest Payable			$ 20,301	0		0
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 1.25
Notes Payable, Related Parties	$ 1,000,000
Average Closing Price per Share | $ / shares	$ 2.50
Convertible Debt, Number of Trading Days	20
Average Daily Volume Of Shares Trades | shares	100,000
Period to Notify End of Right to Convert Notes	10 days
Period before Right to Convert Notes Expires	45 days
Promissory Note Two [Member] | Strategic Capital Partners [Member]
Debt Instrument, Interest Rate, Stated Percentage	8.00%
Interest Payable			15,297	0		0
Notes Payable, Related Parties	$ 931,646
Potential Buyer of Land, Held-for-sale [Member]
Proceeds from Short-term Debt		$ 900,000
Debt Instrument, Interest Rate, Stated Percentage		12.00%						18.00%		18.00%
Debt Instrument, Face Amount										$ 990,000
Interest Payable			8,924	30,270		30,270
Third Party [Member] | Loan Secured by Land [Member]
Repayments of Short-term Debt		$ 650,000
Unrelated Party [Member]
Interest Payable				0		0
Convertible Debt			$ 75,000	0		0
Debt Instrument, Convertible, Conversion Price | $ / shares			$ 0.75
Debt Instrument, Unamortized Discount			$ 35,250	$ 0		$ 0
Line of Credit Facility, Current Borrowing Capacity									$ 1,000,000		$ 200,000
Unrelated Party [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage			8.00%
Unrelated Party [Member] | Maximum [Member]
Debt Instrument, Interest Rate, Stated Percentage			18.00%

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Note 5 - Related Party Transactions (Details Textual) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Apr. 07, 2016	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016	Jul. 14, 2016
Interest Expense, Related Party		$ 36,634	$ 23,594	$ 69,602	$ 45,452
Interest Payable, Current		30,270		30,270		$ 118,749
Interest Paid				277,100	15,932
Proceeds from Related Party Debt				0	227,500
Repayments of Related Party Debt				20,000	0
Strategic Capital Partners [Member]
Notes Payable, Related Parties		1,989,365		1,989,365		2,024,297	$ 2,431,646
Interest Expense, Related Party		36,634	$ 23,594	69,602	45,452
Interest Payable, Current		0		0		109,825
Interest Paid				194,368		$ 0
Proceeds from Related Party Debt				0	227,500
Repayments of Related Party Debt				20,000	$ 0
Coastal Compassion Inc. [Member]
Working Capital Advances	$ 2,500,000
Working Capital Advances, Term	5 years
Note Receivable, Interest Rate	18.00%
Consulting Services Term	3 years
Consulting Services Revenue Monthly	$ 10,000
Coastal Compassion Inc. [Member] | Construction and Working Capital Advances [Member]
Due from Related Parties		98,741		98,741
Coastal Compassion Inc. [Member] | Construction and Working Capital Advances Excluding Accrued Interest [Member]
Due from Related Parties		93,049		93,049
Coastal Compassion Inc. [Member] | Construction and Working Capital Advances Related Accrued Interest [Member]
Due from Related Parties		$ 5,692		$ 5,692
Coastal Compassion Inc. [Member] | Maximum [Member]
Working Capital Advances	$ 2,500,000

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Note 6 - Loss Per Share (Details Textual)	6 Months Ended
	Mar. 31, 2017 shares
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,155,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	9,981,000

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Note 6 - Loss Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Net loss	$ (595,288)	$ (296,041)	$ (1,029,733)	$ (685,457)
Basic weighted average outstanding shares of common stock (in shares)	19,136,555	16,631,000	18,706,825	16,631,000
Dilutive effects of common share equivalents (in shares)	0	0	0	0
Dilutive weighted average outstanding shares of common stock (in shares)	19,136,555	16,631,000	18,706,825	16,631,000
Basic and diluted loss per common share (in dollars per share)	$ (0.03)	$ (0.02)	$ (0.06)	$ (0.04)

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Note 7 - Income Taxes (Details Textual) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2017 USD ($)	Mar. 31, 2017 USD ($)
Deferred Income Tax Assets, Net	$ 0	$ 0
Unrecognized Tax Benefits	0	0
Income Tax Expense (Benefit)	$ 0	$ 0

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Note 8 - Stock Based Compensation (Details Textual) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Proceeds from Stock Options Exercised	$ 37,500		$ 37,500
Restricted Stock [Member]
Allocated Share-based Compensation Expense	$ 18,725	$ 46,813	$ 37,450	$ 93,626
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	0		0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	$ 0		$ 0
Employee Stock Option [Member]
Allocated Share-based Compensation Expense	0	$ 4,264	0	$ 9,173
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 0		$ 0

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Note 8 - Stock Based Compensation - Stock Option Activity (Details) - $ / shares	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Shares Outstanding (in shares)	1,205,000
Outstanding, weighted average exercise price (in dollars per share)	$ 8.70
Outstanding, weighted average contractual term (Year)	1 year	1 year 182 days
Shares Granted (in shares)
Granted, weighted average exercise price (in dollars per share)
Shares Cancelled (in shares)
Cancelled, weighted average exercise price (in dollars per share)
Shares Exercised (in shares)	50,000
Exercised, weighted average exercise price (in dollars per share)	$ 0.75
Shares Outstanding (in shares)	1,155,000	1,205,000
Outstanding, weighted average exercise price (in dollars per share)	$ 9.04	$ 8.70
Shares Vested and expected to vest (in shares)	1,155,000
Vested and expected to vest at June 30, 2016, weighted average exercise price (in dollars per share)	$ 9.04
Vested and expected to vest at June 30, 2016, weighted average contractual term (Year)	1 year
Shares Exercisable (in shares)	1,155,000
Exercisable at June 30, 2016, weighted average exercise price (in dollars per share)	$ 9.04
Exercisable at June 30, 2016, weighted average contractual term (Year)	1 year

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Note 9 - Commitments and Contingencies (Details Textual)				3 Months Ended		6 Months Ended
	Oct. 17, 2016 USD ($) a $ / shares $ / item shares	Apr. 07, 2016 USD ($)	Oct. 04, 2014 USD ($)	Mar. 31, 2017 USD ($) $ / shares	Mar. 31, 2016 USD ($)	Mar. 31, 2017 USD ($) $ / shares	Mar. 31, 2016 USD ($)	Sep. 30, 2016 $ / shares
Common Stock, Par or Stated Value Per Share | $ / shares				$ 0.0001		$ 0.0001		$ 0.0001
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares				$ 3.66		$ 3.66		$ 6.19
Operating Leases, Office Space [Member]
Operating Leases, Monthly Payment						$ 2,870
Operating Leases, Automobile [Member]
Lessee, Operating Lease, Term of Contract			3 years 90 days
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year				$ 3,666		3,666
Operating Leases, Future Minimum Payments, Due in Two Years				910		910
Operating Leases, Monthly Payment			$ 611
Additional Paid-in Capital [Member]
Warrants Issued During Period, Value, Sale Leaseback Transaction	$ 1,899,966
Stock Issued During Period, Value, Sale Leaseback Transaction	$ 73,000
Sale Leaseback to MMP [Member]
Lessee, Operating Lease, Term of Contract	50 years
Lessee Leasing Arrangements, Operating Leases, Number of Renewal Periods	4
Lessee, Operating Lease, Renewal Term	10 years
Sale Leaseback Transaction, Monthly Rental Payments	$ 30,000
Sale Leaseback Transaction, Monthly Rental Payments, Per Square Foot | $ / item	0.38
Sale Leaseback Transaction, Monthly Rental Payments, Percentage of Gross Monthly Sales	1.50%
Sale Leaseback Transaction, Monthly Rental Payments, Adjustment Period	5 years
Sale Leaseback Transaction, Period Available to Obtain Capital Funding for Construction of the First Phase Building	180 days
Sale Leaseback Transaction, Additional Period Available to Obtain Capital Funding for Construction of the First Phase Building	180 days
Sale Leaseback Transaction, Period Unable to Obtain Capital Funding for Construction of the First Phase Building, After Which the Arrangement Will Terminate	1 year
Payments to Acquire Land	$ 925,000
Sale Leaseback Transaction, Discount to the Purchase Price, Monthly Reduction in Payments	$ 1,542
Stock Issued During Period, Shares, Sale Leaseback Transaction | shares	100,000
Common Stock, Par or Stated Value Per Share | $ / shares	$ 0.0001
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	3,640,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 1
Sale Leaseback to MMP [Member] | Warrant [Member]
Fair Value Assumptions, Risk Free Interest Rate	1.12%
Fair Value Assumptions, Expected Term	4 years
Fair Value Assumptions, Expected Volatility Rate	115.00%
Massachusetts Land Purchase [Member]
Area of Land | a	52.6
Land Purchase, Previous Payments Credited Against the Total Purchase Price	$ 925,000
Land, Purchase Price	4,475,000
Payments to Acquire Land Held-for-use	$ 3,550,000
Operating Leases, Rent Expense, Net				208,184	$ 0	307,036	$ 0
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year				142,290		142,290
Operating Leases, Future Minimum Payments, Due in Two Years				341,496		341,496
Operating Leases, Future Minimum Payments, Due Thereafter				15,367,520		15,367,520
Operating Leases, Future Minimum Payments, Due in Five Years				360,000		360,000
Operating Leases, Future Minimum Payments, Due in Three Years				360,000		360,000
Operating Leases, Future Minimum Payments, Due in Four Years				360,000		360,000
Coastal Compassion Inc. [Member]
Working Capital Advances		$ 2,500,000
Working Capital Advances, Term		5 years
Note Receivable, Interest Rate		18.00%
Officer Employment Agreement, Initial Term		3 years
Consulting Services Revenue Monthly		$ 10,000
Coastal Compassion Inc. [Member] | Construction and Working Capital Advances [Member]
Due from Related Parties				98,741		98,741
Coastal Compassion Inc. [Member] | Construction and Working Capital Advances Excluding Accrued Interest [Member]
Due from Related Parties				93,049		93,049
Coastal Compassion Inc. [Member] | Construction and Working Capital Advances Related Accrued Interest [Member]
Due from Related Parties				$ 5,692		$ 5,692

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Note 10 - Shareholders' Equity (Details Textual) - USD ($)	Nov. 07, 2016	Oct. 17, 2016	Mar. 31, 2017	Sep. 30, 2016
Equity Units, Value, Subscriptions	$ 2,000,000
Equity Units, Price Per Unit	$ 1
Equity Units, Number of Shares of Common Stock in Each Unit	1
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 3.66	$ 6.19
Equity Units, Subscribed But Unissued, Gross Proceeds Receivable	$ 2,000,000
Common Stock, Par or Stated Value Per Share			$ 0.0001	$ 0.0001
Sale Leaseback to MMP [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 1
Average Daily Volume Of Shares Trades		100,000
Common Stock, Par or Stated Value Per Share		$ 0.0001
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		3,640,000
Series I Warrants [Member]
Equity Units, Number of Warrants in Each Unit	1
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	1
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 3
Class of Warrant or Right, Fair Value of Warrant Issued, Percent	43.00%
Equity Units, Subscribed But Unissued, Potentially Receivable Additional Proceeds	$ 6,000,000

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Note 10 - Shareholders' Equity - Warrant Activity (Details) - $ / shares	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Outstanding, warrants (in shares)	4,341,000
Outstanding, warrants, weighted average exercise price (in dollars per share)	$ 6.19
Outstanding, warrants, weighted average remaining contract term (Year)	2 years 292 days	2 years 36 days
Granted, warrants (in shares)	5,640,000
Granted, warrants, weighted average exercise price (in dollars per share)	$ 1.71
Granted, warrants, weighted average remaining contract term (Year)	3 years 292 days
Outstanding, warrants (in shares)	9,981,000	4,341,000
Outstanding, warrants, weighted average exercise price (in dollars per share)	$ 3.66	$ 6.19
Vested and expected to vest (in shares)	9,981,000
Vested and expected to vest, weighted average exercise price (in dollars per share)	$ 3.66
Vested and expected to vest, weighted average remaining contract term (Year)	2 years 292 days
Exercisable, warrants (in shares)	9,981,000
Exercisable, warrants, weighted average exercise price (in dollars per share)	$ 3.66
Exercisable, warrants, weighted average remaining contract term (Year)	2 years 292 days

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Note 11 - Subsequent Events (Details Textual) - Arbatration Claim Against WPG [Member] - Subsequent Event [Member]	Apr. 07, 2017 USD ($)
Loss Contingency, Damages Sought, Value, Amounts Previously Advanced	$ 1,005,000
Loss Contingency, Damages Sought, Value, Consulting Fees	2,880,000
Loss Contingency, Damages Sought, Value, Lease Rent	$ 1,944,000
Loss Contingency, Damages Sought, Interest	25.00%