10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2020

☐ 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:  000-54231

AMERICANN, INC.

(Exact name of registrant as specified in its charter)

Delaware	27-4336843
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)

1555 Blake Street, Unit 502 Denver, CO 80202

(Address of Issuer's Principal Executive Offices, Zip Code)

Issuer’s telephone number, including area code:  (303) 862-9000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
N/A	N/A	N/A

Securities registered under Section 12(g) of the Exchange Act: Common Stock, ($0.001 Par Value)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  

Yes ☐     No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.   Yes ☐     No ☒

Indicate by check mark whether the registrant (1) has filed all reports 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 check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).   Yes ☒     No ☐

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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,  and will not be contained,  to the best of Registrant's  knowledge,  in definitive proxy or information  statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ☒

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	☑
		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).  Yes ☐     No ☒

The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of the registrant’s common stock on March 31, 2020, was approximately 7,281,000.

As of December 15, 2020, the registrant had 23,696,310 outstanding shares of common stock.

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PART I

Forward-Looking Statements

This report contains or incorporates by reference forward-looking statements, concerning our financial condition, results of operations and business.  These statements include, among others:

● statements concerning the benefits that we expect will result from the business activities that we contemplate; and

● statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts.

You can find many of these statements by looking for words such as “believes”, “expects”, “anticipates”, “estimates” or similar expressions used in this report.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied in those statements.  Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied.  We caution you not to put undue reliance on these statements, which speak only as of the date of this report.

ITEM 1. BUSINESS.

AmeriCann, Inc. (“AmeriCann”) is a specialized cannabis company that is developing state-of-the-art product manufacturing and greenhouse cultivation facilities. Our business plan is based on the continued growth of the regulated marijuana market in the United States.

AmeriCann uses greenhouse technology which is superior to the current industry standard of growing cannabis in warehouse facilities under artificial lights. According to industry experts, by capturing natural sunlight, greenhouses use 25 percent fewer lights, and utility bills are up to 75 percent less than in typical warehouse cultivation facilities. As such, AmeriCann’s Canopy System enables cannabis to be produced with a greatly reduced carbon footprint, making the final product less expensive. Additionally, greenhouse construction costs are nearly half of warehouse construction costs. AmeriCann’s business is committed to sustainable, clean cultivation of medical cannabis and to social and environmental ethics, transparency and accountability.

AmeriCann’s team includes board members, expert 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.

AmeriCann’s flagship project is the Massachusetts Cannabis Center. The Massachusetts Cannabis Center (“MCC”) is being developed on a 52-acre parcel located in Southeastern Massachusetts. AmeriCann’s MCC project is permitted for 987,000 sq. ft. of cannabis cultivation and processing infrastructure, which is being developed in phases to support both the existing medical cannabis and the newly emerging adult-use cannabis marketplace.

The first phase of the million square foot project, Building 1, a 30,000 square foot cultivation and processing facility, is fully-operational and is currently 100% leased by a vertically-integrated Massachusetts cannabis company.

See “Massachusetts Cannabis Center” below for more information.

Massachusetts Cannabis Center

On October 17, 2016, we closed on the acquisition of the 52.6-acre parcel of undeveloped land in Freetown, Massachusetts. The property is located approximately 47 miles southeast of Boston. We are developing the property as the Massachusetts Cannabis Center (“MCC”). 

As part of a simultaneous transaction, we assigned the property rights to Massachusetts Medical Properties, LLC (“MMP”) for a nominal fee and entered a lease agreement pursuant to which MMP agreed to lease the property to us 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 are 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.

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We received a 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 are reduced by $1,542 each month.

In connection with the sale of the property to MMP and the lease, we entered into a Share Purchase Agreement pursuant to which we issued to MMP 100,000 shares of our 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 before October 17, 2021. The warrant does not contain a cashless exercise provision.

Under the terms of the lease, the Company had six (6) months to obtain $2.6 million in capital funding for the construction of the first phase building. In the event that the Company was unable to raise these funds within the six (6) month period, the Company had an additional six (6) month period to do so; provided, that the Company paid accrued lease payments and closing costs. If the Company was then unable to raise these funds on or before twelve (12) months from October 17, 2016, the lease would terminate. On October 17, 2017, the lease agreement was amended to provide that the Company would have until 16 months from October 17, 2016 to raise $2.6 million in capital funding. In addition to extending the funding deadline, this amendment granted MMP warrants to purchase up to 100,000 shares of common stock at an exercise price of $1.50 per share. The warrants can be exercised at any time on or before October 17, 2022. In February and April, 2018, the lease agreement was amended to provide that the Company would have until 20 months from October 17, 2016 to raise $2.6 million in capital funding. In addition to extending the funding deadline, this amendment granted MMP warrants to purchase up to 100,000 shares of the Company’s common stock at an exercise price of $1.50 per share. The warrants can be exercised at any time on or before October 17, 2022. The Company recognized an expense of $0 during the three months ended December 31, 2018 related to those warrants. In July 2018, the Company fulfilled the $2.6 million capital funding commitment.

The MCC is a one million square foot sustainable greenhouse facility in Freetown, Mass which we are developing. Plans for the MCC include the construction of sustainable greenhouse cultivation and processing facilities that will be leased to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana and Adult Use Programs

The Town of Freetown Planning Board has approved our site plan application for the MCC. The site plan application requested 977,000 square feet of infrastructure for medical marijuana cultivation, processing, testing and associated administration in Freetown's Industrial Park. 

We are developing MCC in phases that will consist of three different building sites. The buildings have been approved for the following approximate sizes:

Building 1: 30,000 square feet

Building 2: 370,000 square feet

Building 3: 600,000 square feet.

Building 1 is a fully-constructed and operational, state-of-the-art greenhouse cultivation and product manufacturing facility.

On July 26, 2019 we entered into a Triple Net Lease for Building 1 with BASK, Inc. ("BASK"), a related party. Building 1, an Adult-Use and Medical cannabis cultivation and processing facility, is the first phase of the MCC. BASK commenced operations in Building 1 in February of 2020 and is licensed by the Massachusetts Cannabis Control Commission to cultivate, process and sell medical marijuana.

The 15-year lease for Building 1 with BASK provides, in addition to a monthly Base Rent, a Revenue Participation Fee to us of 15% of all gross monthly sales of cannabis, cannabis-infused products and non-cannabis products produced at Building 1.

Building 2 is the next phase of the MCC development where AmeriCann will occupy space for cannabis cultivation and product manufacturing. Designs for Building 2 include 370,000 square feet of greenhouses for cultivation and GMP certified product manufacturing and extraction capabilities.

On November 19, 2020, AmeriCann received two licenses from the Massachusetts Cannabis Control Commission. The licenses are for Cannabis Cultivation and a license for Cannabis Product Manufacturing. The Cannabis Cultivation and Cannabis Product Manufacturing licenses awarded to AmeriCann are designated to be operated in Building 2 of the MCC.

For the remainder of the project we intend to enter into agreements with other licensed cannabis businesses in Massachusetts to occupy space in the MCC. We will generate revenue through lease arrangements with the operators that include base rents and revenue participation fee payments up to 15% of gross revenue generated from products produced at the MCC. We plan to replicate the brands, technology and innovations developed at the MCC to new markets.

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Market Conditions

Adult-Use marijuana is now legal in 15 states and the District of Columbia, and medical marijuana is legal in 36 states.

While the industry is growing rapidly, the cannabis industry faces several major obstacles that challenge its growth and profitability. First, the cultivation of cannabis is a very capital-intensive enterprise. Many cannabis entrepreneurs do not have access to the capital required to build the infrastructure required to meet growing demand and sales projections. Traditional sources of financing, such as banks, are not available currently to cannabis producers and retailers in the United States. Second, there is a significant shortage of knowledge related to virtually all areas of the cannabis business. When new states are added to the list of regulated cannabis markets, there is a scarcity of experience and expertise to serve the needs of cultivators, processors and retailers in these states. As explained below, marijuana is illegal under federal law. These obstacles to the cannabis industry require financial resources, expertise and dedicated advocacy to change regulations on the state level.

Government Regulation

Marijuana is a Schedule-I controlled substance and is illegal under federal law.  Even in those states in which the use of marijuana has been legalized, its use remains a violation of federal law.

A Schedule I controlled substance is defined as a substance that has no currently accepted medical use in the United States, a lack of safety for use under medical supervision and a high potential for abuse.  The Department of Justice defines Schedule 1 controlled substances as “the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence.”  If the federal government decides to enforce the Controlled Substances Act with respect to marijuana, persons that are charged with distributing, possessing with intent to distribute, or growing marijuana could be subject to fines and terms of imprisonment, the maximum being life imprisonment and a $50 million fine.

As of November 30, 2020, 36 states and the District of Columbia allow their citizens to use Medical Marijuana. Additionally, 15 states and the District of Columbia have legalized cannabis for recreational use by adults. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. Although previous administrations have indicated that they are not opposed to the legalization of marijuana any change in the federal government’s enforcement of current federal laws could cause significant financial damage to us and our shareholders.

Competition

Currently, there are a number of other companies that are involved in the marijuana industry, many of which we consider to be our competition. Many of these companies provide services similar to those which we provide or plan to provide.  We expect that other companies will recognize the value of serving the marijuana industry and become our competitors.

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General

We were incorporated in Delaware on June 25, 2010.

Our offices are located at 1555 Blake Street, Unit 502, Denver, CO 80202. We lease this space on a month-to-month basis at a rate of $2,500 per month.

As of November 30, 2020, we had three full time employees, that being Timothy Keogh, our Chief Executive Officer, Benjamin Barton, Chief Financial Officer and Jane Roach, our Office Manager.  As of November 30, 2020, Mr. Keogh was spending approximately 90% of his time on our business, Mr. Barton was spending approximately 95% of his time on our business, and Jane Roach was spending approximately 100% of her time on our business. 

COVID-19 Pandemic

The Company believes that the COVID- 19 pandemic has had certain impacts on its business, but management does not believe there has been a material long-term impact from the effects of the pandemic on the Company’s business and operations, results of operations, financial condition, cash flows, liquidity or capital and financial resources.

The Company has established policies to monitor the pandemic and has taken a number of actions to protect its employees, including restricting travel, encouraging quarantine and isolation when warranted, and directing employees to work from home.

In an effort to mitigate the COVID- 19 pandemic Massachusetts implemented a “Stay at Home Advisory.” The advisory commenced March 24, 2020 and concluded May 25, 2020. Massachusetts Governor Baker deemed medical cannabis businesses as an essential service and, therefore, Building 1 has continued to operate in a standard manner without interruption, while management implemented guidelines from the CDC and Massachusetts. Adult use recreational sales of cannabis are once again legal in Massachusetts.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. However, our activities are subject to significant risks and uncertainties including failure to secure funding to properly fund our business plan. 

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES.

See Item 1. Business.

ITEM 3. LEGAL PROCEEDINGS.

None

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is quoted on the OTCQB under the trading symbol “ACAN”. Shown below is the range of high and low closing prices for our common stock as reported by the OTCQB for the periods presented:

Quarter Ended	High		Low
December 31, 2018	$	3.25	$	1.75
March 31, 2019	$	2.07	$	1.80
June 30, 2019	$	1.85	$	1.09
September 30, 2019	$	1.26	$	0.93
December 31, 2019	$	0.61	$	0.90
March 31, 2020	$	0.44	$	0.80
June 30, 2020	$	0.46	$	0.69
September 30, 2020	$	0.43	$	0.60

Holders of our common stock are entitled to receive dividends as may be declared by the Board of Directors.  Our Board of Directors is not restricted from paying any dividends but is not obligated to declare a dividend.  No cash dividends have ever been declared and it is not anticipated that cash dividends will ever be paid.  We currently intend to retain any future earnings to finance future growth.  Any future determination to pay dividends will be at the discretion of our directors and will depend on our financial condition, results of operations, capital requirements and other factors the board of directors considers relevant.

Our Articles of Incorporation authorize the Board of Directors to issue up to 20,000,000 shares of preferred stock.  The provisions in the Articles of Incorporation relating to the preferred stock allow our directors to issue preferred stock with multiple votes per share and dividend rights, which would have priority over any dividends paid to the holders of our common stock.  The issuance of preferred stock with these rights may make the removal of management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if these transactions are not favored by management.

As of December 15, 2020, we had 139 shareholders of record and 23,696,310 outstanding shares of common stock.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Total Revenues

During the year ended September 30, 2020, we generated $503,512 in revenue, as compared to $11,564 for the year ended September 30, 2019. The increase in revenue is due to the rental revenue and participation fee revenue due to completion of Building 1.

Advertising and Marketing Expenses

Advertising and marketing expenses were $38,179 for the year ended September 30, 2020, as compared to $126,993 for the year ended September 30, 2019. The decrease is due to a decrease in public relations costs.

Professional Fees

Professional fees were $405,920 for the year ended September 30, 2020, as compared to $866,116 for the year ended September 30, 2019. The decrease in professional fees is primarily due a decrease in legal and consulting fees.

General and Administrative Expenses

General and administrative expenses were $2,007,642 for the year ended September 30, 2020, as compared to 1,626,596 for the year ended September 30, 2019.  The increase is primarily a result of an increase in depreciation expense and property tax expense.

Provisions for Doubtful Accounts/Recovery of Provision for Doubtful Accounts

(Recovery)/Provision for doubtful accounts was $(1,761,675) for the year ended September 30, 2020, as compared to $783,905 for the year ended September 30, 2019. The decrease is a result of a reversal of the reserve on the receivable balance with WGP, as the payment was received in February 2020.

Interest Income

Interest income was $333,681 for the year ended September 30, 2020, as compared to $29,109 for the year ended September 30, 2019. The increase is attributable primarily due to the interest on the WGP litigation settlement.

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Interest Expense

Interest expense was $856,470 for the year ended September 30, 2020, as compared to $560,591 for the year ended September 30, 2019. The increase is primarily attributable to interest on the $4,000,000 loan and the amortization of debt discounts.

Loss on extinguishment of debt

On September 30, 2019, we recognized loss on extinguishment of debt of $977,110 representing the fair value of 1,500,000 warrants issued as part of the loan amendment and modification.

Net Loss

We had a net loss of $709,343 for the year ended September 30, 2020, as compared to a net loss of $4,903,668 for the year ended September 30, 2019. The decrease 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

Loans

In August 2020, we borrowed $153,000 from an unrelated party, inclusive of $3,000 of debt issuance costs. The loan bears an interest rate of 10% per year and is due on August 21, 2021.

On September 30, 2019, we amended and modified two notes payable due to Strategic Capital Partners, LLC, a company controlled by Benjamin J. Barton, one of our officers and directors with balances of $1,000,000 and $756,646 into one note, in the principal amount of $1,756,646, bearing interest of 9% per year and maturing on December 31, 2022. Additionally, the conversion option in the first note was eliminated. As additional consideration for the modification of the notes, the note holder received warrants to purchase 1,500,000 shares of the Company's common stock. The warrants are exercisable at a price of $1.25 per share and expire on December 31, 2022. The fair value of the 1,500,000 warrants was $977,110 and was recognized as loss on extinguishment of debt.

On August 2, 2019 we secured a $4,000,000 loan from an unrelated third party. The loan was evidenced by a note which bears interest at the rate of 11% per year, is due and payable on August 2, 2022 and is secured by a first lien on Building 1 at the MCC.

The note holder also received a warrant which allows the holder to purchase 600,000 shares of the Company’s common stock at a price of $1.50 per share. The warrant will expire on the earlier of (i) August 2, 2024 or (ii) twenty days after written notice of the holder that the daily Volume Weighted Average Price of the Company’s common stock was at least $4.00 for twenty consecutive trading days and the average daily volume of trades of the Company’s common stock during the twenty trading days was at least 150,000 shares.

In May 2019, we borrowed a total of $236,000 from an unrelated party. The loan bore an interest rate of 12% per year and was due one year from the borrowing date. The loan was repaid during 2019 prior to the due date. The Company incurred debt issuance costs of $6,000 related to these loans.

Sale of Common Stock and Warrants

Currently the company has 7,490,650 warrants issued and outstanding with exercise prices ranging from $1.00 to $5.00 and expiration dates ranging from November 4, 2020 to July 10, 2023 associated with transactions prior to October 1, 2018.

During the year ended September 30, 2020, we issued 191,490 shares of stock for services valued $90,000.

During the year ended September 30, 2019, we converted debt and interest of $261,513 into 174,342 shares of common stock.

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Equity line agreement

On December 12, 2017, we entered into an amended and restated equity line agreement with Mountain States Capital, LLC (MSC). Under the equity line agreement, MSC agreed to provide us with up to $10,000,000 of funding through the purchase of shares of the Company's common stock.

The equity line agreement terminated in August 2019.

During the year ended September 30, 2019, we received $1,211,000 from the sale of 715,981 shares of common stock to MSC.

Contractual obligations

The Company leases land under an operating lease commencing October 17, 2016, 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 are 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 Company received a 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 are reduced by $1,542 each month. 

Analysis of Cash Flows

During the year ended September 30, 2020, cash provided by operations was $518,333 as compared to net cash used in operations of $2,188,594 for the year ended September 30, 2019. The increase is primarily due to the collection of an arbitration award, timing of working capital payments and depreciation (a non-cash) expense during the year ended September 30, 2020.

Cash flows used in investing activities were $357,236 for the year ended September 30, 2020, consisting primarily of additions to property, plant and equipment. Cash flows used in investing activities was $5,861,793 for the year ended September 30, 2019, consisting primarily of additions to construction in progress.

Cash flows used in financing activities were $1,260,000 for the year ended September 30, 2020, consisting primarily of payments on notes payable. Cash flows provided by financing activities was $5,325,500 for the year ended September 30, 2019, consisting primarily of net proceeds from note payable, the exercise of warrants and stock options and proceeds from common stock issued for cash, partially offset by payments on notes payable.

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Going concern

The accompanying consolidated 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 a working capital deficit of $232,158 as of September 30, 2020, an accumulated deficit of $18,722,552 and $18,013,209 at September 30, 2020 and 2019, respectively, and had a net loss of $709,343 for the year ended September 30, 2020.

Management believes that the actions presently being taken to further implement the Company’s 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 consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Trends

The factors that will most significantly affect our future operating results, liquidity and capital resources will be:

● Government regulation of the marijuana industry;

● Revision of Federal banking regulations for the marijuana industry; and

● Legalization of the use of marijuana for medical or recreational use in other states.

Other than the foregoing, we do not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on:

● revenues or expenses;

● any material increase or decrease in liquidity; or

● expected sources and uses of cash.

RECENT ACCOUNTING PRONOUNCEMENTS

Recent accounting pronouncements which may be applicable to us are described in Note 1 to the Consolidated Financial Statements included as part of this report.

SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are set forth below. We have consistently applied these policies in all material respects.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant estimates and assumptions made by management are valuation of equity instruments, deferred tax asset valuation and allowance and collectability of long-lived assets. Actual results could differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.  

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposit accounts and temporary cash investments with maturities of ninety days or less at the date of purchase.

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Income Taxes

In accordance with ASC Topic 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the consolidated balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the consolidated financial statements.  The resulting deferred tax assets or liabilities have been adjusted to reflect changes in tax laws as they occur.  A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.

We expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-not" threshold, the amount to be recognized in the consolidated financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of September 30, 2020 and 2019, we had no uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We currently have no federal or state tax examinations nor have we had any federal or state examinations since our inception. To date, we have not incurred any interest or tax penalties.

For federal tax purposes, our 2017 through 2019 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations.

Concentration of Credit Risks and Significant Customers

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, notes receivables, deposits, and tenant receivables. We place our cash with high credit quality financial institutions. As of September 30, 2020, we had outstanding notes receivable of $119,512 and a tenant receivable of $124,617 with, a related party.

Financial Instruments and Fair Value of Financial Instruments

We adopted ASC Topic 820, Fair Value Measurements, for assets and liabilities measured at fair value on a recurring basis. ASC Topic 820 requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. 

ASC Topic 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. We had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. We had no financial assets or liabilities carried and measured on a recurring basis during the reporting periods. The carrying value of short-term financial instruments, including cash, tenant and notes receivable, accounts payable and accrued expenses, and short-term borrowings approximate fair value due to the relatively short period to maturity for these instruments. The long-term borrowings approximate fair value since the related rates of interest approximates current market rates.

Derivative Liabilities

We evaluate stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each consolidated balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date. We determined that none of our financial instruments meet the criteria for derivative accounting as of September 30, 2020 and 2019.

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Operating leases

Effective October 1, 2019, we adopted ASC 842 Lease Accounting using the effective date method. Under the method, periods prior to adoption remain unchanged. We determine if an arrangement is a lease at inception. 

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less).

Long-lived assets

Our long-lived assets consist of property and equipment and are reviewed for impairment in accordance with the guidance of the Topic ASC Topic 360, Property, Plant, and Equipment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. There were no impairment losses recognized for the years ended September 30, 2020 and 2019.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment begins in the month following the month when the asset is placed into service and is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from three to twenty years.

Non-Cash Equity Transactions

Shares of equity instruments issued for noncash consideration are recorded at the estimated fair market value of the consideration granted based on the estimated fair market value of the equity instrument, or at the estimated fair market value of the goods or services received, whichever is more readily determinable.

Stock-Based Compensation

We account for share-based awards to employees in accordance with ASC Topic 718, Stock Compensation. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Share-based awards to non-employees are accounted for in accordance with ASU 2018-07 Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting, which aligns the accounting for nonemployee share-based payments with accounting of share-based payments to employees,

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Related Parties

A party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.

Revenue Recognition

Effective October 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the new standard, we recognize revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists, (ii) identifiable performance obligations under the contract exist, (iii) the transaction price is determinable for each performance obligation, (iv) the transaction price is allocated to each performance obligation, and (v) when the performance obligations are satisfied. Currently, we derive all of our revenues from property leases. Property leases are not within the scope of ASC 606.

Property lease revenue is earned through annual leases for facilities used in agricultural/manufacturing activities and the Company records revenues on a straight-line basis over the term of these leases.  Property lease revenues from these sources are recurring on an annual basis.  Unearned property lease revenues were $0 at both September 30, 2020 and 2019.

The Company also receives a revenue participation fee which is considered a variable payment and thus is recorded in the period earned in accordance with ASC 842.

Advertising Expense

Advertising, promotional and selling expenses consist of sales and marketing expenses, and promotional activity expenses. Expenses are recognized when incurred.

General and Administrative Expense

General and administrative expenses consist of professional service fees, rent and utility expenses, meals, travel and entertainment expenses, and other general and administrative overhead costs. Expenses are recognized when incurred.

Loss per Share

We compute net loss per share in accordance with the ASC Topic 260. The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.

Basic loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Shares issuable upon the exercise of equity instruments such as warrants and options were not included in the loss per share calculations for 2020 and 2019 because the inclusion would have been anti-dilutive.

OFF-BALANCE SHEET ARRANGEMENTS

As of September 30, 2020, we did not have any off-consolidated balance sheet arrangements.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Attached.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-K.  Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.  Based on that evaluation, our management concluded that, as of September 30, 2020, our disclosure controls and procedures were not effective for the same reasons that our internal control over financial reporting was not adequate.

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Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as required by Sarbanes-Oxley (SOX) Section 404.A. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with generally accepted accounting principles in the United States and includes those policies and procedures that:

(1)	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets;
(2)	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors; and
(3)	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer's assets that could have a material effect on the issuer’s financial statements.

We carried out an evaluation under the supervision and with the participation of management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our internal control over financial reporting as of September 30, 2020, the end of the period covered by this Annual Report on Form 10-K for the year ended September 30, 2020. In making this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework, published in 2013. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our internal control over financial reporting was not effective as of September 30, 2020 at the reasonable assurance level, as a result of material weaknesses 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, limited or no segregation of duties, and lack of independent directors. As a result, we did not adequately document or test whether our financial activity level controls or our information technology general controls were operating sufficiently to identify a deficiency, or combination of deficiencies, that may result in a reasonable possibility that a material misstatement of the consolidated financial statements would not be prevented or detected on a timely basis. In addition, we did not properly evaluate the accounting and valuation for certain equity instruments. While Management has reviewed the consolidated financial statements and underlying information included in this Annual Report on Form 10-K in detail and believes the procedures performed are adequate to fairly present our financial position, results of operations and cash flows for the periods presented in all material respects, the material weaknesses that existed in fiscal 2020 could have led to an error in the original accounting of the estimated fair market value of certain equity instruments.

Remediation of Material Weaknesses 

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 2201), or combination of control deficiencies, that result in more than a remote likelihood that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected. While management believes that the Company’s consolidated financial statements previously filed in the Company’s SEC reports have been properly recorded and disclosed in accordance with US GAAP, we have designed and plan to implement, or in some cases have already implemented, the specific remediation initiatives described below:

We plan to obtain and hire additional accounting personnel, and continue to enhance our internal finance and accounting organizational structure. 

We have hired a third-party consultant who has the required background and experience in accounting principles generally accepted in the United States of America and with SEC rules and regulations.

We are in the process of further enhancing the supervisory procedures to include additional levels of analysis and quality control reviews within the accounting and financial reporting functions.

We are in the process of strengthening our internal policies and enhancing our processes for ensuring consistent validation of our conclusions regarding significant accounting policies and their application to our business transactions are carried out by personnel with an appropriate level of accounting knowledge, experience and training.

While we have not yet remediated these material weaknesses, we will continue our remediation efforts during fiscal 2021.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to such attestation pursuant to rules of the Securities and Exchange Commission that permits us to provide only management’s report in this Annual Report.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting have come to management's attention during our last fiscal quarter that have materially affected, or are likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION.

None. 

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Name	Age	Position
Timothy Keogh	41	Chief Executive Officer and a Director
Benjamin J. Barton	56	Chief Financial and Accounting Officer and a Director
J. Tyler Opel	32	Director

The following is a brief summary of the background of each officer and director including their principal occupations during the past several years.  All directors will serve until their successors are elected and qualified or until they are removed.

Timothy Keogh was appointed our Chief Executive Officer and a director on March 25, 2014. As our Chief Executive Officer, Mr. Keogh has developed sustainable practices and traditional horticultural approaches to the production of medical cannabis to benefit patients and adults (21+) in regulated markets. Prior to joining AmeriCann, Mr. Keogh was the Chief Executive Office and a director of Bask, Inc (f/k/a Coastal Compassion, Inc.), a non-profit corporation that has entered the medical marijuana business in Massachusetts. BASKS’s efforts began in September of 2012 and was formalized under Massachusetts G.L. Chapter 180 in August of 2013.  Under the direction of Mr. Keogh, Bask, Inc. received a limited number Final Certificates for cultivation, processing and dispensing medical cannabis in Massachusetts.

Between November 2010 and November 2013 Mr. Keogh owned and managed Dock Promotions, LLC, a company which provided consulting services to waterfront developments and marinas in the areas of design, construction, and operations.   Between 2003 and 2010, Mr. Keogh was the Director of Business Services for Marina Management Services, Inc., a corporation which provided management and consulting solutions to waterfront developments, marinas and boatyards throughout the Americas and the Caribbean. 

Mr. Keogh was recognized by Marijuana Business Daily as one of the top entrepreneurs in the cannabis industry, is a board member of the Responsible Regulation Alliance in Massachusetts, and continues to be an invited speaker at investment and cannabis industry event throughout the United States.  Mr. Keogh holds a Bachelor of Science in Business Administration from Mount St. Mary’s College.

Ben Barton was appointed a director on January 14, 2014 and Chief Financial Officer on January 22, 2014. Since 1986, Mr. Barton has been active in all aspects of venture capital and public stock offerings. Since 2005, Mr. Barton has been the Managing Director of Strategic Capital Partners, LLC, a private investment company specializing in emerging companies. Mr. Barton was one of the founders of Synergy Resources Corporation, an energy company that traded on the NYSE. Prior to earning an MBA in Finance from UCLA, Mr. Barton received his Bachelor of Science degree in Political Science from Arizona State University.

J. Tyler Opel was appointed to the Board of Directors of AmeriCann, Inc. in January of 2019. Prior to joining AmeriCann, Mr. Opel received his business administration degree from the University of Missouri. After working as a financial analyst in the bulk commodity industry, Mr. Opel received his Juris Doctorate from the Southern Illinois School of Law with a specialization in Business and Transactional Law. Mr. Opel is licensed to practice law in Colorado and Missouri and has represented clients in various real estate, construction, administrative, and transactional proceedings.

Effective March 25, 2014, we entered into an employment agreement with Mr. Keogh.  The agreement had an initial term of three years and provided that we would pay Mr. Keogh $12,000 per month during the term of the agreement.  Pursuant to the employment agreement, Strategic Capital Partners, LLC, our largest shareholder, sold 1,200,000 shares of our common stock to Mr. Keogh at a price of $0.001 per share.

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See Item 12 of this report for information concerning options granted to Mr. Keogh.

Our directors serve until the next annual meeting of our shareholders and until their successors have been duly elected and qualified.  Our officers serve at the discretion of our directors.  

We believe our directors are qualified to act as such for the following reasons:

Timothy Keogh – experience in marijuana industry

Benjamin J. Barton – experience in the capital markets

J. Tyler Opel – experience in business and transaction law

Timothy Keogh and Benjamin J. Barton are not independent as that term is defined in Section 803 of the NYSE American Company Guide.

We do not have a financial expert as that term is defined by the Securities and Exchange Commission.

Our Board of Directors does not have standing audit, nominating or compensation committees, committees performing similar functions, or charters for such committees. Instead, the functions that might be delegated to such committees are carried out by our Board of Directors, to the extent required. Our Board of Directors believes that the cost of associated with such committees has not been justified under our current circumstances.

Our Board of Directors believes that its current members have sufficient knowledge and experience to fulfill the duties and obligations of an audit committee. None of the current Board members is an “audit committee financial expert” within the meaning of the rules and regulations of the Securities and Exchange Commission. The Board has determined that each of its members is able to read and understand fundamental consolidated financial statements and has substantial business experience that results in that member’s financial sophistication.

Our Board of Directors does not have a “leadership structure” since each board member is free to introduce any resolution at any meeting of our directors and is entitled to one vote at any meeting.

Holders of our common stock may send written communications to our entire board of directors, or to one or more board members, by addressing the communication to “the Board of Directors” or to one or more directors, specifying the director or directors by name, and sending the communication to our offices in Denver, Colorado.  Communications addressed to the Board of Directors as whole will be delivered to each board member.  Communications addressed to a specific director (or directors) will be delivered to the director (or directors) specified.

Security holder communications not sent to the Board of Directors as a whole or to specified board members will be relayed to board members.

The Company’s directors received the following compensation during the years ended September 30, 2020 and September 30, 2019:

	Name	Paid in Cash		Stock Awards (1)		All Other Compensation		Options Awards (2)
2020
	Timothy Keogh	$	-	$	30,000	$	-	$	150,885
	Benjamin J. Barton	$	-	$	30,000	$	-	$	150,885
	J. Tyler Opel	$	-	$	30,000	$	-	$	-
2019
	Timothy Keogh	$	-	$	30,000	$	-	$	244,397
	Benjamin J. Barton	$	-	$	30,000	$	-	$	244,397
	J. Tyler Opel	$	-	$	30,000	$	-	$	-

(1) The fair value of stock issued for services computed on the date of grant.

(2) The fair value of options granted computed on the date of grant.

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ITEM 11. EXECUTIVE COMPENSATION.

During the years ended September 30, 2020 and 2019 the following amounts were earned by our officers:

Name	Year	Salary		Bonus		Stock Awards (1)		All Other Compensation (2)		Options Awards (3)		Total
Timothy Keogh	2020	$	180,000	$	-	$	30,000	$	-	$	150,885	$	360,885
Chief Executive Officer	2019	$	180,000	$	-	$	30,000	$	-	$	244,397	$	454,397
Benjamin J. Barton	2020	$	-	$	-	$	30,000	$	180,000	$	150,885	$	360,885
Chief Financial Officer	2019	$	-	$	-	$	30,000	$	135,000	$	244,397	$	409,397

(1)	The value of all stock awarded during the periods covered by the table calculated according to ASC 718-10-30-3, which represented the grant date fair value.
(2)	Consulting fees paid to Strategic Capital Partners, LLC., an entity controlled by Mr. Barton.
(3)	The fair value of all stock options granted during the periods covered by the table calculated on the grant date in accordance with ASC 718-10-30-3, which represented the grant date fair value.  Amount of stock option awards granted in 2019 represents the value of options to purchase 300,000 shares of our Common Stock at a price of $1.50 per share. The amount of stock options awards granted in 2020, represents the value of options to purchase 250,000 shares of our Common Stock at a price of $1.50 per share and an additional 250,000 shares of our Common Stock at a price of $3.00 per share. All options have a five year term.

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The following shows the amounts we expect to pay to our officers during the year ended September 30, 2020 and the amount of time these persons expect to devote to our business.

Name	Projected Compensation			Percentage of time to be devoted to the Company's business
Timothy Keogh	$	180,000			90	%
Benjamin J. Barton	$	180,000	(1)		95	%

(1) represents amounts to be paid to Strategic Capital Partners, LLC, as consulting fees

Our executive officers are compensated through the following three components:

● base salary;

● long-term incentives (stock options and/or grants of stock); and

● benefits.

These components provide a balanced mix of base compensation and compensation that is contingent upon the executive officer’s individual performance. A goal of the compensation program is to provide executive officers with a reasonable level of security through base salary and benefits. We want to ensure that our compensation program is appropriately designed to encourage executive officer retention and motivation to create shareholder value. Salaries generally have been targeted to be competitive when compared to the salary levels of persons holding similar positions in other publicly traded companies of comparable size. The executive officer’s responsibilities, experience, expertise and individual performance are also considered.

The Company has a Stock Incentive Plan (“the plan”) that provides for the grant of Incentive Stock Options, Non-Qualified Stock Options or Stock Bonuses to persons who are employees of the Company, employees of subsidiaries of the Company, directors, officers, and consultants. Under the plan, the Company may grant up to 2,500,000 options, each to purchase one share of common stock, subject to an exercise price and vesting schedule to be established by the board of directors at the time of the grant.

The Plan is administered by our Board of Directors which has the authority to determine the number of shares to be issued as a stock bonus, and the number of shares issuable upon the exercise of options, the exercise price and expiration date of options, and when, and upon what conditions options granted under the Plan will vest or otherwise be subject to forfeiture and cancellation.

The following table shows information concerning the options granted to the Company’s officers or directors during the fiscal year ended September 30, 2020:

Name	Shares Issuable Upon Exercise of Options		Exercise Price		Expiration Date
Timothy Keogh		250,000	$	1.50	9/30/2025
Timothy Keogh		250,000	$	3.00	9/30/2025
Benjamin J. Barton		250,000	$	1.50	9/30/2025
Benjamin J. Barton		250,000	$	3.00	9/30/2025

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The following table shows the weighted average exercise price of the outstanding options granted pursuant to the Company’s Stock Incentive Plan as of September 30, 2020, the Company’s recently completed fiscal year:

Plan	Total Shares Reserved Under the Plan		Number of Securities to be Issued Upon Exercise of Outstanding Options		Weighted- Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuances Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
			(a)		(b)		(c)
Stock Incentive Plan		2,500,000		1,850,000		1.99		650,000

The Company’s Stock Incentive Plan has not been approved by the Company’s shareholders.

The following shows certain information as of December 15, 2020 concerning the stock options and stock bonuses granted pursuant to the Stock Incentive Plan. Each option represents the right to purchase one share of our common stock.

Total Shares Reserved Under the Plan	Shares Reserved for Outstanding Options		Shares Issued As Stock Bonus		Remaining Options/Shares Under the Plan
2,500,000		1,850,000		-		650,000

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table shows the ownership, as of December 15, 2020, of those persons owning beneficially 5% or more of our common stock and the number and percentage of outstanding shares owned by each of our directors and officers and by all officers and directors as a group.  Each owner has sole voting and investment power over their shares of common stock.

Name	Shares Owned (2)		Percentage of Outstanding shares
Timothy Keogh		1,300,408		5.5	%
Benjamin J. Barton		95,408		0.4	%
J. Tyler Opel		95,408		0.4	%
Strategic Capital Partners, LLC (1)		8,966,665		37.8	%
All officers and directors as a group (three persons)		10,457,889		44.10	%

(1)	Strategic Capital Partners, LLC, is controlled by Mr. Barton.
(2)	Does not include shares issuable upon the exercise of the warrants and options listed below, all of which were exercisable as of December 15, 2020.

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Name	Date of Issuance	Shares upon exercise of warrants or options		Exercise Price		Expiration Date
Strategic Capital Partners, LLC (1)	9/30/2019		1,500,000	$	1.25	12/31/2022
Timothy Keogh	9/30/2019		300,000	$	1.50	8/2/2024
	9/30/2020		250,000	$	1.50	9/30/2025
	9/30/2020		250,000	$	3.00	9/30/2025
Ben Barton	9/30/2019		300,000	$	1.50	8/2/2024
	9/30/2020		250,000	$	1.50	9/30/2025
	9/30/2020		250,000	$	3.00	9/30/2025

⁽¹⁾ Strategic Capital Partners, LLC, is controlled by Mr. Barton.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On September 30, 2019, we amended and modified two notes payable due to Strategic Capital Partners, LLC a company controlled by Benjamin J. Barton, one of our officers and directors with balances of $1,000,000 and $756,646, into one note, in the principal amount of $1,756,646, bearing interest of 9% per year and maturing on December 31, 2022.  Additionally, the conversion option in the first note was eliminated.  As additional consideration for the modification of the notes we issued SCP warrants to purchase 1,500,000 shares of our common stock.  The warrants are exercisable at a price of $1.25 per share at any time on or before December 31, 2022.

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On April 7, 2016, we signed agreements with BASK (formerly Coastal Companion, Inc). BASK is one of a limited number of organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Cannabis Control Commission.

Pursuant to the agreements, we provided BASK with financing for construction and working capital required for BASK’s approved dispensary and cultivation center in Fairhaven, MA.

On August 15, 2018, the Company combined the construction and working capital advances of $129,634 and accrued interest of $44,517 into a new loan with payments over 5 years with 18% interest. As of September 30, 2020, the outstanding loan balance was $119,512.

BASK has entered into a 15-Year NNN lease of Building 1 of the MCC. The lease commenced on September 1, 2019 and includes a base rent and a revenue participation fee. As of September 30, 2020, the BASK tenant receivable balance was $124,617.

Tim Keogh, our Chief Executive Officer, is a Board Member of BASK.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

For the years ended September 30, 2020 and 2019, MaloneBailey, LLP served as our independent registered public accounting firm.

The following table sets forth the aggregate fees paid or accrued for professional services rendered by our independent accountants for the audit of our annual consolidated financial statements for the years ended September 30, 2020 and 2019, and the aggregate fees paid or accrued for audit-related services and all other services rendered by our independent accountants for those years. 

	Year Ended September 30,
	2020		2019
Audit fees	$	53,500	$	79,000
Tax fees		-		-
Other		-		-
Total	$	53,500	$	79,000

The category of “Audit fees” includes fees for our annual audit, quarterly reviews of our 10-Q reports, and services rendered in connection with statutory or regulatory filings with the SEC. “Tax fees” include fees incurred in the review and preparation of our annual income tax filings.

Our Board of Directors, which serves as our audit committee, pre-approves the scope and estimated costs of all services rendered by our Principal Accountants.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets	F-2
Consolidated Statements of Operations	F-3
Consolidated Statement of Changes in Stockholders' Equity	F-4
Consolidated Statements of Cash Flows	F-5
Notes to the Consolidated Financial Statements	F-6

Item 16. Exhibits and Financial Statement Schedules

The following exhibits are filed with this Report:

3.1.1	Certificate of Incorporation (1)
3.1.2	Certificate of Ownership and Merger (name change to AmeriCann) (2)
3.2	Bylaws (2)
4.1	Form of Series I Warrant (2)
4.2	Form of Series II Warrant (2)
4.3	Form of Series III Warrant (2)
4.4	Form of Series IV Warrant. See Exhibit 10.4
4.5	Form of Series V Warrant (2)
4.6	Form of Series VI Warrant (2)
4.7	Form of Series VII Warrant (2)
4.8	Form of Series VIII Warrant (3)
4.9	Form of Series IX Warrant (4)
4.10	Form of Series X Warrant (4)
4.11	Form of Series XI Warrant (5)
4.12	Form of Series XII Warrant (5)
10.1	Agreements with Wellness Group Pharms (2)
10.2	Loan Modification Agreement with Strategic Capital Partners, LLC, together with Warrants and Promissory Notes (2)
10.3	Agreements with Coastal Compassion, Inc. (2)
10.4	Share Purchase Agreement with Massachusetts Medical Properties, LLC, together with Warrant (Series IV) and Ground Lease (2)
10.5	Investment Agreement with Mountain States Capital, LLC (2)
10.6	First Amendment to Ground Lease (2)
10.7	Loan Agreement, including form of warrant (Series CL) ($800,000) (2)
10.8	Loan Agreement ($128,000) (2)
10.9	Loan Agreement ($68,000) (2)
10.10	Form of Convertible Note (December 2017 financing) (2)
10.11	Form of Convertible Note (February 2018 financing) (3)
10.12	Second Amendment to Ground Lease (3)
10.13	Third Amendment to Ground Lease (3)
10.14	Promissory Note (5)
10.15	Mortgage and Security Agreement (5)
31.1	Rule 13a-14(a) Certifications
31.2	Rule 13a-14(a) Certifications
32	Section 1350 Certifications

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.

(1) Incorporated by reference to Exhibit 3.1 filed with the Company’s Registration Statement on Form 10.

(2) Incorporated by reference to same exhibit filed with Amendment No. 1 to the Company’s Registration Statement on Form S-1 (File #333-222207).

(3) Incorporated by reference to same exhibit filed with the Company’s Registration Statement on Form S-1 (File #333-224256).

(4) Incorporated by reference to the same exhibit filed with the Company’s Registration Statement on Form S-1 (File #333-227388).

(5) Incorporated by reference to the same exhibit filed with the Company’s Registration Statement on Form S-1 (File # 333-233981).

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

AmeriCann, Inc.

Denver, CO

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of AmeriCann, Inc and its subsidiaries (collectively, the “Company”) as of September 30, 2020 and 2019, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2020 and 2019, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ MaloneBailey, LLP

www.malonebailey.com

We have served as the Company's auditor since 2016.

Houston, Texas

December 21, 2020

F-1

AMERICANN, INC.

CONSOLIDATED BALANCE SHEETS

	September 30, 2020			September 30, 2019
Assets
Current Assets:
Cash and cash equivalents	$	183,009		$	455,843
Restricted cash		10,150			836,219
Tenant receivable – related party		124,617			11,564
Current portion of prepaid land lease		-			57,959
Prepaid expenses and other current assets		2,500			13,632
Current portion of note receivable - related party		37,165			32,270
Total current assets		357,441			1,407,487
Property, Plant and Equipment, net		7,512,421			7,572,788
Operating lease - right-of-use asset		6,914,080			-
Notes and other receivables (net of allowance of $1,761,675 as of September 30, 2019)		-			-
Note receivable - related party		82,347			116,493
Prepaid land lease and related deposits, net of current portion		-			2,666,129
Security deposit and other assets		-			3,110
Total assets	$	14,866,289		$	11,766,007
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	276,155		$	265,276
Accounts payable - related party		65,000			-
Interest payable (including $26,246 and $12,283 to related parties)		72,895			121,883
Other payables		20,571			9,129
Operating lease liability, short term		4,728			-
Notes payable		150,250			385,000
Total current liabilities		589,599			781,288
Notes payable (net of unamortized discounts of $571,483 and $882,603)		3,578,517			3,117,397
Notes payable - related party		581,646			1,756,646
Operating lease liability, long term		4,243,224			-
Total liabilities		8,992,986			5,655,331
Commitments and contingencies - see Note 10
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; 23,696,310 and 23,504,820 shares issued and outstanding as of September 30, 2020 and 2019, respectively		2,370			2,351
Additional paid in capital		24,593,485			24,121,534
Accumulated deficit		(18,722,552	)		(18,013,209	)
Total stockholders' equity		5,873,303			6,110,676
Total liabilities and stockholders' equity	$	14,866,289		$	11,766,007

See accompanying notes to consolidated financial statements. 

F-2

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year ended September 30,
	2020			2019
Revenues:
Rental income - related party	$	503,512		$	11,564
Total revenues		503,512			11,564
Operating expenses:
Advertising and marketing		38,179			126,993
Professional fees		405,920			866,116
General and administrative expenses		2,007,642			1,626,596
Provision for doubtful accounts		-			783,905
Recovery of loss from provision for doubtful accounts		(1,761,675	)		-
Total operating expenses		690,066			3,403,610
Loss from operations		(186,554	)		(3,392,046	)
Other income (expense):
Interest income		333,681			29,109
Interest expense		(760,704	)		(426,424	)
Other income (expense)		-			(3,030	)
Loss on extinguishment of debt		-			(977,110	)
Interest expense - related party		(95,766	)		(134,167	)
Total other expense		(522,789	)		(1,511,622	)
Net loss	$	(709,343	)	$	(4,903,668	)
Basic and diluted loss per common share		(0.03	)	$	(0.21	)
Weighted average common shares outstanding		23,504,820			22,984,703

See accompanying notes to consolidated financial statements. 

F-3

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

									Additional
									Additional
	Preferred Stock				Common Stock				Paid In		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balances, September 30, 2018		-	$	-		22,106,763	$	2,211	$	19,937,606	$	(13,109,541	)	$	6,830,276
Stock-based compensation expense		-		-		-		-		488,793		-			488,793
Stock issued for cash, net		-		-		715,981		70		1,210,930		-			1,211,000
Stock issued for conversion of debt		-		-		174,342		17		261,496		-			261,513
Stock issued for warrants exercised, net		-		-		388,000		40		475,460		-			475,500
Warrants issued with debt		-		-		-		-		615,154		-			615,154
Stock issued for services		-		-		119,734		13		154,985		-			154,998
Warrants issued on debt modification		-		-		-		-		977,110		-			977,110
Net loss		-		-		-		-		-		(4,903,668	)		(4,903,668	)
Balances, September 30, 2019		-	$	-		23,504,820		2,351		24,121,534		(18,013,209	)		6,110,676
Stock-based compensation expense		-		-		-		-		381,970		-			381,970
Stock issued for services		-		-		191,490		19		89,981		-			90,000
Net loss		-		-		-		-		-		(709,343	)		(709,343	)
Balances, September 30, 2020		-	$	-		23,696,310		2,370		24,593,485		(18,722,552	)		5,873,303

See accompanying notes to consolidated financial statements.

F-4

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Year ended September 30,
	2020			2019
Cash flows from operating activities:
Net loss	$	(709,343	)	$	(4,903,668	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		446,854			1,152
Amortization of right of use assets		66,877			-
Recovery of loss provision for doubtful accounts		(1,761,675	)		-
Provision for doubtful accounts		-			783,905
Stock based compensation and option expense		381,970			488,793
Stock issued for services		90,000			154,998
Loss on disposal of fixed assets		-			3,030
Loss on extinguishment of debt		-			977,110
Amortization of equity instruments issued to lessor		-			39,460
Amortization of debt discount		311,370			171,628
Changes in operating assets and liabilities:
Tenant receivable – related party		(113,053	)		(11,564	)
Notes and other receivables		1,761,675			-
Prepaid expenses		14,242			(6,162	)
Accounts payable and accrued expenses		10,879			15,710
Operating lease liability		(8,917	)		-
Related party payables		65,000			-
Interest payable		(62,950	)		70,798
Interest payable - related party		13,962			25,993
Other payables		11,442			223
Net cash flows provided by (used in) operations		518,333			(2,188,594	)
Cash flows from investing activities:
Additions to fixed assets		(386,487	)		(5,889,794	)
Payments received on notes receivable - related party		29,251			28,001
Net cash flows used in investing activities		(357,236	)		(5,861,793	)
Cash flows from financing activities:
Common stock issued for cash, net		-			1,211,000
Proceeds from note payable, net of financing costs		150,000			3,910,000
Proceeds from the exercise of warrants		-			475,500
Payments on note payable - related party		(1,175,000	)		-
Principal payments on notes payable		(235,000	)		(271,000	)
Net cash flows (used in) provided by financing activities		(1,260,000	)		5,325,500
Net decrease in cash, cash equivalents, and restricted cash		(1,098,903	)		(2,724,887	)
Cash, cash equivalents, and restricted cash at beginning of period		1,292,062			4,016,949
Cash, cash equivalents, and restricted cash at end of period	$	193,159		$	1,292,062
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	$	594,088		$	286,244
Cash paid for income taxes	$	-		$	-
Non-Cash Investing and Financing Activities:
Debt discount related to warrants issued with debt and Beneficial Conversion Feature	$	-		$	615,154
Shares issued for conversion of debt and accrued interest	$	-		$	261,513
ROU asset and operating lease obligations recognized under adoption of Topic 842	$	6,980,957		$	-

See accompanying notes to consolidated financial statements. 

F-5

AMERICANN, INC.

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

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 design, develop, lease and operate state-of-the-art cultivation, processing and manufacturing facilities for licensed cannabis businesses throughout the United States.

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

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

All significant intercompany balances and transactions have been eliminated in the consolidated financial statements.

Summary of Significant Accounting Policies

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of AmeriCann, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant estimates and assumptions made by management are valuation of equity instruments, deferred tax asset valuation and allowance and collectability of long-lived assets. Actual results could differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.  

Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, demand deposit accounts and temporary cash investments with maturities of ninety days or less at the date of purchase.

Income Taxes

In accordance with ASC Topic 740, Income Taxes, the provision for income taxes is computed using the asset and liability method. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the consolidated balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the consolidated financial statements.  The resulting deferred tax assets or liabilities have been adjusted to reflect changes in tax laws as they occur.  A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.

F-6

We expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-not" threshold, the amount to be recognized in the consolidated financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of September 30, 2020 and 2019, we had no uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We currently have no federal or state tax examinations nor have we had any federal or state examinations since our inception. To date, we have not incurred any interest or tax penalties.

For federal tax purposes, our 2017 through 2019 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations.

Concentration of Credit Risks and Significant Customers

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, notes receivable, deposits tenant receviables and notes receivable. We place our cash with high credit quality financial institutions. As of September 30, 2020, we had outstanding notes receivable of $119,512 and tenant receivables of $124,617 with BASK, Inc. ("BASK"), a related party. As of September 30, 2019, we had outstanding notes receivables of $148,763 with BASK and a note and a receivable in the amount of $1,761,675 with WGP (exclusive of provision for doubtful accounts of $1,761,675).  Balance due from Wellness Group Pharms ("WGP") was collected in full in February 2020.

For the year ended September 30, 2020, all of the Company’s revenue was earned from one customer, BASK. As of September 30, 2020, the BASK tenant receivable balance was $124,617.

Financial Instruments and Fair Value of Financial Instruments

We adopted ASC Topic 820, Fair Value Measurement, for assets and liabilities measured at fair value on a recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure of fair value measurements. 

ASC Topic 820 defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. We had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. We had no financial assets or liabilities carried and measured on a recurring basis during the reporting periods. The carrying value of short-term financial instruments, including cash and cash equivalents, tenant and notes receivable, accounts payable and accrued expenses, and short-term borrowings approximate fair value due to the relatively short period to maturity for these instruments. The long-term borrowings approximate fair value since the related rates of interest approximates current market rates.

Derivative Liabilities

We evaluate stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each consolidated balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date. We determined that none of our financial instruments meet the criteria for derivative accounting as of September 30, 2020 and 2019.

F-7

Operating leases

Effective October 1, 2019, we adopted Topic 842 using the effective date method. Under this method, periods prior to adoption remain unchanged. We determine if an arrangement is a lease at inception.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less).

Long-Lived Assets

Our long-lived assets consisted of property, plant and equipment and are reviewed for impairment in accordance with the guidance of the Topic ASC Topic 360, Property, Plant, and Equipment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. There were no impairment losses recognized for the years ended September 30, 2020 and 2019.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment begins in the month following the month when the asset is placed into service and is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from three to twenty years. Property,  plant and equipment consist of:

	September 30, 2020			September 30, 2019
Buildings and improvements	$	7,608,087		$	7,221,600
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		7,960,427			7,573,940
Accumulated depreciation		(448,006	)		(1,152	)
Property, plant and equipment, net	$	7,512,421		$	7,572,788

Depreciation expense for the years ended September 30, 2020 and 2019 amounted to $446,854 and $1,152, respectively.

Equity Instruments Issued to Non-Employees for Acquiring Goods or Services

Effective October 1, 2019, the Compnay adopted ASU 2018-07, Compensation – “Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting”, which addresses aspects of the accounting for nonemployee share-based payment transactions. Upon adoption, all of the issuances of stock to non-employees for goods and services are treated in the same matter as share based awards to employees.  The adoption did not have an impact on the Company’s financial statements.

Non-Cash Equity Transactions

Shares of equity instruments issued for noncash consideration are recorded at the estimated fair market value of the consideration granted based on the estimated fair market value of the equity instrument, or at the estimated fair market value of the goods or services received, whichever is more readily determinable.

Stock-Based Compensation

The Company accounts for share-based awards to employees in accordance with ASC Topic 718, Stock Compensation Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Effective October 1, 2019, the Company adopted ASU 2018-07, Compensation – “Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting”, which addresses aspects of the accounting for nonemployee share-based payment transactions.

F-8

Related Parties

A party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.

Revenue Recognition

Effective October 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the new standard, we recognize revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists, (ii) identifiable performance obligations under the contract exist, (iii) the transaction price is determinable for each performance obligation, (iv) the transaction price is allocated to each performance obligation, and (v) when the performance obligations are satisfied. Currently, we derive all of our revenues from property leases. Property leases are not within the scope of ASC 606.

Property lease revenue is earned through annual leases for facilities used in agricultural/manufacturing activities and the Company records revenues on a straight-line basis over the term of these leases.  Property lease revenues from these sources are recurring on an annual basis.  Unearned property lease revenues were $0 at both September 30, 2020 and 2019. The Company also receives a revenue participation fee which is considered a variable payment and thus is recorded in the period earned in accordance with ASC 842.

Advertising Expense

Advertising, promotional and selling expenses consist of sales and marketing expenses, and promotional activity expenses. Expenses are recognized when incurred.

General and Administrative Expense

General and administrative expenses consist of professional service fees, rent and utility expenses, meals, travel and entertainment expenses, and other general and administrative overhead costs. Expenses are recognized when incurred.

Loss per Share

We compute net loss per share in accordance with the ASC Topic 260. The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.

Basic loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Shares issuable upon the exercise of equity instruments such as warrants and options were not included in the loss per share calculations for 2020 and 2019 because the inclusion would have been anti-dilutive.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which provides guidance requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for substantially all leases, with the exception of short-term leases. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the statement of income. The Company adopted Topic 842 effective October 1, 2019 and elected the package of transition practical expedients for expired or existing contracts, which does not require reassessment of: (1) whether any of the Company’s contracts are or contain leases, (2) lease classification and (3) initial direct costs. In July 2018, the FASB issued ASU No. 2018-11, "Targeted Improvements - Leases (Topic 842)." The Company did not elect the hindsight practical expedient. This update provides an optional transition method that allows entities to elect to apply the standard using the modified retrospective approach at its effective date, versus recasting the prior years presented. If this adoption method is elected, an entity would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption. The Company elected this adoption method on October 1, 2019 and the adoption did not result in any cumulative impact to retained earnings.

Additionally, the Company’s adoption of Topic 842 did not have a significant impact on the recognition, measurement or presentation of lease revenue and lease expenses within the consolidated statements of operations or the consolidated statements of cash flows. The Company’s adoption of Topic 842 did not have a material impact on the timing or amount of the Company’s lease revenue as a lessor in its sublease agreement.  The Company’s prepaid land lease balance that was recorded in current and other assets in the Company’s September 30, 2019 balance sheet has been classified as a component of the Company’s right-of-use assets effective October 1, 2019. The consolidated financial statements for the year ended September 30, 2020 are presented under the new standard, while comparative years presented are not adjusted and continue to be reported in accordance with the Company’s historical accounting policy. See Note 10, Commitments and Contingencies, for more information. 

F-9

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40).” The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC 470-20, “Debt: Debt with Conversion and Other Options,”, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU 260, “Earnings per Share,” to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the timing of adoption and impact of the updated guidance on its financial statements.

In December 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This guidance removes certain exceptions to the general principles in Topic 740 and provides consistent application of U.S. GAAP by clarifying and amending existing guidance. The effective date of the new guidance for public companies is for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of the updated guidance on its financial statements.

NOTE 2. GOING CONCERN

The accompanying consolidated 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 a working capital deficit of $232,158 as of September 30, 2020, an accumulated deficit of $18,722,552 and $18,013,209 at September 30, 2020 and 2019, respectively, and had a net loss of $709,343 for the year ended September 30, 2020. 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. 

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 consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts in the consolidated statements of cash flows:

	September 30, 2020		September 30, 2019
Cash and cash equivalents	$	183,009	$	455,843
Restricted cash		10,150		836,219
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	193,159	$	1,292,062

Amounts included in restricted cash represent those required to be set aside by the Cannabis Control Commission in Massachusetts as well as by a contractual agreement with a lender for the payment of specific construction related expenditures as part of the Company’s property development in Massachusetts.

F-10

NOTE 4. NOTES RECEIVABLE

Notes and other receivables as of September 30, 2020 and 2019, consisted of the following: 

	September 30, 2020			September 30, 2019
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 and legal fees of $206,675, construction advances of $332,357 and accrued interest of $549,349 at September 30, 2019. Net of reserves of $1,761,675 as of September 30, 2019. Balance was collected in full in February 2020.	$	-		$	-
Related party note receivable from BASK, a non-profit corporation, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.		119,512			148,763
		119,512			148,763
Less: Current portion		(37,165	)		(32,270	)
	$	82,347		$	116,493

The notes and other receivables from WGP were fully reserved due to ongoing disputes between the Company and WGP. The Company filed a Demand for Arbitration against WGP on April 7, 2017. On January 18, 2018, the arbitration panel awarded the Company $1,045,000 plus interest at the rate of 18% per year from April 18, 2015 to March 18, 2018 for $550,000. In addition to the principal and interest awarded of $1,595,000, the Company was also awarded its attorneys’ fees and arbitration fees. The Company reversed the previously recorded reserve on the receivable with WGP in the amount of $1,761,675 since on February 5, 2020 the Company received cash of $2,069,138 from WGP as payment in full for the fully reserved notes and other receivables which include principal, interest, attorneys’ fees and arbitration fees. 

NOTE 5. NOTES PAYABLE

Unrelated

On August 25, 2020, the Company borrowed $153,000 from an unrelated party. The loan is unsecured, bears interest at a rate of 10% and is due and payable on August 25, 2021. The loan may not be prepaid. After October 29, 2019, the Company may not repay the loan without the consent of the lender. At any time after February 21, 2021, the full value of any unpaid principal is convertible into the Company’s common stock at a variable conversion price. The conversion price is equal to: (a) if the market price is greater than or equal to $1.10, the greater of (1) the variable conversion price (defined as market price multiplied by 65 percent) and (2) $0.72, and (b) if the market price is less than $1.10, the lesser of (1) the variable conversion price and (2) $0.72. The Company incurred debt issuance costs of $3,000 which was recorded as a debt discount.  Amortization expense related to the debt discount was $250 during the year ended September 30, 2020.

On August 2, 2019 the Company secured a $4,000,000 investment from an unrelated third party in the form of a loan. The loan was evidenced by a note which bears interest at the rate of 11% per year, is due and payable on August 2, 2022 and is secured by a first lien on Building 1 at the MCC.

F-11

The note holder also received a warrant which allows the holder to purchase 600,000 shares of the Company’s common stock at a price of $1.50 per share. The warrant will expire on the earlier of (i) August 2, 2024 or (ii) twenty days after written notice of the holder that the daily Volume Weighted Average Price of the Company’s common stock was at least $4.00 for twenty consecutive trading days and the average daily volume of trades of the Company’s common stock during the twenty trading days was at least 150,000 shares.

The broker for the loan received a cash commission of $320,000 plus warrants to purchase 48,000 shares of the Company's common stock. The warrants are exercisable at a price of $1.50 per share and expire on August 2, 2024. The cash commission and the fair value of the warrants amounting to $52,392 were recognized as a discount to the note.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the 600,000 warrants was $562,762 which was recognized as additional paid in capital and a corresponding debt discount.

At September 30, 2020, the outstanding principal on this note was $4,000,000 and the unamortized debt discount was $571,483. All debt discounts are being amortized on a straight-line basis over the terms of the note. Amortization expense related to the debt discounts was $311,370 for the year ended September 30, 2020.

December 2017 Convertible Note Offering 

On December 29, 2017 the Company sold convertible notes in the principal amount of $800,000 to a group of accredited investors. The notes bear interest at 8% per year, are unsecured, and were due and payable on December 31, 2018. On December 31, 2018, the maturity date of the notes were extended to December 31, 2019. The notes were fully paid off in January 2020.

The original notes included a provision to be converted at any time into shares of the Company's common stock at an initial conversion price of $1.50 per share.

The note holders also received warrants which entitle the note holders to purchase up to 533,333 shares of the Company's common stock. The warrants are exercisable at a price of $1.50 per share and expire on October 17, 2022.

The placement agent for the offering received a cash commission of $64,000, plus warrants to purchase 106,667 shares of the Company's common stock. The warrants are exercisable at a price of $1.50 per share and expire on December 29, 2022.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the 640,000 warrants was $607,024 which was recognized as additional paid in capital and a corresponding debt discount. After such allocation, the effective conversion price on the issuance date was less than the fair value of the stock into which the notes were convertible, giving rise to a beneficial conversion feature of $128,976 which was recognized as additional paid in capital and a corresponding debt discount.

The $64,000 paid to the placement agent was allocated on a pro-rata basis to the warrants and the debt which was recorded as an offset to additional paid in capital and an increase in debt discount of $48,562 and $15,438, respectively.

During February 2019, a loan in the principal amount of $30,000 was converted into 20,000 shares of common stock.

During May 2018, a loan in the principal amount of $575,000 was converted into 383,333 shares of common stock. In addition, interest payable in the amount of $15,233 was converted into 10,155 shares.

At September 30, 2020 and September 30, 2019, the outstanding principal on these notes was $0 and $195,000, respectively. All debt discounts are being recognized on a straight-line basis over the terms of the notes. Amortization expense related to the debt discounts were $0 and $51,749 for the years ended September 30, 2020 and 2019, respectively.

February 2018 Convertible Note Offering

On February 12, 2018 the Company sold convertible notes in the principal amount of $810,000 to a group of accredited investors. The notes bear interest at 8% per year, are unsecured, and are due and payable on December 31, 2018. On December 31, 2018, the notes were extended to mature on December 31, 2019. At the option of the note holders, the notes may be converted at any time into shares of the Company's common stock at an initial conversion price of $1.50 per share.

The note holders also received warrants which entitle the note holders to purchase up to 540,000 shares of the Company's common stock. The warrants are exercisable at a price of $1.50 per share and expire on October 17, 2022.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the 540,000 warrants was $523,013 which was recognized as additional paid in capital and a corresponding debt discount. After such allocation, the effective conversion price on the issuance date was less than the fair value of the stock into which the note is convertible, giving rise to a beneficial conversion feature of $286,987 which is recognized as additional paid in capital and a corresponding debt discount.

During January 2019, a loan in the amount of $35,000 was repaid in cash.

F-12

In October 2018, a loan in the principal amount of $45,000 was converted into 30,000 shares of common stock. In addition, interest payable in the amount of $1,992 was converted into 1,328 shares.

During July 2018, loans in the principal amount of $375,000 were converted into 250,000 shares of common stock. In addition, interest payable in the amount of $14,704 was converted into 9,802 shares.

In May 2019, loans in the principal amount of $150,000 were converted into 100,000 shares of common stock. In addition, interest payable in the amount of $19,521 was converted into 13,014 shares.

In April 2019, loans in the amount of $15,000 were converted to 10,000 shares of common stock.

A loan in the amount of $40,000 was repaid in January 2020.  On December 31, 2019, the remaining outstanding note in the amount of $150,000 was extended to mature on December 31, 2020.

At September 30, 2020 and September 30, 2019, the outstanding principal on these notes was $150,000 and $190,000, respectively. All debt discounts are being recognized on a straight-line basis over the terms of the notes. Amortization expense related to the debt discounts were $0 and $87,001 for the years ended September 30, 2020 and 2019, respectively.

Related Party

SCP. 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 $1,756,646 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 second note, in the principal amount of $756,646, 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 but is secured by 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.

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 expired 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.

On September 30, 2019, both notes were amended and combined into one note, in the principal amount of $1,756,646, bearing interest of 9% per year and maturing on December 31, 2022. Additionally, the conversion option in the first note was eliminated. The new note is secured by all amounts due from WGP or its affiliates. The note holders also received warrants to purchase 1,500,000 shares of the Company's common stock. The warrants are exercisable at a price of $1.25 per share and expire on December 31, 2022. The debt modification was deemed substantial and was accounted for as a debt extinguishment. The fair value of the 1,500,000 warrants was $977,110 and was recognized as loss on extinguishment of debt and the remaining unamortized premium and discount was written off during the year ended September 30, 2019.

The Company made principal payments on the note of $1,175,000 during the year ended September 30, 2020. Accrued interest on the note was $26,246 and $12,283 at September 30, 2020 and September 30, 2019, respectively.

At September 30, 2020, the outstanding principal on this note was $581,646, and the unamortized debt premium was $0. Amortization of debt premium was $0 and $25,673 for the years ended September 30, 2020 and 2019, respectively.

During the year ended September 30, 2020, the Company also incurred $180,000 of consulting expenses with SCP of which $65,000 remains outstanding at September 30, 2020.

F-13

NOTE 6. RELATED PARTY TRANSACTIONS

BASK. On April 7, 2016, we signed agreements with BASK. BASK is one of a limited number of organizations that has received a provisional or final registration to cultivate, process and sell medical and adult use cannabis by the Massachusetts Cannabis Control Commission.

Pursuant to the agreements, we agreed to provide BASK with financing for construction and working capital required for BASK’s approved dispensary and cultivation center in Fairhaven, MA.

On August 15, 2018, the Company combined the construction and working capital advances of $129,634 and accrued interest of $44,517 and setup a new loan with payments over 5 years with 18% interest. At September 30, 2020 and 2019, the outstanding balance on the note receivable was $119,512 and $148,763, respectively.

On July 26, 2019, the Company entered into a 15-Year Triple Net lease of Building 1 of the MCC with BASK. The lease commenced on September 1, 2019 and includes an annual base rent of $135,000 and a revenue participation fee equivalent to 15% of BASK's gross revenues. As of September 30, 2020, the BASK tenant receivable balance was $124,617.

Tim Keogh, our Chief Executive Officer, is a Board Member of BASK.

NOTE 7. EARNINGS PER SHARE

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

	Year Ended
	September 30,
	2020			2019
Net loss attributable to common stockholders	$	(709,343	)	$	(4,903,668	)
Basic weighted average outstanding shares of common stock		23,504,820			22,984,703
Dilutive effects of common share equivalents		-			-
Dilutive weighted average outstanding shares of common stock		23,504,820			22,984,703
Basic and diluted net loss per share of common stock	$	(0.03	)	$	(0.21	)

As of September 30, 2020, we have excluded 1,850,000 of stock options and 9,638,650 of warrants and 100,000 shares that would be issued from conversion of outstanding convertible notes from the computation of diluted net loss per share since the effects are anti-dilutive. As of September 30, 2019, we have excluded 750,000 of stock options 11,238,650 of warrants and 256,667 shares that would be issued from the conversion of outstanding convertible notes from the computation of diluted net loss per share since the effects are anti-dilutive.

NOTE 8. INCOME TAXES

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur. The Company accounts for income taxes pursuant to ASC Topic 740. The Company has made an early adoption of ASU 2015-17 Balance Sheet Classification of Deferred Taxes.

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses and other items. Loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.

The components of the deferred income tax assets and liabilities arising under ASC Topic 740 were as follows:

	September 30,
	2020			2019
Deferred tax assets	$	2,838,966		$	2,438,893
Deferred tax liabilities		-			-
Valuation allowance		(2,838,966	)		(2,438,893	)
Net deferred tax assets/(liabilities)	$	-		$	-

F-14

The types of temporary differences between the tax basis of assets and their financial reporting amounts that give rise to a significant portion of the deferred assets and liabilities are as follows:

	Year Ended September 30,
	2020						2019
	Temporary Difference			Tax Effect			Temporary Difference			Tax Effect
Deferred tax assets
Net operating loss	$	709,343		$	174,144		$	4,903,668		$	1,209,245
Tax impact true up		-			20,927			-			-
Other temporary differences		835,040			205,002			(1,756,726	)		(433,209	)
Net deferred tax assets		1,544,383			400,073			3,146,942			776,036
Valuation allowance		(1,544,383	)		(400,073	)		(3,146,942	)		(776,036	)
Total deferred tax asset		-			-			-			-
Deferred tax liabilities
Total deferred liability		-			-			-			-
Total net deferred tax asset	$	-		$	-		$	-		$	-

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.

At September 30, 2020 and September 30, 2019, the Company had approximately and $11,564,017 and 10,019,634 respectively, in unused federal net operating loss carryforwards, which will begin to expire principally in the year 2034. A deferred tax asset at each date of approximately $379,146 and $776,036 resulting from the loss carryforwards and other temporary differences has been offset by a 100% valuation allowance. The change in the valuation allowance for the period ended September 30, 2020 and September 30, 2019 was approximately $ (400,073) and $(776,036).

A reconciliation of the U.S. statutory federal income tax rate to the effective tax rate is as follows:

	September 30,
	2020			2019
U.S. Federal statutory graduated rate		21.00	%		21.00	%
State income tax rate, net of federal benefit		3.55	%		3.66	%
Total rate		24.55	%		24.66	%
Less: Net operating loss for which no benefit is currently available		(24.55	)%		(24.66	)%
Net effective rate		0.00	%		0.00	%

The Company’s income tax filings are subject to audit by various taxing authorities. The Company’s open audit periods are September 30, 2017, 2018, and 2019. In evaluating the Company’s provisions and accruals, future taxable income, and reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes its estimates are appropriate based on current facts and circumstances.

NOTE 9. EQUITY

Preferred Stock

The Company has authorized 20,000,000 shares of $.0001 par value preferred stock. No preferred shares were outstanding at September 30, 2020 and 2019.

F-15

Common Stock

On December 12, 2017, the Company entered into an amended and restated equity line agreement with Mountain States Capital, LLC (MSC). Under the equity line agreement, MSC agreed to provide the Company with up to $10,000,000 of funding through the purchase of shares of the Company's common stock.

During the term of the Agreement, the Company, at its sole discretion, may deliver a Put Notice to MSC, which will specify the dollar amount which the Company wants to draw down under the Equity Line. The amount the Company can draw down at any one time is the lesser of twice the average of the 10-day average daily trading volume (computed by multiplying the volume weighted average price for each day by the number of shares traded for that day), or $500,000.

A closing will occur on the date which is no earlier than five trading days following and no later than seven trading days following the applicable Put Notice. On each Closing Date, the Company will sell, and MSC will purchase, the shares of the Company's common stock specified in the Put Notice.

The amount to be paid by MSC on a particular Closing Date will be determined by dividing the dollar amount specified in the Put Notice by the Purchase Price. The Purchase Price is 90% of the lowest daily volume weighted average price of the Company's common stock during the Pricing Period. The Pricing Period, with respect to a particular Put Notice, is five consecutive trading days including, and immediately following, the delivery of a Put Notice. However, no Put Notice may be delivered on a day that is not a Trading Day.

The equity line agreement expired on August 14, 2019.

During the year ended September 30, 2019, the Company submitted Put Notices for a total of 715,981 shares for $1,211,000 in cash.

During the year ended September 30, 2019, the Company converted debt and interest of $261,513 into 174,342 shares of common stock.

During the year ended September 30, 2019, we issued 119,734 shares of stock for services valued $154,998.

During the year ended September 30, 2020, we issued 191,490 shares of stock for services valued $90,000.

During the year ended September 30, 2019, the Company issued 388,000 shares of common stock for total proceeds of $475,500 from the exercise of warrants.

F-16

Stock Options

On August 18, 2017, our board of directors adopted a stock incentive plan (“the plan”) that provides for the grant of Incentive Stock Options, Non-Qualified Stock Options or Stock Bonuses to persons who are employees of the Company, employees of subsidiaries of the Company, directors, officers, and consultants. Under the plan, the Company may grant up to 1,500,000 options, each to purchase one share of common stock, subject to an exercise price and vesting schedule to be established by the board of directors at the time of the grant.

The fair value of the options granted during the years ended September 30, 2020 and 2019 were established using the Black Scholes option pricing model using the following assumptions:

● Risk-free interest rate – 0.28% to 1.55%

● Expected term – 4.8 to 5.0 years

● Volatility – 118% to 142%

Options Issuances in 2020

On September 30, 2020, the Company awarded a total of 500,000 options to two executives at an exercise price of $1.50 per share. The options vested immediately and can be exercised at any time on or before September 30, 2025.

On September 30, 2020, the Company also awarded a total of 500,000 options to two executives at an exercise price of $3.00 per share. The options vested immediately and can be exercised at any time on or before September 30, 2025.

As these options were fully vested at grant date, the full value of $301,770 was recognized immediately as stock based compensation expense and no further expense will be recognized associated with these awards.

Options Issuances in 2019

On September 30, 2019, the Company awarded a total of 600,000 options to two executives at an exercise price of $1.50 per share. The options vested immediately and can be exercised at any time on or before August 2, 2024.

As these options were fully vested at grant date, the full value of $488,793 was recognized immediately as stock based compensation expense and no further expense will be recognized associated with these awards.

On August 27, 2019, the Company awarded a total of 300,000 options to an executive at an exercise price of $1.50 per share. The options vest over a period of 2.5 years and can be exercised any time on or before August, 27, 2024.

F-17

 The following table shows the stock option activity for the years ended September 30, 2020 and 2019: 

						Weighted
				Weighted		Average
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(Years)		Value
Outstanding as of September 30, 2018		150,000		$	2.21		2.9	$	-
Granted		900,000			1.50		4.8		-
Outstanding as of September 30, 2019		1,050,000		$	1.64		4.4	$	-
Granted		1,000,000		$	2.25		5.0	$	-
Forfeited		(200,000	)	$	1.50
Outstanding as of September 30, 2020		1,850,000		$	1.99		4.2	$	-
Vested and expected to vest at September 30, 2020		1,850,000		$	1.99		4.2	$	-
Exercisable at September 30, 2020		1,850,000		$	1.99		4.2

Stock based compensation expense related to the options was $471,971 and $578,790 for the years ended September 30, 2020 and 2019, respectively. At September 30, 2020, unrecognized stock-based compensation associated with stock options amounted to $0. During the years ended September 30, 2020 and 2019, we received proceeds of $0 from stock option exercises.

Warrants

Warrant Issuances in 2020

The Company did not issue any warrants during the year ended September 30, 2020.

Warrant Issuances in 2019

As disclosed in Notes 5 and 10, the Company issued warrants to purchase up to 600,000 shares of common stock at an exercise price of $1.50 per share and expire on August 2, 2024. The fair value of the warrants was determined using the Black-Scholes option pricing model.

In August 2019, as part of the Company's $4,000,000 financing, the Company issued warrants to purchase 48,000 shares of the Company's stock to the placement agent as commission. The warrants are exercisable at a price of $1.50 per share and expire on August 2, 2024.

In September 2010, as part of the Company's debt modification, the Company issued warrants to purchase up to 1,500,000 shares of the Company's stock to the noteholder. The warrants are exercisable at a price of $1.25 per share and expire on December 31, 2022.

F-18

The fair value of the warrants issued in 2019 was determined using the Black-Scholes option pricing model using the following assumptions:

●  Expected term – 3.25 to 5 years

●  Volatility – 119% to 144%

●  Risk-free rate – 1.56% to 1.67%

●  Stock price - $0.95 to $1.23

●  Expected dividends – $0

The following table shows the warrant activity for the years ended September 30, 2020 and 2019: 

						Weighted
				Weighted		Average
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(Years)		Value
Outstanding as of September 30, 2018		9,478,650		$	1.55	$	2.6	$	-
Granted		2,148,000			1.33		-
Exercised		(388,000	)		1.23
Outstanding as of September 30, 2019		11,238,650			1.52		2.30	$	-
Expired		(1,600,000	)		2.25			$
Outstanding as of September 30, 2020		9,638,650			1.39		1.80		-
Exercisable at September 30, 2020		9,638,650			1.39		1.50	$	-

NOTE 10. COMMITMENTS AND CONTINGENCIES

MCC.  On January 14, 2015, we entered into an agreement to purchase a 52.6 acre parcel of undeveloped land in Freetown, Massachusetts. The property is located approximately 47 miles southeast of Boston. We are developing the property as the MCC. Plans for the may include the construction of sustainable greenhouse cultivation and processing facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program. We paid the seller $100,000 upon the signing of the agreement which amount will be applied toward the purchase price at the closing.

Between August 2015 and September 2016, there were several amendments to the Agreement to extend the closing date to October 14, 2016. As consideration for the extensions, the Company, at closing, agreed to increase the purchase price to $4,325,000 and paid the seller $725,000, which was be applied to the purchase price of the land if and when the Company closes on this transaction. As of September 30, 2016, the Company had paid $925,000 that was to be applied to the purchase price of the land at closing. On October 17, 2016, the Company closed on the land purchase via a sales-leaseback transaction. See ‘Operating Leases’ section below for additional information.

Operating Leases 

Land

On October 17, 2016, the Company closed the acquisition of the 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. In August 2019, the Company completed construction of Building 1 at MCC.

F-19

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.

Effective October 1, 2019, the Company adopted Topic 842 and recorded ROU assets and lease liabilities of $6,980,957 and $4,256,869, respectively. As part of the adoption, prepaid land lease balance of $2,724,088 was classified as a component of the Company’s ROU assets.

The Company constructed Building 1 on the leased land and on September 1, 2019, BASK, commenced its 15-year sublease of Building 1 which includes a base rent plus 15% of BASK’s gross revenues. This sublease income is recorded as Rental income - related party on the Company’s consolidated statements of operations.

As of September 30, 2020, the Company’s right-of-use assets were $6,914,080, the Company’s current maturities of operating lease liabilities were $4,728, and the Company’s noncurrent lease liabilities were $4,243,224. During the year ended September 30, 2020, the Company had operating cash flows from operating leases of $256,125.

F-20

The table below presents lease related terms and discount rates as of September 30, 2020.

	As of September 30, 2020
Weighted average remaining lease term
Operating leases		46
Weighted average discount rate
Operating leases		7.9	%

 The reconciliation of the maturities of the operating leases to the lease liabilities recorded in the Consolidated Balance Sheet as of September 30, 2020 are as follows:

2021		341,500
2022		341,500
2023		341,500
2024		341,500
2025		341,500
Thereafter		14,001,500
Total lease payments		15,709,000
Less: Interest		(11,461,048	)
	$	4,247,952
Less: operating lease liability, current portion		(4,728	)
Operating lease liability, long term	$	4,243,224

Office space 

The Company leases its office space located at 1555 Blake St., Unit 502, Denver, CO 80202 for $2,500 per month with a lease term of less than 12 months.

Lease expense for office space was $18,303 and $15,055 for the years ended September 30, 2020 and 2019, respectively.

Aggregate rental expense under all leases totaled $401,021 and $410,162 for the years ended September 30, 2020 and 2019, respectively.

NOTE 11. SUBSEQENT EVENTS

On October 12, 2020, an outstanding convertible note in the amount of $150,000 originally due on December 31, 2020 was extended to mature on December 31, 2021. All accrued interest is to be paid by December 31, 2020.

On December 4, 2020, the outstanding $4,000,000 loan due to an unrelated party was increased by $500,000 and the maturity date of the loan was extended to August 1, 2023. All other provisions of the original $4,000,000 loan remain the same. The proceeds of this loan will be used to develop Building 2 at the Company's Massachusetts Cannabis Center.

F-21

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the 21^st day of December, 2020.

AMERICANN, INC.
By:	/s/ Timothy Keogh
	Timothy Keogh, Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of l934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Timothy Keogh
Timothy Keogh	Chief Executive Officer and a Director	December 21, 2020
/s/ Benjamin J. Barton
Benjamin J. Barton	Chief Financial and Accounting Officer and a Director	December 21, 2020
/s/ J. Tyler Opel
J. Tyler Opel	Director	December 21, 2020

23

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 Annual Report on Form 10-K for the period ended September 30, 2020 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: December 21, 2020

/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 Annual Report on Form 10-K for the period ended September 30, 2020 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: December 21, 2020

/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 Annual Report on Form 10-K of AmeriCann, Inc. (the “Company”), for the year ended September 30, 2020, 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 December 21, 2020

By:	/s/ Benjamin Barton
	Benjamin Barton
	Principal Financial Officer

Dated December 21, 2020

XML

Document And Entity Information - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Dec. 15, 2020	Mar. 31, 2020
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	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		23,696,310
Entity Public Float			$ 7,281
Entity Shell Company	false
Document Type	10-K
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false
Title of 12(g) Security	Common Stock, ($0.001 Par Value)

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Assets
Cash and cash equivalents	$ 183,009	$ 455,843
Restricted cash	10,150	836,219
Tenant receivable – related party	124,617	11,564
Current portion of prepaid land lease	0	57,959
Prepaid expenses and other current assets	2,500	13,632
Current portion of note receivable - related party	37,165	32,270
Total current assets	357,441	1,407,487
Property, Plant and Equipment, net	7,512,421	7,572,788
Operating lease - right-of-use asset	6,914,080	0
Notes and other receivables (net of allowance of $1,761,675 as of September 30, 2019)	0	0
Notes Receivable, Related Parties, Noncurrent	82,347	116,493
Prepaid land lease and related deposits, net of current portion		2,666,129
Security deposit and other assets		3,110
Total assets	14,866,289	11,766,007
Current Liabilities:
Accounts payable and accrued expenses	276,155	265,276
Accounts payable - related party	65,000
Interest payable (including $26,246 and $12,283 to related parties)	72,895	121,883
Other payables	20,571	9,129
Operating lease liability, short term	4,728
Notes payable	150,250	385,000
Total current liabilities	589,599	781,288
Notes payable (net of unamortized discounts of $571,483 and $882,603)	3,578,517	3,117,397
Notes payable - related party	581,646	1,756,646
Operating lease liability, long term	4,243,224	0
Total liabilities	8,992,986	5,655,331
Commitments and contingencies - see Note 10
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; 23,696,310 and 23,504,820 shares issued and outstanding as of September 30, 2020 and 2019, respectively	2,370	2,351
Additional paid in capital	24,593,485	24,121,534
Accumulated deficit	(18,722,552)	(18,013,209)
Total stockholders' equity	5,873,303	6,110,676
Total liabilities and stockholders' equity	$ 14,866,289	$ 11,766,007

XML

Consolidated Balance Sheets (Parentheticals) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Notes and other receivables, allowance		$ 1,761,675
Interest payable, related parties	$ 26,246	12,283
Note payable, discount, current	$ 571,483	$ 882,603
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)	23,696,310	23,504,820
Common stock, shares outstanding (in shares)	23,696,310	23,504,820

XML

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Revenues:
Rental income - related party	$ 503,512	$ 11,564
Total Revenues	503,512	11,564
Operating expenses:
Advertising and marketing	38,179	126,993
Professional fees	405,920	866,116
General and administrative expenses	2,007,642	1,626,596
Recovery of loss provision for doubtful accounts	(1,761,675)	783,905
Total operating expenses	690,066	3,403,610
Loss from operations	(186,554)	(3,392,046)
Other income (expense):
Interest income	333,681	29,109
Interest expense	(760,704)	(426,424)
Other income (expense)		(3,030)
Loss on extinguishment of debt		(977,110)
Interest expense - related party	(95,766)	(134,167)
Total other expense	(522,789)	(1,511,622)
Net loss	$ (709,343)	$ (4,903,668)
Basic and diluted loss per common share (in dollars per share)	$ (0.03)	$ (0.21)
Weighted average common shares outstanding (in shares)	23,504,820	22,984,703

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balances (in shares) at Sep. 30, 2018	22,106,763
Balances at Sep. 30, 2018	$ 2,211	$ 19,937,606	$ (13,109,541)	$ 6,830,276
Stock-based compensation expense		488,793		488,793
Stock issued for cash, net (in shares)	715,981
Stock issued for cash, net	$ 70	1,210,930		1,211,000
Stock issued for conversion of debt (in shares)	174,342
Stock issued for conversion of debt	$ 17	261,496		$ 261,513
Stock issued for warrants exercised, net (in shares)	388,000			388,000
Stock issued for warrants exercised, net	$ 40	475,460		$ 475,500
Benefical conversion feature		615,154		$ 615,154
Stock issued for services (in shares)	119,734			119,734
Stock issued for services	$ 13	154,985		$ 154,998
Warrants issued on debt modification		977,110		977,110
Net loss			(4,903,668)	(4,903,668)
Balances (in shares) at Sep. 30, 2019	23,504,820
Balances at Sep. 30, 2019	$ 2,351	24,121,534	(18,013,209)	6,110,676
Stock-based compensation expense		381,970		$ 381,970
Stock issued for services (in shares)	191,490			191,490
Stock issued for services	$ 19	89,981		$ 90,000
Net loss			(709,343)	(709,343)
Balances (in shares) at Sep. 30, 2020	23,696,310
Balances at Sep. 30, 2020	$ 2,370	$ 24,593,485	$ (18,722,552)	$ 5,873,303

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net loss	$ (709,343)	$ (4,903,668)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	446,854	1,152
Amortization of right of use assets	66,877
Recovery of loss provision for doubtful accounts	(1,761,675)	783,905
Stock based compensation and option expense	381,970	488,793
Stock issued for services	90,000	154,998
Loss on disposal of fixed assets		3,030
Loss on extinguishment of debt		977,110
Amortization of equity instruments issued to lessor		39,460
Amortization of debt discount	311,370	171,628
Changes in operating assets and liabilities:
Tenant receivable – related party	(113,053)	(11,564)
Notes and other receivables	1,761,675
Prepaid expenses	14,242	(6,162)
Accounts payable and accrued expenses	10,879	15,710
Operating lease liability	(8,917)
Related party payables	65,000
Interest payable	(62,950)	70,798
Interest payable - related party	13,962	25,993
Other payables	11,442	223
Net cash flows provided by (used in) operations	518,333	(2,188,594)
Cash flows from investing activities:
Additions to fixed assets	(386,487)	(5,889,794)
Payments received on notes receivable - related party	29,251	28,001
Net cash flows used in investing activities	(357,236)	(5,861,793)
Cash flows from financing activities:
Common stock issued for cash, net		1,211,000
Proceeds from note payable, net of financing costs	150,000	3,910,000
Proceeds from the exercise of warrants		475,500
Payments on note payable - related party	(1,175,000)
Principal payments on notes payable	(235,000)	(271,000)
Net cash flows (used in) provided by financing activities	(1,260,000)	5,325,500
Net decrease in cash, cash equivalents, and restricted cash	(1,098,903)	(2,724,887)
Cash, cash equivalents, and restricted cash at beginning of period	1,292,062	4,016,949
Cash, cash equivalents, and restricted cash at end of period	193,159	1,292,062
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	594,088	286,244
Cash paid for income taxes
Non-Cash Investing and Financing Activities:
Debt discount related to warrants issued with debt and Beneficial Conversion Feature		$ 615,154
Shares issued for conversion of debt and accrued interest (in shares)		261,513
ROU asset and operating lease obligations recognized under adoption of Topic 842	$ 6,980,957

XML

Note 1 - Description of Business and Significant Accounting Policies

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

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

NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

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 design, develop, lease and operate state-of-the-art cultivation, processing and manufacturing facilities for licensed cannabis businesses throughout the United States.

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

Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have

no

impact on net loss.

All significant intercompany balances and transactions have been eliminated in the consolidated financial statements.

Summary of Significant Accounting Policies

This summary of significant accounting policies of the Company is presented to assist in understanding the Company's consolidated financial statements. The consolidated financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of AmeriCann, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant estimates and assumptions made by management are valuation of equity instruments, deferred tax asset valuation and allowance and collectability of long-lived assets. Actual results could differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.  

Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, demand deposit accounts and temporary cash investments with maturities of

ninety

days or less at the date of purchase.

Income Taxes

In accordance with ASC Topic

740,

Income Taxes, the provision for income taxes is computed using the asset and liability method. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the consolidated balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the consolidated financial statements.  The resulting deferred tax assets or liabilities have been adjusted to reflect changes in tax laws as they occur.  A valuation allowance is provided when it is more likely than

not

that a deferred tax asset will

not

be realized.

We expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-

not"

threshold, the amount to be recognized in the consolidated financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions

not

meeting the threshold,

no

financial statement benefit is recognized. As of

September 30, 2020

and

2019,

we had

no

uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We currently have

no

federal or state tax examinations nor have we had any federal or state examinations since our inception. To date, we have

not

incurred any interest or tax penalties.

For federal tax purposes, our

2017

through

2019

tax years remain open for examination by the tax authorities under the normal

three

-year statute of limitations.

Concentration of Credit Risks and Significant Customers

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, notes receivable, deposits tenant receviables and notes receivable. We place our cash with high credit quality financial institutions. As of

September 30, 2020,

we had outstanding notes receivable of

$119,512

and tenant receivables of

$124,617

with BASK, Inc. ("BASK"), a related party. As of

September 30, 2019,

we had outstanding notes receivables of

$148,763

with BASK and a note and a receivable in the amount of

$1,761,675

with WGP (exclusive of provision for doubtful accounts of

$1,761,675

).  Balance due from Wellness Group Pharms ("WGP") was collected in full in

February 2020.

For the year ended

September 30, 2020,

all of the Company's revenue was earned from

one

customer, BASK. As of

September 30, 2020,

the BASK tenant receivable balance was

$124,617.

Financial Instruments and Fair Value of Financial Instruments

We adopted ASC Topic

820,

Fair Value Measurement, for assets and liabilities measured at fair value on a recurring basis. ASC Topic

820

establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure of fair value measurements. 

ASC Topic

820

defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic

820

requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level  1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level  2:	Observable market-based inputs or unobservable inputs that are corroborated by market data
Level  3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions.

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. We had

no

financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. We had

no

financial assets or liabilities carried and measured on a recurring basis during the reporting periods. The carrying value of short-term financial instruments, including cash and cash equivalents, tenant and notes receivable, accounts payable and accrued expenses, and short-term borrowings approximate fair value due to the relatively short period to maturity for these instruments. The long-term borrowings approximate fair value since the related rates of interest approximates current market rates.

Derivative Liabilities

We evaluate stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic

815

-

40,

Derivative Instruments and Hedging: Contracts in Entity's Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each consolidated balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic

815

-

40

are reclassified to a liability account at the fair value of the instrument on the reclassification date. We determined that

none

of our financial instruments meet the criteria for derivative accounting as of

September 30, 2020

and

2019.

Operating leases

Effective

October 1, 2019,

we adopted Topic

842

using the effective date method. Under this method, periods prior to adoption remain unchanged. We determine if an arrangement is a lease at inception.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are

not

included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms

may

include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting us to

not

apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of

12

months or less).

Long-Lived Assets

Our long-lived assets consisted of property, plant and equipment and are reviewed for impairment in accordance with the guidance of the Topic ASC Topic

360,

Property, Plant, and Equipment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset

may

not

be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and

third

-party independent appraisals, as considered necessary. There were

no

 impairment losses recognized for the years ended

September 30, 2020

and

2019.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment begins in the month following the month when the asset is placed into service and is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from

three

to

twenty

years. Property,  plant and equipment consist of:

	September 30, 2020			September 30, 2019
Buildings and improvements	$	7,608,087		$	7,221,600
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		7,960,427			7,573,940
Accumulated depreciation		(448,006	)		(1,152	)
Property, plant and equipment, net	$	7,512,421		$	7,572,788

Depreciation expense for the years ended

September 30, 2020

and

2019

amounted to

$446,854

and

$1,152,

respectively.

Equity Instruments Issued to Non-Employees for Acquiring Goods or Services

Effective

October 1, 2019,

the Compnay adopted ASU

2018

-

07,

Compensation – “Stock Compensation (Topic

718

): Improvements to Nonemployee Share-based Payment Accounting”, which addresses aspects of the accounting for nonemployee share-based payment transactions. Upon adoption, all of the issuances of stock to non-employees for goods and services are treated in the same matter as share based awards to employees.  The adoption did

not

have an impact on the Company's financial statements.

Non-Cash Equity Transactions

Shares of equity instruments issued for noncash consideration are recorded at the estimated fair market value of the consideration granted based on the estimated fair market value of the equity instrument, or at the estimated fair market value of the goods or services received, whichever is more readily determinable.

Stock-Based Compensation

The Company accounts for share-based awards to employees in accordance with ASC Topic

718,

Stock Compensation Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Effective

October 1, 2019,

the Company adopted ASU

2018

-

07,

Compensation – “Stock Compensation (Topic

718

): Improvements to Nonemployee Share-based Payment Accounting”, which addresses aspects of the accounting for nonemployee share-based payment transactions.

Related Parties

A party is considered to be related to us if the party directly or indirectly or through

one

or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we

may

deal if

one

party controls or can significantly influence the management or operating policies of the other to an extent that

one

of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in

one

of the transacting parties and can significantly influence the other to an extent that

one

or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.

Revenue Recognition

Effective

October 1, 2018,

we adopted ASU

2014

-

09,

Revenue from Contracts with Customers (Topic

606

). Under the new standard, we recognize revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists, (ii) identifiable performance obligations under the contract exist, (iii) the transaction price is determinable for each performance obligation, (iv) the transaction price is allocated to each performance obligation, and (v) when the performance obligations are satisfied. Currently, we derive all of our revenues from property leases. Property leases are

not

within the scope of ASC

606.

Property lease revenue is earned through annual leases for facilities used in agricultural/manufacturing activities and the Company records revenues on a straight-line basis over the term of these leases.  Property lease revenues from these sources are recurring on an annual basis.  Unearned property lease revenues were

$0

at both

September 30, 2020

and

2019.

The Company also receives a revenue participation fee which is considered a variable payment and thus is recorded in the period earned in accordance with ASC

842.

Advertising Expense

Advertising, promotional and selling expenses consist of sales and marketing expenses, and promotional activity expenses. Expenses are recognized when incurred.

General and Administrative Expense

General and administrative expenses consist of professional service fees, rent and utility expenses, meals, travel and entertainment expenses, and other general and administrative overhead costs. Expenses are recognized when incurred.

Loss per Share

We compute net loss per share in accordance with the ASC Topic

260.

The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.

Basic loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Shares issuable upon the exercise of equity instruments such as warrants and options were

not

included in the loss per share calculations for

2020

and

2019

because the inclusion would have been anti-dilutive.

Recently Adopted Accounting Pronouncements

In

February 2016,

the FASB issued ASU

No.

 

2016

-

02,

 Leases (Topic

842

) ("ASU

2016

-

02"

), which provides guidance requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for substantially all leases, with the exception of short-term leases. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the statement of income. The Company adopted Topic

842

effective

October 1, 2019 

and elected the package of transition practical expedients for expired or existing contracts, which does

not

require reassessment of: (

1

) whether any of the Company's contracts are or contain leases, (

2

) lease classification and (

3

) initial direct costs. In

July 2018,

the FASB issued ASU

No.

2018

-

11,

"Targeted Improvements - Leases (Topic

842

)." The Company did

not

elect the hindsight practical expedient. This update provides an optional transition method that allows entities to elect to apply the standard using the modified retrospective approach at its effective date, versus recasting the prior years presented. If this adoption method is elected, an entity would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption. The Company elected this adoption method on

October 1, 2019

and the adoption did

not

result in any cumulative impact to retained earnings.

Additionally, the Company's adoption of Topic

842

did

not

have a significant impact on the recognition, measurement or presentation of lease revenue and lease expenses within the consolidated statements of operations or the consolidated statements of cash flows. The Company's adoption of Topic

842

did

not

have a material impact on the timing or amount of the Company's lease revenue as a lessor in its sublease agreement.  The Company's prepaid land lease balance that was recorded in current and other assets in the Company's

September 30, 2019

balance sheet has been classified as a component of the Company's right-of-use assets effective

October 1, 2019.

The consolidated financial statements for the year ended

September 30, 2020

are presented under the new standard, while comparative years presented are

not

adjusted and continue to be reported in accordance with the Company's historical accounting policy. See Note

10,

Commitments and Contingencies, for more information. 

Recently Issued Accounting Pronouncements

In

August 

2020,

the FASB issued ASU

No.

 

2020

-

06,

“Debt—Debt with Conversion and Other Options (Subtopic

470

-

20

) and Derivatives and Hedging— Contracts in Entity's Own Equity (Subtopic

815

-

40

).” The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC

470

-

20,

“Debt: Debt with Conversion and Other Options,”, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC

470

-

20

applies to convertible instruments for which the embedded conversion features are

not

required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC

815

-

40

for freestanding financial instruments and embedded features that are both indexed to the issuer's own stock and classified in stockholders' equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore,

not

accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU

260,

“Earnings per Share,” to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument

may

be settled in cash or shares. The amendments in ASU

2020

-

06

are effective for fiscal years beginning after

December 

15,

2023,

with early adoption permitted. The Company is currently evaluating the timing of adoption and impact of the updated guidance on its financial statements.

In

December 2019,

the FASB issued ASU

2019

-

12

“Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes.” This guidance removes certain exceptions to the general principles in Topic

740

and provides consistent application of U.S. GAAP by clarifying and amending existing guidance. The effective date of the new guidance for public companies is for fiscal years beginning after

December 

15,

2020

and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of the updated guidance on its financial statements.

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Note 2 - Going Concern

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

NOTE 2. GOING CONCERN

The accompanying consolidated 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 a working capital deficit of

$232,158

as of

September 30, 2020,

an accumulated deficit of

$18,722,552

and

$18,013,209

at

September 30, 2020

and

2019,

respectively, and had a net loss of

$709,343

for the year ended

September 30, 2020.

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. 

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 consolidated financial statements do

not

include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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Note 3 - Cash and Cash Equivalents and Restricted Cash

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Cash and Cash Equivalents Disclosure [Text Block]

NOTE  3. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts in the consolidated statements of cash flows:

	September 30, 2020		September 30, 2019
Cash and cash equivalents	$	183,009	$	455,843
Restricted cash		10,150		836,219
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	193,159	$	1,292,062

Amounts included in restricted cash represent those required to be set aside by the Cannabis Control Commission in Massachusetts as well as by a contractual agreement with a lender for the payment of specific construction related expenditures as part of the Company's property development in Massachusetts.

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Note 4 - Notes Receivable

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

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

NOTE  4. NOTES RECEIVABLE

Notes and other receivables as of

September 30, 2020

and

2019,

consisted of the following: 

	September 30, 2020			September 30, 2019
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 and legal fees of $206,675, construction advances of $332,357 and accrued interest of $549,349 at September 30, 2019. Net of reserves of $1,761,675 as of September 30, 2019. Balance was collected in full in February 2020.	$	-		$	-
Related party note receivable from BASK, a non-profit corporation, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.		119,512			148,763
		119,512			148,763
Less: Current portion		(37,165	)		(32,270	)
	$	82,347		$	116,493

The notes and other receivables from WGP were fully reserved due to ongoing disputes between the Company and WGP. The Company filed a Demand for Arbitration against WGP on

April 7, 2017.

On

January 18, 2018,

the arbitration panel awarded the Company

$1,045,000

plus interest at the rate of

18%

per year from

April 18, 2015

to

March 18, 2018

for

$550,000.

In addition to the principal and interest awarded of

$1,595,000,

the Company was also awarded its attorneys' fees and arbitration fees. The Company reversed the previously recorded reserve on the receivable with WGP in the amount of

$1,761,675

since on

February 5, 2020

the Company received cash of

$2,069,138

from WGP as payment in full for the fully reserved notes and other receivables which include principal, interest, attorneys' fees and arbitration fees. 

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Note 5 - Notes Payable

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE  5. NOTES PAYABLE

Unrelated

On

August 25, 2020,

the Company borrowed

$153,000

from an unrelated party. The loan is unsecured, bears interest at a rate of

10%

and is due and payable on

August 25, 2021. 

The loan

may

not

be prepaid. After

October 29, 2019,

the Company

may

not

repay the loan without the consent of the lender. At any time after

February 21, 2021,

the full value of any unpaid principal is convertible into the Company's common stock at a variable conversion price. The conversion price is equal to: (a) if the market price is greater than or equal to

$1.10,

the greater of (

1

) the variable conversion price (defined as market price multiplied by

65

percent) and (

2

)

$0.72,

and (b) if the market price is less than

$1.10,

the lesser of (

1

) the variable conversion price and (

2

)

$0.72.

The Company incurred debt issuance costs of

$3,000

which was recorded as a debt discount.  Amortization expense related to the debt discount was

$250

during the year ended

September 30, 2020.

On

August 2, 2019

the Company secured a

$4,000,000

investment from an unrelated

third

party in the form of a loan. The loan was evidenced by a note which bears interest at the rate of

11%

per year, is due and payable on

August 2, 2022

and is secured by a

first

lien on Building

1

at the MCC.

The note holder also received a warrant which allows the holder to purchase

600,000

shares of the Company's common stock at a price of

$1.50

per share. The warrant will expire on the earlier of (i)

August 2, 2024

or (ii)

twenty

days after written notice of the holder that the daily Volume Weighted Average Price of the Company's common stock was at least

$4.00

for

twenty

consecutive trading days and the average daily volume of trades of the Company's common stock during the

twenty

trading days was at least

150,000

shares.

The broker for the loan received a cash commission of

$320,000

plus warrants to purchase

48,000

shares of the Company's common stock. The warrants are exercisable at a price of

$1.50

per share and expire on

August 2, 2024. 

The cash commission and the fair value of the warrants amounting to

$52,392

were recognized as a discount to the note.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the

600,000

warrants was

$562,762

which was recognized as additional paid in capital and a corresponding debt discount.

At

September 30, 2020,

the outstanding principal on this note was

$4,000,000

and the unamortized debt discount was

$571,483.

All debt discounts are being amortized on a straight-line basis over the terms of the note. Amortization expense related to the debt discounts was

$311,370

for the year ended

September 30, 2020.

December 2017

Convertible Note Offering 

On

December 29, 2017

the Company sold convertible notes in the principal amount of

$800,000

to a group of accredited investors. The notes bear interest at

8%

per year, are unsecured, and were due and payable on

December 31, 2018.

On

December 31, 2018,

the maturity date of the notes were extended to

December 31, 2019.

The notes were fully paid off in

January 2020.

The original notes included a provision to be converted at any time into shares of the Company's common stock at an initial conversion price of

$1.50

per share.

The note holders also received warrants which entitle the note holders to purchase up to

533,333

shares of the Company's common stock. The warrants are exercisable at a price of

$1.50

per share and expire on

October 17, 2022.

The placement agent for the offering received a cash commission of

$64,000,

plus warrants to purchase

106,667

shares of the Company's common stock. The warrants are exercisable at a price of

$1.50

per share and expire on

December 29, 2022.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the

640,000

warrants was

$607,024

which was recognized as additional paid in capital and a corresponding debt discount. After such allocation, the effective conversion price on the issuance date was less than the fair value of the stock into which the notes were convertible, giving rise to a beneficial conversion feature of

$128,976

which was recognized as additional paid in capital and a corresponding debt discount.

The

$64,000

paid to the placement agent was allocated on a pro-rata basis to the warrants and the debt which was recorded as an offset to additional paid in capital and an increase in debt discount of

$48,562

and

$15,438,

respectively.

During

February 2019,

a loan in the principal amount of

$30,000

was converted into

20,000

shares of common stock.

During

May 2018,

a loan in the principal amount of

$575,000

was converted into

383,333

shares of common stock. In addition, interest payable in the amount of

$15,233

was converted into

10,155

shares.

At

September 30, 2020

and

September 30, 2019,

the outstanding principal on these notes was

$0

and

$195,000,

respectively. All debt discounts are being recognized on a straight-line basis over the terms of the notes. Amortization expense related to the debt discounts were

$0

and

$51,749

for the years ended

September 30, 2020

and

2019,

respectively.

February 2018

Convertible Note Offering

On

February 12, 2018

the Company sold convertible notes in the principal amount of

$810,000

to a group of accredited investors. The notes bear interest at

8%

per year, are unsecured, and are due and payable on

December 31, 2018.

On

December 31, 2018,

the notes were extended to mature on

December 31, 2019.

At the option of the note holders, the notes

may

be converted at any time into shares of the Company's common stock at an initial conversion price of

$1.50

per share.

The note holders also received warrants which entitle the note holders to purchase up to

540,000

shares of the Company's common stock. The warrants are exercisable at a price of

$1.50

per share and expire on

October 17, 2022.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the

540,000

warrants was

$523,013

which was recognized as additional paid in capital and a corresponding debt discount. After such allocation, the effective conversion price on the issuance date was less than the fair value of the stock into which the note is convertible, giving rise to a beneficial conversion feature of

$286,987

which is recognized as additional paid in capital and a corresponding debt discount.

During

January 2019,

a loan in the amount of

$35,000

was repaid in cash.

In

October 2018,

a loan in the principal amount of

$45,000

was converted into

30,000

shares of common stock. In addition, interest payable in the amount of

$1,992

was converted into

1,328

shares.

During

July 2018,

loans in the principal amount of

$375,000

were converted into

250,000

shares of common stock. In addition, interest payable in the amount of

$14,704

was converted into

9,802

shares.

In

May 2019,

loans in the principal amount of

$150,000

were converted into

100,000

shares of common stock. In addition, interest payable in the amount of

$19,521

was converted into

13,014

shares.

In

April 2019,

loans in the amount of

$15,000

were converted to

10,000

shares of common stock.

A loan in the amount of

$40,000

was repaid in

January 2020. 

On

December 31, 2019,

the remaining outstanding note in the amount of

$150,000

was extended to mature on

December 31, 2020.

At

September 30, 2020

and

September 30, 2019,

the outstanding principal on these notes was

$150,000

and 

$

190,000,

respectively. All debt discounts are being recognized on a straight-line basis over the terms of the notes. Amortization expense related to the debt discounts were

$0

and

$87,001

for the years ended

September 30, 2020

and

2019,

respectively.

Related Party

SCP.

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

$1,756,646

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

second

note, in the principal amount of

$756,646,

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 but is secured by 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.

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 expired 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.

On

September 30, 2019,

both notes were amended and combined into

one

note, in the principal amount of

$1,756,646,

bearing interest of

9%

per year and maturing on

December 31, 2022.

Additionally, the conversion option in the

first

note was eliminated. The new note is secured by all amounts due from WGP or its affiliates. The note holders also received warrants to purchase

1,500,000

shares of the Company's common stock. The warrants are exercisable at a price of

$1.25

per share and expire on

December 31, 2022.

The debt modification was deemed substantial and was accounted for as a debt extinguishment. The fair value of the

1,500,000

warrants was

$977,110

and was recognized as loss on extinguishment of debt and the remaining unamortized premium and discount was written off during the year ended

September 30, 2019.

The Company made principal payments on the note of

$1,175,000

during the year ended

September 30, 2020.

Accrued interest on the note was

$26,246

and

$12,283

at

September 30, 2020

and

September 30, 2019,

respectively.

At

September 30, 2020,

the outstanding principal on this note was

$581,646,

and the unamortized debt premium was

$0.

Amortization of debt premium was

$0

and

$25,673

for the years ended

September 30, 2020

and

2019,

respectively.

During the year ended

September 30, 2020,

the Company also incurred

$180,000

of consulting expenses with SCP of which

$65,000

remains outstanding at

September 30, 2020.

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Note 6 - Related Party Transactions

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE  6. RELATED PARTY TRANSACTIONS

BASK

.

On

April 7, 2016,

we signed agreements with BASK. BASK is

one

of a limited number of organizations that has received a provisional or final registration to cultivate, process and sell medical and adult use cannabis by the Massachusetts Cannabis Control Commission.

Pursuant to the agreements, we agreed to provide BASK with financing for construction and working capital required for BASK's approved dispensary and cultivation center in Fairhaven, MA.

On

August 15, 2018,

the Company combined the construction and working capital advances of

$129,634

and accrued interest of

$44,517

and setup a new loan with payments over

5

years with

18%

interest. At

September 30, 2020

and

2019,

the outstanding balance on the note receivable was

$119,512

and

$148,763,

respectively.

On

July 26, 2019,

the Company entered into a

15

-Year Triple Net lease of Building

1

of the MCC with BASK. The lease commenced on

September 1, 2019

and includes an annual base rent of

$135,000

and a revenue participation fee equivalent to

15%

of BASK's gross revenues. As of

September 30, 2020,

the BASK tenant receivable balance was

$124,617.

Tim Keogh, our Chief Executive Officer, is a Board Member of BASK.

XML

Note 7 - Earnings Per Share

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE  7. EARNINGS PER SHARE

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

	Year Ended
	September 30,
	2020			2019
Net loss attributable to common stockholders	$	(709,343	)	$	(4,903,668	)
Basic weighted average outstanding shares of common stock		23,504,820			22,984,703
Dilutive effects of common share equivalents		-			-
Dilutive weighted average outstanding shares of common stock		23,504,820			22,984,703
Basic and diluted net loss per share of common stock	$	(0.03	)	$	(0.21	)

As of

September 30, 2020,

we have excluded

1,850,000

of stock options and

9,638,650

of warrants and

100,000

shares that would be issued from conversion of outstanding convertible notes from the computation of diluted net loss per share since the effects are anti-dilutive. As of

September 30, 2019,

we have excluded

750,000

of stock options

11,238,650

of warrants and

256,667

shares that would be issued from the conversion of outstanding convertible notes from the computation of diluted net loss per share since the effects are anti-dilutive.

XML

Note 8 - Income Taxes

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE  8. INCOME TAXES

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur. The Company accounts for income taxes pursuant to ASC Topic

740.

The Company has made an early adoption of ASU

2015

-

17

Balance Sheet Classification of Deferred Taxes.

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses and other items. Loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.

The components of the deferred income tax assets and liabilities arising under ASC Topic

740

were as follows:

	September 30,
	2020			2019
Deferred tax assets	$	2,838,966		$	2,438,893
Deferred tax liabilities		-			-
Valuation allowance		(2,838,966	)		(2,438,893	)
Net deferred tax assets/(liabilities)	$	-		$	-

The types of temporary differences between the tax basis of assets and their financial reporting amounts that give rise to a significant portion of the deferred assets and liabilities are as follows:

	Year Ended September 30,
	2020						2019
	Temporary Difference			Tax Effect			Temporary Difference			Tax Effect
Deferred tax assets
Net operating loss	$	709,343		$	174,144		$	4,903,668		$	1,209,245
Tax impact true up		-			20,927			-			-
Other temporary differences		835,040			205,002			(1,756,726	)		(433,209	)
Net deferred tax assets		1,544,383			400,073			3,146,942			776,036
Valuation allowance		(1,544,383	)		(400,073	)		(3,146,942	)		(776,036	)
Total deferred tax asset		-			-			-			-
Deferred tax liabilities
Total deferred liability		-			-			-			-
Total net deferred tax asset	$	-		$	-		$	-		$	-

Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.

At

September 30, 2020

and

September 30, 2019,

the Company had approximately and

$11,564,017

and

10,019,634

respectively, in unused federal net operating loss carryforwards, which will begin to expire principally in the year

2034.

A deferred tax asset at each date of approximately

$379,146

and

$776,036

resulting from the loss carryforwards and other temporary differences has been offset by a

100%

valuation allowance. The change in the valuation allowance for the period ended

September 30, 2020

and

September 30, 2019

was approximately $ (

400,073

) and $(

776,036

).

A reconciliation of the U.S. statutory federal income tax rate to the effective tax rate is as follows:

	September 30,
	2020			2019
U.S. Federal statutory graduated rate		21.00	%		21.00	%
State income tax rate, net of federal benefit		3.55	%		3.66	%
Total rate		24.55	%		24.66	%
Less: Net operating loss for which no benefit is currently available		(24.55	)%		(24.66	)%
Net effective rate		0.00	%		0.00	%

The Company's income tax filings are subject to audit by various taxing authorities. The Company's open audit periods are

September 30, 2017,

2018,

and

2019.

In evaluating the Company's provisions and accruals, future taxable income, and reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes its estimates are appropriate based on current facts and circumstances.

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Note 9 - Equity

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE  9. EQUITY

Preferred Stock

The Company has authorized

20,000,000

shares of

$.0001

par value preferred stock.

No

preferred shares were outstanding at

September 30, 2020

and

2019.

Common Stock

On

December 12, 2017,

the Company entered into an amended and restated equity line agreement with Mountain States Capital, LLC (MSC). Under the equity line agreement, MSC agreed to provide the Company with up to

$10,000,000

of funding through the purchase of shares of the Company's common stock.

During the term of the Agreement, the Company, at its sole discretion,

may

deliver a Put Notice to MSC, which will specify the dollar amount which the Company wants to draw down under the Equity Line. The amount the Company can draw down at any

one

time is the lesser of twice the average of the

10

-day average daily trading volume (computed by multiplying the volume weighted average price for each day by the number of shares traded for that day), or

$500,000.

A closing will occur on the date which is

no

earlier than

five

trading days following and

no

later than

seven

trading days following the applicable Put Notice. On each Closing Date, the Company will sell, and MSC will purchase, the shares of the Company's common stock specified in the Put Notice.

The amount to be paid by MSC on a particular Closing Date will be determined by dividing the dollar amount specified in the Put Notice by the Purchase Price. The Purchase Price is

90%

of the lowest daily volume weighted average price of the Company's common stock during the Pricing Period. The Pricing Period, with respect to a particular Put Notice, is

five

consecutive trading days including, and immediately following, the delivery of a Put Notice. However,

no

Put Notice

may

be delivered on a day that is

not

a Trading Day.

The equity line agreement expired on

August 14, 2019.

During the year ended

September 30, 2019,

the Company submitted Put Notices for a total of

715,981

shares for

$1,211,000

in cash.

During the year ended

September 30, 2019,

the Company converted debt and interest of

$261,513

into

174,342

shares of common stock.

During the year ended

September 30, 2019,

we issued

119,734

shares of stock for services valued

$154,998.

During the year ended

September 30, 2020,

we issued

191,490

shares of stock for services valued

$90,000.

During the year ended

September 30, 2019,

the Company issued

388,000

shares of common stock for total proceeds of

$475,500

from the exercise of warrants.

Stock Options

On

August 18, 2017,

our board of directors adopted a stock incentive plan (“the plan”) that provides for the grant of Incentive Stock Options, Non-Qualified Stock Options or Stock Bonuses to persons who are employees of the Company, employees of subsidiaries of the Company, directors, officers, and consultants. Under the plan, the Company

may

grant up to

1,500,000

options, each to purchase

one

share of common stock, subject to an exercise price and vesting schedule to be established by the board of directors at the time of the grant.

The fair value of the options granted during the years ended

September 30, 2020

and

2019

were established using the Black Scholes option pricing model using the following assumptions:

● Risk-free interest rate –  0.28%  to 1.55%

● Expected term – 4.8 to 5.0 years

● Volatility –  118%  to 142%

Options Issuances in

2020

On

September 30, 2020,

the Company awarded a total of

500,000

options to

two

executives at an exercise price of

$1.50

per share. The options vested immediately and can be exercised at any time on or before

September 30, 2025.

On

September 30, 2020,

the Company also awarded a total of

500,000

options to

two

executives at an exercise price of

$3.00

per share. The options vested immediately and can be exercised at any time on or before

September 30, 2025.

As these options were fully vested at grant date, the full value of

$301,770

was recognized immediately as stock based compensation expense and

no

further expense will be recognized associated with these awards.

Options Issuances in

2019

On

September 30, 2019,

the Company awarded a total of

600,000

options to

two

executives at an exercise price of

$1.50

per share. The options vested immediately and can be exercised at any time on or before

August 2, 2024.

As these options were fully vested at grant date, the full value of

$488,793

was recognized immediately as stock based compensation expense and

no

further expense will be recognized associated with these awards.

On

August 27, 2019,

the Company awarded a total of

300,000

options to an executive at an exercise price of

$1.50

per share. The options vest over a period of

2.5

years and can be exercised any time on or before

August, 27, 2024.

 The following table shows the stock option activity for the years ended

September 30, 2020

and

2019:

 

						Weighted
				Weighted		Average
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(Years)		Value
Outstanding as of September 30, 2018		150,000		$	2.21		2.9	$	-
Granted		900,000			1.50		4.8		-
Outstanding as of September 30, 2019		1,050,000		$	1.64		4.4	$	-
Granted		1,000,000		$	2.25		5.0	$	-
Forfeited		(200,000	)	$	1.50
Outstanding as of September 30, 2020		1,850,000		$	1.99		4.2	$	-
Vested and expected to vest at September 30, 2020		1,850,000		$	1.99		4.2	$	-
Exercisable at September 30, 2020		1,850,000		$	1.99		4.2

Stock based compensation expense related to the options was

$471,971

and

$578,790

for the years ended

September 30, 2020

and

2019,

respectively. At

September 30, 2020,

unrecognized stock-based compensation associated with stock options amounted to

$0.

During the years ended

September 30, 2020

and

2019,

we received proceeds of

$0

from stock option exercises.

Warrants

Warrant Issuances in

2020

The Company did

not

issue any warrants during the year ended

September 30, 2020.

Warrant Issuances in

2019

As disclosed in Notes

5

and

10,

the Company issued warrants to purchase up to

600,000

shares of common stock at an exercise price of

$1.50

per share and expire on

August 2, 2024.

The fair value of the warrants was determined using the Black-Scholes option pricing model.

In

August 2019,

as part of the Company's

$4,000,000

financing, the Company issued warrants to purchase

48,000

shares of the Company's stock to the placement agent as commission. The warrants are exercisable at a price of

$1.50

per share and expire on

August 2, 2024.

In

September 2010,

as part of the Company's debt modification, the Company issued warrants to purchase up to

1,500,000

shares of the Company's stock to the noteholder. The warrants are exercisable at a price of

$1.25

per share and expire on

December 31, 2022.

The fair value of the warrants issued in

2019

was determined using the Black-Scholes option pricing model using the following assumptions:

●  Expected term – 3.25 to 5 years

●  Volatility – 119% to 144%

●  Risk-free rate – 1.56% to 1.67%

●  Stock price - $0.95  to $1.23

●  Expected dividends – $0

The following table shows the warrant activity for the years ended

September 30, 2020

and

2019:

 

						Weighted
				Weighted		Average
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(Years)		Value
Outstanding as of September 30, 2018		9,478,650		$	1.55	$	2.6	$	-
Granted		2,148,000			1.33		-
Exercised		(388,000	)		1.23
Outstanding as of September 30, 2019		11,238,650			1.52		2.30	$	-
Expired		(1,600,000	)		2.25			$
Outstanding as of September 30, 2020		9,638,650			1.39		1.80		-
Exercisable at September 30, 2020		9,638,650			1.39		1.50	$	-

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Note 10 - Commitments and Contingencies

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE  10. COMMITMENTS AND CONTINGENCIES

MCC.

  On

January 14, 2015,

we entered into an agreement to purchase a

52.6

acre parcel of undeveloped land in Freetown, Massachusetts. The property is located approximately

47

miles southeast of Boston. We are developing the property as the MCC. Plans for the

may

include the construction of sustainable greenhouse cultivation and processing facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program. We paid the seller

$100,000

upon the signing of the agreement which amount will be applied toward the purchase price at the closing.

Between

August 2015

and

September 2016,

there were several amendments to the Agreement to extend the closing date to

October 14, 2016.

As consideration for the extensions, the Company, at closing, agreed to increase the purchase price to

$4,325,000

and paid the seller

$725,000,

which was be applied to the purchase price of the land if and when the Company closes on this transaction. As of

September 30, 2016,

the Company had paid

$925,000

that was to be applied to the purchase price of the land at closing. On

October 17, 2016,

the Company closed on the land purchase via a sales-leaseback transaction. See ‘Operating Leases' section below for additional information.

Operating Leases

 

Land

On

October 17, 2016,

the Company closed the acquisition of the

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. In

August 2019,

the Company completed construction of Building

1

at MCC.

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.

Effective

October 1, 2019,

the Company adopted Topic

842

and recorded ROU assets and lease liabilities of

$6,980,957

and

$4,256,869,

respectively. As part of the adoption, prepaid land lease balance of

$2,724,088

was classified as a component of the Company's ROU assets.

The Company constructed Building

1

on the leased land and on

September 1, 2019,

BASK, commenced its

15

-year sublease of Building

1

which includes a base rent plus

15%

of BASK's gross revenues. This sublease income is recorded as Rental income - related party on the Company's consolidated statements of operations.

As of

September 30, 2020,

the Company's right-of-use assets were

$6,914,080,

the Company's current maturities of operating lease liabilities were

$4,728,

and the Company's noncurrent lease liabilities were

$4,243,224.

During the year ended

September 30, 2020,

the Company had operating cash flows from operating leases of

$256,125.

The table below presents lease related terms and discount rates as of

September 30, 2020.

	As of September 30, 2020
Weighted average remaining lease term
Operating leases		46
Weighted average discount rate
Operating leases		7.9	%

 The reconciliation of the maturities of the operating leases to the lease liabilities recorded in the Consolidated Balance Sheet as of

September 30, 2020

are as follows:

2021		341,500
2022		341,500
2023		341,500
2024		341,500
2025		341,500
Thereafter		14,001,500
Total lease payments		15,709,000
Less: Interest		(11,461,048	)
	$	4,247,952
Less: operating lease liability, current portion		(4,728	)
Operating lease liability, long term	$	4,243,224

Office space

The Company leases its office space located at

1555

Blake St., Unit

502,

Denver, CO

80202

for

$2,500

per month with a lease term of less than

12

months.

Lease expense for office space was

$18,303

and

$15,055

for the years ended

September 30, 2020

and

2019,

respectively.

Aggregate rental expense under all leases totaled

$401,021

and

$410,162

for the years ended

September 30, 2020

and

2019,

respectively.

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Note 11 - Subseqent Events

12 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE  11. SUBSEQENT EVENTS

On

October 12, 2020,

an outstanding convertible note in the amount of

$150,000

originally due on

December 31, 2020

was extended to mature on

December 31, 2021.

All accrued interest is to be paid by

December 31, 2020.

On

December 4, 2020,

the outstanding

$4,000,000

loan due to an unrelated party was increased by

$500,000

and the maturity date of the loan was extended to

August 1, 2023.

All other provisions of the original

$4,000,000

loan remain the same. The proceeds of this loan will be used to develop Building

2

at the Company's Massachusetts Cannabis Center.

XML

Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements include the accounts of AmeriCann, Inc. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant estimates and assumptions made by management are valuation of equity instruments, deferred tax asset valuation and allowance and collectability of long-lived assets. Actual results could differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.  

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, demand deposit accounts and temporary cash investments with maturities of

ninety

days or less at the date of purchase.

Income Tax, Policy [Policy Text Block]

Income Taxes

In accordance with ASC Topic

740,

Income Taxes, the provision for income taxes is computed using the asset and liability method. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the consolidated balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the consolidated financial statements.  The resulting deferred tax assets or liabilities have been adjusted to reflect changes in tax laws as they occur.  A valuation allowance is provided when it is more likely than

not

that a deferred tax asset will

not

be realized.

We expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-

not"

threshold, the amount to be recognized in the consolidated financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions

not

meeting the threshold,

no

financial statement benefit is recognized. As of

September 30, 2020

and

2019,

we had

no

uncertain tax positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We currently have

no

federal or state tax examinations nor have we had any federal or state examinations since our inception. To date, we have

not

incurred any interest or tax penalties.

For federal tax purposes, our

2017

through

2019

tax years remain open for examination by the tax authorities under the normal

three

-year statute of limitations.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risks and Significant Customers

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, notes receivable, deposits tenant receviables and notes receivable. We place our cash with high credit quality financial institutions. As of

September 30, 2020,

we had outstanding notes receivable of

$119,512

and tenant receivables of

$124,617

with BASK, Inc. ("BASK"), a related party. As of

September 30, 2019,

we had outstanding notes receivables of

$148,763

with BASK and a note and a receivable in the amount of

$1,761,675

with WGP (exclusive of provision for doubtful accounts of

$1,761,675

).  Balance due from Wellness Group Pharms ("WGP") was collected in full in

February 2020.

For the year ended

September 30, 2020,

all of the Company's revenue was earned from

one

customer, BASK. As of

September 30, 2020,

the BASK tenant receivable balance was

$124,617.

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

Financial Instruments and Fair Value of Financial Instruments

We adopted ASC Topic

820,

Fair Value Measurement, for assets and liabilities measured at fair value on a recurring basis. ASC Topic

820

establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure of fair value measurements. 

ASC Topic

820

defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic

820

requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level  1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level  2:	Observable market-based inputs or unobservable inputs that are corroborated by market data
Level  3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions.

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. We had

no

financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. We had

no

financial assets or liabilities carried and measured on a recurring basis during the reporting periods. The carrying value of short-term financial instruments, including cash and cash equivalents, tenant and notes receivable, accounts payable and accrued expenses, and short-term borrowings approximate fair value due to the relatively short period to maturity for these instruments. The long-term borrowings approximate fair value since the related rates of interest approximates current market rates.

Derivatives, Policy [Policy Text Block]

Derivative Liabilities

We evaluate stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic

815

-

40,

Derivative Instruments and Hedging: Contracts in Entity's Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each consolidated balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic

815

-

40

are reclassified to a liability account at the fair value of the instrument on the reclassification date. We determined that

none

of our financial instruments meet the criteria for derivative accounting as of

September 30, 2020

and

2019.

Lessee, Leases [Policy Text Block]

Operating leases

Effective

October 1, 2019,

we adopted Topic

842

using the effective date method. Under this method, periods prior to adoption remain unchanged. We determine if an arrangement is a lease at inception.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are

not

included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms

may

include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting us to

not

apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of

12

months or less).

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Long-Lived Assets

Our long-lived assets consisted of property, plant and equipment and are reviewed for impairment in accordance with the guidance of the Topic ASC Topic

360,

Property, Plant, and Equipment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset

may

not

be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and

third

-party independent appraisals, as considered necessary. There were

no

 impairment losses recognized for the years ended

September 30, 2020

and

2019.

Property, Plant and Equipment, Policy [Policy Text Block]

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment begins in the month following the month when the asset is placed into service and is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from

three

to

twenty

years. Property,  plant and equipment consist of:

	September 30, 2020			September 30, 2019
Buildings and improvements	$	7,608,087		$	7,221,600
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		7,960,427			7,573,940
Accumulated depreciation		(448,006	)		(1,152	)
Property, plant and equipment, net	$	7,512,421		$	7,572,788

Depreciation expense for the years ended

September 30, 2020

and

2019

amounted to

$446,854

and

$1,152,

respectively.

Commissions Expense, Policy [Policy Text Block]

Equity Instruments Issued to Non-Employees for Acquiring Goods or Services

Effective

October 1, 2019,

the Compnay adopted ASU

2018

-

07,

Compensation – “Stock Compensation (Topic

718

): Improvements to Nonemployee Share-based Payment Accounting”, which addresses aspects of the accounting for nonemployee share-based payment transactions. Upon adoption, all of the issuances of stock to non-employees for goods and services are treated in the same matter as share based awards to employees.  The adoption did

not

have an impact on the Company's financial statements.

Business Combinations and Other Purchase of Business Transactions, Policy [Policy Text Block]

Non-Cash Equity Transactions

Shares of equity instruments issued for noncash consideration are recorded at the estimated fair market value of the consideration granted based on the estimated fair market value of the equity instrument, or at the estimated fair market value of the goods or services received, whichever is more readily determinable.

Compensation Related Costs, Policy [Policy Text Block]

Stock-Based Compensation

The Company accounts for share-based awards to employees in accordance with ASC Topic

718,

Stock Compensation Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Effective

October 1, 2019,

the Company adopted ASU

2018

-

07,

Compensation – “Stock Compensation (Topic

718

): Improvements to Nonemployee Share-based Payment Accounting”, which addresses aspects of the accounting for nonemployee share-based payment transactions.

Collaborative Arrangement, Accounting Policy [Policy Text Block]

Related Parties

A party is considered to be related to us if the party directly or indirectly or through

one

or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we

may

deal if

one

party controls or can significantly influence the management or operating policies of the other to an extent that

one

of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in

one

of the transacting parties and can significantly influence the other to an extent that

one

or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.

Revenue [Policy Text Block]

Revenue Recognition

Effective

October 1, 2018,

we adopted ASU

2014

-

09,

Revenue from Contracts with Customers (Topic

606

). Under the new standard, we recognize revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists, (ii) identifiable performance obligations under the contract exist, (iii) the transaction price is determinable for each performance obligation, (iv) the transaction price is allocated to each performance obligation, and (v) when the performance obligations are satisfied. Currently, we derive all of our revenues from property leases. Property leases are

not

within the scope of ASC

606.

Property lease revenue is earned through annual leases for facilities used in agricultural/manufacturing activities and the Company records revenues on a straight-line basis over the term of these leases.  Property lease revenues from these sources are recurring on an annual basis.  Unearned property lease revenues were

$0

at both

September 30, 2020

and

2019.

The Company also receives a revenue participation fee which is considered a variable payment and thus is recorded in the period earned in accordance with ASC

842.

Advertising Cost [Policy Text Block]

Advertising Expense

Advertising, promotional and selling expenses consist of sales and marketing expenses, and promotional activity expenses. Expenses are recognized when incurred.

Selling, General and Administrative Expenses, Policy [Policy Text Block]

General and Administrative Expense

General and administrative expenses consist of professional service fees, rent and utility expenses, meals, travel and entertainment expenses, and other general and administrative overhead costs. Expenses are recognized when incurred.

Earnings Per Share, Policy [Policy Text Block]

Loss per Share

We compute net loss per share in accordance with the ASC Topic

260.

The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.

Basic loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Shares issuable upon the exercise of equity instruments such as warrants and options were

not

included in the loss per share calculations for

2020

and

2019

because the inclusion would have been anti-dilutive.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Pronouncements

In

February 2016,

the FASB issued ASU

No.

 

2016

-

02,

 Leases (Topic

842

) ("ASU

2016

-

02"

), which provides guidance requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for substantially all leases, with the exception of short-term leases. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the statement of income. The Company adopted Topic

842

effective

October 1, 2019 

and elected the package of transition practical expedients for expired or existing contracts, which does

not

require reassessment of: (

1

) whether any of the Company's contracts are or contain leases, (

2

) lease classification and (

3

) initial direct costs. In

July 2018,

the FASB issued ASU

No.

2018

-

11,

"Targeted Improvements - Leases (Topic

842

)." The Company did

not

elect the hindsight practical expedient. This update provides an optional transition method that allows entities to elect to apply the standard using the modified retrospective approach at its effective date, versus recasting the prior years presented. If this adoption method is elected, an entity would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption. The Company elected this adoption method on

October 1, 2019

and the adoption did

not

result in any cumulative impact to retained earnings.

Additionally, the Company's adoption of Topic

842

did

not

have a significant impact on the recognition, measurement or presentation of lease revenue and lease expenses within the consolidated statements of operations or the consolidated statements of cash flows. The Company's adoption of Topic

842

did

not

have a material impact on the timing or amount of the Company's lease revenue as a lessor in its sublease agreement.  The Company's prepaid land lease balance that was recorded in current and other assets in the Company's

September 30, 2019

balance sheet has been classified as a component of the Company's right-of-use assets effective

October 1, 2019.

The consolidated financial statements for the year ended

September 30, 2020

are presented under the new standard, while comparative years presented are

not

adjusted and continue to be reported in accordance with the Company's historical accounting policy. See Note

10,

Commitments and Contingencies, for more information. 

Recently Issued Accounting Pronouncements

In

August 

2020,

the FASB issued ASU

No.

 

2020

-

06,

“Debt—Debt with Conversion and Other Options (Subtopic

470

-

20

) and Derivatives and Hedging— Contracts in Entity's Own Equity (Subtopic

815

-

40

).” The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC

470

-

20,

“Debt: Debt with Conversion and Other Options,”, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC

470

-

20

applies to convertible instruments for which the embedded conversion features are

not

required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC

815

-

40

for freestanding financial instruments and embedded features that are both indexed to the issuer's own stock and classified in stockholders' equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore,

not

accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU

260,

“Earnings per Share,” to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument

may

be settled in cash or shares. The amendments in ASU

2020

-

06

are effective for fiscal years beginning after

December 

15,

2023,

with early adoption permitted. The Company is currently evaluating the timing of adoption and impact of the updated guidance on its financial statements.

In

December 2019,

the FASB issued ASU

2019

-

12

“Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes.” This guidance removes certain exceptions to the general principles in Topic

740

and provides consistent application of U.S. GAAP by clarifying and amending existing guidance. The effective date of the new guidance for public companies is for fiscal years beginning after

December 

15,

2020

and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of the updated guidance on its financial statements.

XML

Note 1 - Description of Business and Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2020

Notes Tables

Property, Plant and Equipment [Table Text Block]

	September 30, 2020			September 30, 2019
Buildings and improvements	$	7,608,087		$	7,221,600
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		7,960,427			7,573,940
Accumulated depreciation		(448,006	)		(1,152	)
Property, plant and equipment, net	$	7,512,421		$	7,572,788

XML

Note 3 - Cash and Cash Equivalents and Restricted Cash (Tables)

12 Months Ended

Sep. 30, 2020

Notes Tables

Reconciliation of Cash, Cash Equivalents and Restricted Cash [Table Text Block]

	September 30, 2020		September 30, 2019
Cash and cash equivalents	$	183,009	$	455,843
Restricted cash		10,150		836,219
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	193,159	$	1,292,062

XML

Note 4 - Notes Receivable (Tables)

12 Months Ended

Sep. 30, 2020

Notes Tables

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

	September 30, 2020			September 30, 2019
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 and legal fees of $206,675, construction advances of $332,357 and accrued interest of $549,349 at September 30, 2019. Net of reserves of $1,761,675 as of September 30, 2019. Balance was collected in full in February 2020.	$	-		$	-
Related party note receivable from BASK, a non-profit corporation, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.		119,512			148,763
		119,512			148,763
Less: Current portion		(37,165	)		(32,270	)
	$	82,347		$	116,493

XML

Note 7 - Earnings Per Share (Tables)

12 Months Ended

Sep. 30, 2020

Notes Tables

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

	Year Ended
	September 30,
	2020			2019
Net loss attributable to common stockholders	$	(709,343	)	$	(4,903,668	)
Basic weighted average outstanding shares of common stock		23,504,820			22,984,703
Dilutive effects of common share equivalents		-			-
Dilutive weighted average outstanding shares of common stock		23,504,820			22,984,703
Basic and diluted net loss per share of common stock	$	(0.03	)	$	(0.21	)

XML

Note 8 - Income Taxes (Tables)

12 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	September 30,
	2020			2019
Deferred tax assets	$	2,838,966		$	2,438,893
Deferred tax liabilities		-			-
Valuation allowance		(2,838,966	)		(2,438,893	)
Net deferred tax assets/(liabilities)	$	-		$	-

Schedule of Temporary Differences of Deferred Tax Assets and Liabilities [Table Text Block]

	Year Ended September 30,
	2020						2019
	Temporary Difference			Tax Effect			Temporary Difference			Tax Effect
Deferred tax assets
Net operating loss	$	709,343		$	174,144		$	4,903,668		$	1,209,245
Tax impact true up		-			20,927			-			-
Other temporary differences		835,040			205,002			(1,756,726	)		(433,209	)
Net deferred tax assets		1,544,383			400,073			3,146,942			776,036
Valuation allowance		(1,544,383	)		(400,073	)		(3,146,942	)		(776,036	)
Total deferred tax asset		-			-			-			-
Deferred tax liabilities
Total deferred liability		-			-			-			-
Total net deferred tax asset	$	-		$	-		$	-		$	-

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	September 30,
	2020			2019
U.S. Federal statutory graduated rate		21.00	%		21.00	%
State income tax rate, net of federal benefit		3.55	%		3.66	%
Total rate		24.55	%		24.66	%
Less: Net operating loss for which no benefit is currently available		(24.55	)%		(24.66	)%
Net effective rate		0.00	%		0.00	%

XML

Note 9 - Equity (Tables)

12 Months Ended

Sep. 30, 2020

Notes Tables

Share-based Payment Arrangement, Option, Activity [Table Text Block]

						Weighted
				Weighted		Average
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(Years)		Value
Outstanding as of September 30, 2018		150,000		$	2.21		2.9	$	-
Granted		900,000			1.50		4.8		-
Outstanding as of September 30, 2019		1,050,000		$	1.64		4.4	$	-
Granted		1,000,000		$	2.25		5.0	$	-
Forfeited		(200,000	)	$	1.50
Outstanding as of September 30, 2020		1,850,000		$	1.99		4.2	$	-
Vested and expected to vest at September 30, 2020		1,850,000		$	1.99		4.2	$	-
Exercisable at September 30, 2020		1,850,000		$	1.99		4.2

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 as of September 30, 2018		9,478,650		$	1.55	$	2.6	$	-
Granted		2,148,000			1.33		-
Exercised		(388,000	)		1.23
Outstanding as of September 30, 2019		11,238,650			1.52		2.30	$	-
Expired		(1,600,000	)		2.25			$
Outstanding as of September 30, 2020		9,638,650			1.39		1.80		-
Exercisable at September 30, 2020		9,638,650			1.39		1.50	$	-

XML

Note 10 - Commitments and Contingencies (Tables)

12 Months Ended

Sep. 30, 2020

Notes Tables

Lease Related Terms and Discount Rates [Table Text Block]

	As of September 30, 2020
Weighted average remaining lease term
Operating leases		46
Weighted average discount rate
Operating leases		7.9	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

2021		341,500
2022		341,500
2023		341,500
2024		341,500
2025		341,500
Thereafter		14,001,500
Total lease payments		15,709,000
Less: Interest		(11,461,048	)
	$	4,247,952
Less: operating lease liability, current portion		(4,728	)
Operating lease liability, long term	$	4,243,224

XML

Note 1 - Description of Business and Significant Accounting Policies (Details Textual)	12 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jan. 17, 2014
Ownership Percentage, Transfered			93.00%
Unrecognized Tax Benefits, Ending Balance	$ 0	$ 0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total	0
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Total	0	0
Tenant Receivable, Current	124,617	11,564
Impairment of Long-Lived Assets to be Disposed of	0	0
Depreciation, Total	446,854	1,152
Property Lease, Unearned Revenue	$ 0	0
Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	3 years
Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	20 years
Fair Value, Nonrecurring [Member]
Assets, Fair Value Disclosure	$ 0	0
Fair Value, Recurring [Member]
Assets, Fair Value Disclosure	$ 0	0
Customer Concentration Risk [Member] | Revenue Benchmark [Member]
Number of Major Customers	1
Wellness Group Pharms LLC [Member]
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Total		1,761,675
Financing Receivable, Allowance for Credit Loss, Ending Balance		1,761,675
BASK [Member]
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Total	$ 119,512	$ 148,763
Tenant Receivable, Current	$ 124,617
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member]
Open Tax Year	2018 2019 2020

XML

Note 1 - Description of Business and Significant Accounting Policies - Property, Plant and Equipment, Net (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Property, plant and equipment, gross	$ 7,960,427	$ 7,573,940
Accumulated depreciation	(448,006)	(1,152)
Property, plant and equipment, net	7,512,421	7,572,788
Building and Building Improvements [Member]
Property, plant and equipment, gross	7,608,087	7,221,600
Computer Equipment [Member]
Property, plant and equipment, gross	349,576	349,576
Furniture and Equipment [Member]
Property, plant and equipment, gross	$ 2,764	$ 2,764

XML

Note 2 - Going Concern (Details Textual) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Working Capital (Deficit)	$ (232,158)
Retained Earnings (Accumulated Deficit), Ending Balance	(18,722,552)	$ (18,013,209)
Net Income (Loss) Attributable to Parent, Total	$ (709,343)	$ (4,903,668)

XML

Note 3 - Cash and Cash Equivalents and Restricted Cash - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Cash and cash equivalents	$ 183,009	$ 455,843
Restricted cash	10,150	836,219
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$ 193,159	$ 1,292,062	$ 4,016,949

XML

Note 4 - Notes Receivable (Details Textual) - USD ($)			3 Months Ended	12 Months Ended
	Feb. 05, 2020	Jan. 18, 2018	Dec. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Accounts Receivable, Credit Loss Expense (Reversal)			$ (1,761,675)	$ (1,761,675)	$ 783,905
Proceeds from Collection of Notes Receivable				$ 29,251	$ 28,001
Wellness Group Pharms LLC [Member]
Proceeds from Collection of Notes Receivable	$ 2,069,138
Demand for Arbitration against WGP [Member]
Litigation Settlement, Amount Awarded from Other Party		$ 1,045,000
Litigation Settlement, Amount Awarded Receivable from Other Party, Interest Rate		18.00%
Litigation Settlement Interest		$ (550,000)
Litigation Settlement, Amount Awarded from Other Party, Including Interest		$ 1,595,000

XML

Note 4 - Notes Receivable - Schedule of Notes Receivable (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019	Aug. 15, 2018
Notes and Other Receivables, Net	$ 119,512	$ 148,763
Less: Current portion	(37,165)	(32,270)
Notes Receivable, Related Parties, Noncurrent	82,347	116,493
BASK [Member]
Notes Receivable, Related Parties	119,512	148,763	$ 129,634
Wellness Group Pharms LLC [Member]
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 and legal fees of $206,675, construction advances of $332,357 and accrued interest of $549,349 at September 30, 2019. Net of reserves of $1,761,675 as of September 30, 2019. Balance was collected in full in February 2020.

XML

Note 4 - Notes Receivable - Schedule of Notes Receivable (Details) (Parentheticals) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Aug. 15, 2018
Notes and other receivables, allowance		$ 1,761,675
BASK [Member]
Interest rate	18.00%	18.00%	18.00%
Periodic payment	$ 4,422	$ 4,422
Wellness Group Pharms LLC [Member]
Secured note		$ 673,294
Interest rate		18.00%
Accrued consulting fees		$ 206,675
Construction advances		332,357
Accrued interest		549,349
Notes and other receivables, allowance		$ 1,761,675

XML

Note 5 - Notes Payable (Details Textual) - USD ($)						1 Months Ended								12 Months Ended
	Aug. 25, 2020	Aug. 02, 2019	Feb. 12, 2018	Dec. 29, 2017	Jul. 14, 2016	Jan. 31, 2020	May 31, 2019	Apr. 30, 2019	Feb. 28, 2019	Jan. 31, 2019	Oct. 31, 2018	Jul. 31, 2018	May 31, 2018	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Sep. 30, 2018	May 01, 2016	Feb. 01, 2016	Sep. 30, 2010
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)														$ 1.39	$ 1.52		$ 1.55
Notes Payable, Noncurrent, Total														$ 3,578,517	$ 3,117,397
Amortization of Debt Discount (Premium)														311,370	171,628
Adjustments to Additional Paid in Capital, Warrant Issued															977,110
Debt Conversion, Original Debt, Amount															$ 261,513
Debt Conversion, Converted Instrument, Shares Issued (in shares)															174,342
Notes Payable, Current, Total														150,250	$ 385,000
Gain (Loss) on Extinguishment of Debt, Total															(977,110)
Interest Payable, Related Party, Current														26,246	12,283
Notes Amendment [Member]
Gain (Loss) on Extinguishment of Debt, Total															977,110
Conversion from December 2017 Convertible Notes to Common Stock [Member]
Debt Conversion, Original Debt, Amount									$ 30,000				$ 575,000
Debt Conversion, Converted Instrument, Shares Issued (in shares)									20,000				383,333
Debt Conversion, Accrued Interest													$ 15,233
Debt Conversion, Converted Interest payable, Shares Issued (in shares)													10,155
February 2018 Convertible Notes, Loan Principal Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount							$ 150,000				$ 45,000
Debt Conversion, Converted Instrument, Shares Issued (in shares)							100,000				30,000	250,000
February 2018 Convertible Notes, Interest Payable Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount							$ 19,521				$ 1,992	$ 14,704
Debt Conversion, Converted Instrument, Shares Issued (in shares)							13,014				1,328	9,802
February 2018 Convertible Notes, Loan Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount								$ 15,000
Debt Conversion, Converted Instrument, Shares Issued (in shares)								10,000
December 2017 Convertible Notes [Member] | GVC Capital LLC [Member]
Payments of Debt Issuance Costs				$ 64,000
Debt Instrument, Unamortized Discount, Total				15,438
Adjustments to Additional Paid in Capital, Warrant Issued				$ 48,562
Unrelated Party [Member] | Promissory Notes [Member]
Average Closing Price per Share (in dollars per share)		$ 4
Average Daily Volume Of Shares Trades (in shares)		150,000
Payments of Debt Issuance Costs		$ 320,000
Strategic Capital Partners [Member]
Debt Instrument, Convertible, Conversion Price (in dollars per share)					$ 1.25
Debt Conversion, Converted Instrument, Shares Issued (in shares)					400,000
Line of Credit Outstanding Amount Assumed by Related Party					$ 521,297
Notes Payable, Related Parties					2,431,646										1,756,646
Debt Instrument, Unamortized Premium, Total					72,651
Strategic Capital Partners [Member] | Consulting Services [Member]
Related Party Transaction, Amounts of Transaction														180,000
Due to Related Parties, Total														65,000
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					$ 1,756,646
Strategic Capital Partners [Member] | Promissory Notes [Member]
Debt Instrument, Unamortized Discount, Total														0
Amortization of Debt Discount (Premium)														0	25,673
Notes Payable, Related Parties														581,646
Repayments of Long-term Debt, Total														1,175,000
Interest Payable, Related Party, Current														26,246	$ 12,283
Strategic Capital Partners [Member] | Promissory Note One [Member]
Debt Instrument, Interest Rate, Stated Percentage					9.50%
Debt Instrument, Convertible, Conversion Price (in dollars per share)					$ 1.25
Notes Payable, Related Parties					$ 1,000,000
Strategic Capital Partners [Member] | Promissory Note Two [Member]
Debt Instrument, Interest Rate, Stated Percentage					8.00%										9.00%
Notes Payable, Related Parties					$ 756,646
Warrants Issued to Unrelated Parties Lenders [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)		600,000																		1,500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)		$ 1.50
Warrants Issued to Unrelated Parties Lenders [Member] | Promissory Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)		600,000
Warrants and Rights Outstanding		$ 562,762
Warrants to Purchase Additional Shares [Member]
Debt Instrument, Convertible, Conversion Price (in dollars per share)		$ 1.50
Warrants to Purchase Additional Shares [Member] | Strategic Capital Partners [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)					800,000										600,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)					$ 3
Warrants Issued to Placement Agent [Member] | Promissory Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)		48,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)		$ 1.50
Warrants Issued to Placement Agent [Member] | December 2017 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				106,667
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 1.50
Warrants Issued to Accredited Investors [Member] | December 2017 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				533,333
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 1.50
Warrants Issued to Accredited Investors [Member] | February 2018 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)			540,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)			$ 1.50
Warrants Issued to Accredited Investors and Placement Agent [Member] | December 2017 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				640,000
February 2018 Convertible Notes, Loan Principal Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount												$ 375,000
Warrant to Related Party, Set 1 [Member] | Strategic Capital Partners [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)					800,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)					$ 1.50
Warrants Issued for Notes Amendment [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)															1,500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)															$ 1.25					$ 1.25
Unrelated Party [Member]
Proceeds from Issuance of Long-term Debt, Total	$ 153,000	$ 4,000,000
Debt Instrument, Interest Rate, Stated Percentage	10.00%	11.00%
Debt Instrument, Convertible, Beneficial Conversion Feature	$ 3,000
Amortization of Debt Issuance Costs and Discounts, Total														250
Debt Instrument, Face Amount		$ 4,000,000
Line of Credit Facility, Current Borrowing Capacity																		$ 1,000,000	$ 200,000
Unrelated Party [Member] | Construction Loans [Member]
Proceeds from Issuance of Long-term Debt, Total				$ 800,000
Debt Instrument, Interest Rate, Stated Percentage				8.00%
Debt Instrument, Convertible, Conversion Price (in dollars per share)				$ 1.50
Unrelated Party [Member] | Promissory Notes [Member]
Debt Instrument, Unamortized Discount, Total		$ 52,392												571,483
Notes Payable, Noncurrent, Total														4,000,000
Amortization of Debt Discount (Premium)														311,370
Unrelated Party [Member] | Market Price is Greater Than or Equal to 1.10 [Member]
Debt Instrument, Convertible, Variable Conversion Price, Percentage of Market Price	65.00%
Debt Instrument, Convertible, Conversion Price (in dollars per share)	$ 0.72
Unrelated Party [Member] | Market Price is Less Than 1.510 [Member]
Debt Instrument, Convertible, Conversion Price (in dollars per share)	$ 0.72
Accredited Investors [Member] | December 2017 Convertible Notes [Member] | Convertible Debt [Member]
Debt Instrument, Convertible, Beneficial Conversion Feature				$ 128,976
Debt Instrument, Unamortized Discount, Total				$ 607,024
Amortization of Debt Discount (Premium)														0	$ 51,749
Notes Payable, Current, Total														0	195,000
Accredited Investors [Member] | February 2018 Convertible Notes [Member] | Convertible Debt [Member]
Debt Instrument, Interest Rate, Stated Percentage			8.00%
Debt Instrument, Convertible, Conversion Price (in dollars per share)			$ 1.50
Debt Instrument, Convertible, Beneficial Conversion Feature			$ 286,987
Debt Instrument, Unamortized Discount, Total			523,013
Amortization of Debt Discount (Premium)														0	87,001
Notes Payable, Current, Total														$ 150,000	$ 190,000	$ 150,000
Debt Instrument, Face Amount			$ 810,000
Repayments of Convertible Debt						$ 40,000				$ 35,000

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Note 6 - Related Party Transactions (Details Textual) - USD ($)	Jul. 26, 2019	Aug. 15, 2018	Sep. 30, 2020	Sep. 30, 2019
Lessee, Operating Lease, Term of Contract (Year)			46 years
Tenant Receivable, Current			$ 124,617	$ 11,564
BASK [Member]
Notes Receivable, Related Parties		$ 129,634	$ 119,512	$ 148,763
Interest Receivable		$ 44,517
Note Receivable, Term (Year)		5 years
Note Receivable, Interest Rate		18.00%	18.00%	18.00%
Tenant Receivable, Current			$ 124,617
BASK [Member] | Lease Agreement [Member]
Lessee, Operating Lease, Term of Contract (Year)	15 years
Annual Base Rent	$ 135,000
Operating Lease, Percentage of Leassee's Gross Revenue	15.00%

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Note 7 - Earnings Per Share (Details Textual) - shares	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	1,850,000	750,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	9,638,650	11,238,650
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	100,000	256,667

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Note 7 - Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Net loss attributable to common stockholders	$ (709,343)	$ (4,903,668)
Basic weighted average outstanding shares of common stock (in shares)	23,504,820	22,984,703
Dilutive effects of common share equivalents (in shares)	0	0
Dilutive weighted average outstanding shares of common stock (in shares)	23,504,820	22,984,703
Basic and diluted loss per common share (in dollars per share)	$ (0.03)	$ (0.21)

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Note 8 - Income Taxes (Details Textual) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Operating Loss Carryforwards, Total	$ 11,564,017		$ 10,019,634
Deferred Tax Assets, Tax Effect, Net Operating Loss and Other Temporary Differences	$ 379,146	$ 776,036
Deferred Tax Assets, Valuation Allowance, Percent Offset	100.00%
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	$ (400,073)	$ (776,036)

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Note 8 - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Deferred tax assets	$ 2,838,966	$ 2,438,893
Deferred tax liabilities	0	0
Valuation allowance	(2,838,966)	(2,438,893)
Net deferred tax assets/(liabilities)

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Note 8 - Income Taxes - Temporary Differences Between Basis and Reported Deferred Tax Assets (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Net operating loss	$ 709,343	$ 4,903,668
Net operating loss, tax effect	174,144	1,209,245
Tax impact true up, temporary difference
Tax impact true up, tax effect	20,927
Other temporary differences, temporary difference	835,040	(1,756,726)
Other temporary differences, tax effect	205,002	(433,209)
Net deferred tax assets, temporary difference	1,544,383	3,146,942
Net deferred tax assets, tax effect	400,073	776,036
Valuation allowance, temporary difference	(1,544,383)	(3,146,942)
Valuation allowance, tax effect	(400,073)	(776,036)
Total deferred tax asset	0	0
Deferred tax liabilities	0	0
Net deferred tax assets/(liabilities)

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Note 8 - Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
U.S. Federal statutory graduated rate	21.00%	21.00%
State income tax rate, net of federal benefit	3.55%	3.66%
Total rate	24.55%	24.66%
Less: Net operating loss for which no benefit is currently available	(24.55%)	(24.66%)
Net effective rate	0.00%	0.00%

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Note 9 - Equity (Details Textual)				12 Months Ended
	Aug. 27, 2019 $ / shares shares	Aug. 18, 2017 shares	Jul. 14, 2016 $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares	Aug. 02, 2019 USD ($) $ / shares shares	Sep. 30, 2018 $ / shares	Dec. 12, 2017 USD ($)	May 01, 2016 USD ($)	Feb. 01, 2016 USD ($)	Sep. 30, 2010 $ / shares shares
Preferred Stock, Shares Authorized (in shares) | shares				20,000,000	20,000,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares				$ 0.0001	$ 0.0001
Preferred Stock, Shares Outstanding, Ending Balance (in shares) | shares				0	0
Proceeds from Issuance of Common Stock					$ 1,211,000
Debt Conversion, Original Debt, Amount					$ 261,513
Debt Conversion, Converted Instrument, Shares Issued (in shares) | shares					174,342
Stock Issued During Period, Shares, Issued for Services (in shares) | shares				191,490	119,734
Stock Issued During Period, Value, Issued for Services				$ 90,000	$ 154,998
Stock Issued During Period, Shares, Warrants Exercised (in shares) | shares					388,000
Proceeds from Warrant Exercises					$ 475,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | shares				1,000,000	900,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share) | $ / shares				$ 2.25	$ 1.50
Class of Warrant or Right, Granted During Period, Exercise Price (in dollars per share) | $ / shares					1.33
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares				$ 1.39	$ 1.52		$ 1.55
Warrants Issued to Unrelated Party for Financing [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares						48,000
Warrants Issued to Unrelated Parties Lenders [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares						600,000					1,500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares						$ 1.50
Warrants Issued for Notes Amendment [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares					1,500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares					$ 1.25						$ 1.25
Strategic Capital Partners [Member]
Debt Conversion, Converted Instrument, Shares Issued (in shares) | shares			400,000
Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares			800,000		600,000
Class of Warrant or Right, Granted During Period, Exercise Price (in dollars per share) | $ / shares					$ 1.50
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares			$ 3
Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member] | Measurement Input, Expected Dividend Rate [Member]
Warrants and Rights Outstanding, Measurement Input					0
Minimum [Member] | Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member] | Measurement Input, Price Volatility [Member]
Warrants and Rights Outstanding, Measurement Input					119
Minimum [Member] | Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member] | Measurement Input, Risk Free Interest Rate [Member]
Warrants and Rights Outstanding, Measurement Input					1.56
Minimum [Member] | Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member] | Measurement Input, Share Price [Member]
Warrants and Rights Outstanding, Measurement Input					0.95
Maximum [Member] | Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member] | Measurement Input, Expected Term [Member]
Warrants and Rights Outstanding, Measurement Input					5
Maximum [Member] | Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member] | Measurement Input, Price Volatility [Member]
Warrants and Rights Outstanding, Measurement Input					144
Maximum [Member] | Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member] | Measurement Input, Risk Free Interest Rate [Member]
Warrants and Rights Outstanding, Measurement Input					1.67
Maximum [Member] | Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member] | Measurement Input, Share Price [Member]
Warrants and Rights Outstanding, Measurement Input					1.23
Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares) | shares		1,500,000
Share-based Payment Arrangement, Expense, after Tax				$ 471,971	$ 578,790
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total				0
Proceeds from Stock Options Exercised				$ 0
Stock Incentive Plan [Member] | Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | shares				500,000	600,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share) | $ / shares				$ 1.50	$ 1.50
Share-based Payment Arrangement, Expense, after Tax					$ 488,793
Stock Incentive Plan [Member] | Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | shares	300,000			500,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 1.50			$ 3
Share-based Payment Arrangement, Expense, after Tax				$ 301,770
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	2 years 182 days
Stock Incentive Plan [Member] | Share-based Payment Arrangement, Option [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate		0.28%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term (Year)		4 years 292 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		118.00%
Stock Incentive Plan [Member] | Share-based Payment Arrangement, Option [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate		1.55%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term (Year)		5 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		142.00%
Equity Line Agreement [Member]
Purchase Price of Weighted Average Price of Common Stock								90.00%
Stock Issued During Period, Value, New Issues					715,981
Proceeds from Issuance of Common Stock					$ 1,211,000
Mountain States Capital, LLC [Member]
Line of Credit Facility, Maximum Borrowing Capacity								$ 10,000,000
Line of Credit Facility, Current Borrowing Capacity								$ 500,000
Unrelated Party [Member]
Line of Credit Facility, Current Borrowing Capacity									$ 1,000,000	$ 200,000
Debt Instrument, Face Amount						$ 4,000,000

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Note 9 - Equity - Stock Option Activity (Details) - $ / shares	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Shares Outstanding (in shares)	1,050,000	150,000
Outstanding, weighted average exercise price (in dollars per share)	$ 1.64	$ 2.21
Outstanding, weighted average contractual term (Year)	4 years 73 days	4 years 146 days	2 years 328 days
Shares Granted (in shares)	1,000,000	900,000
Granted, weighted average exercise price (in dollars per share)	$ 2.25	$ 1.50
Granted, weighted average contractual term (Year)	5 years	4 years 292 days
Shares Forfeited (in shares)	(200,000)
Forfeited, weighted average exercise price (in dollars per share)	$ 1.50
Shares Outstanding (in shares)	1,850,000	1,050,000	150,000
Outstanding, weighted average exercise price (in dollars per share)	$ 1.99	$ 1.64	$ 2.21
Shares Vested and expected to vest (in shares)	1,850,000
Vested and expected to vest, weighted average exercise price (in dollars per share)	$ 1.99
Vested and expected to vest, weighted average contractual term (Year)	4 years 73 days
Shares Exercisable (in shares)	1,850,000
Exercisable, weighted average exercise price (in dollars per share)	$ 1.99
Exercisable, weighted average contractual term (Year)	4 years 73 days

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Note 9 - Equity - Warrant Activity (Details) - $ / shares	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2020
Outstanding, warrants (in shares)	11,238,650	9,478,650
Outstanding, warrants, weighted average exercise price (in dollars per share)	$ 1.52	$ 1.55
Outstanding, warrants, weighted average remaining contract term (Year)	1 year 292 days	2 years 109 days	2 years 219 days
Granted, warrants (in shares)		2,148,000
Granted, warrants, weighted average exercise price (in dollars per share)		$ 1.33
Exercised, warrants (in shares)	(1,600,000)	(388,000)
Exercised, warrants, weighted average exercise price (in dollars per share)		$ 1.23
Expired, warrants, weighted average exercise price (in dollars per share)	$ 2.25
Outstanding, warrants (in shares)	11,238,650	9,478,650	9,478,650	9,638,650
Outstanding, warrants, weighted average exercise price (in dollars per share)	$ 1.52	$ 1.55	$ 1.55	$ 1.39
Exercisable, warrants (in shares)	9,638,650
Exercisable, warrants, weighted average exercise price (in dollars per share)	$ 1.39
Exercisable, warrants, weighted average remaining contract term (Year)	1 year 182 days

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Note 10 - Commitments and Contingencies (Details Textual)			12 Months Ended		14 Months Ended	21 Months Ended
	Sep. 01, 2019	Oct. 17, 2016 USD ($) a	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2016 USD ($)	Oct. 01, 2019 USD ($)	Jan. 14, 2015 USD ($) a
Lessee, Operating Lease, Term of Contract (Year)			46 years
Operating Lease, Right-of-Use Asset			$ 6,914,080	$ 0			$ 6,980,957
Operating Lease, Liability, Total			4,247,952				4,256,869
Prepaid Rent			0	57,959
Operating Lease, Liability, Current			4,728
Operating Lease, Liability, Noncurrent			4,243,224	0
Operating Cash Flows from Operating Leases			256,125
Operating Lease, Expense			401,021	410,162
Office Space in Denver, CO [Member]
Operating Leases, Monthly Payment			2,500
Operating Lease, Expense			$ 18,303	$ 15,055
BASK [Member]
Lessee, Operating Sublease, Term (Year)	15 years
Lessee, Operating Sublease, Percentage of Gross Revenues	15.00%
Sale Leaseback to MMP [Member]
Lessee, Operating Lease, Term of Contract (Year)		50 years
Lessee Leasing Arrangements, Operating Leases, Number of Renewal Periods		4
Lessee, Operating Lease, Renewal Term (Year)		10 years
Sale Leaseback Transaction, Monthly Rental Payments		$ 30,000
Sale Leaseback Transaction, Monthly Rental Payments, Per Square Foot		0.38
Sale Leaseback Transaction, Monthly Rental Payments, Percentage of Gross Monthly Sales		1.50%
Sale Leaseback Transaction, Monthly Rental Payments, Adjustment Period (Year)		5 years
Sale Leaseback to MMP [Member] | Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset							2,724,088
Prepaid Rent							$ (2,724,088)
Massachusetts Land Purchase [Member]
Area of Land (Acre) | a		52.6						52.6
Deposits on Land								$ 100,000
Land, Selling Price		$ 4,475,000			$ 4,325,000
Payments to Acquire Land					$ 725,000	$ 925,000
Payments to Acquire Land Held-for-use		$ 3,550,000

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Note 10 - Commitments and Contingencies - Lease Related Terms and Discount Rates (Details)	Sep. 30, 2020
Operating leases (Year)	46 years
Operating leases	7.90%

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Note 10 - Commitments and Contingencies - Future Rental Payments Under Operating Leases (Details) - USD ($)	Sep. 30, 2020	Oct. 01, 2019	Sep. 30, 2019
2021	$ 341,500
2022	341,500
2023	341,500
2024	341,500
2025	341,500
Thereafter	14,001,500
Total lease payments	15,709,000
Less: Interest	(11,461,048)
Operating Lease, Liability, Total	4,247,952	$ 4,256,869
Less: operating lease liability, current portion	(4,728)
Operating Lease, Liability, Noncurrent	$ 4,243,224		$ 0

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Note 11 - Subseqent Events (Details Textual) - USD ($)	Dec. 04, 2020	Oct. 12, 2020	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019
Notes Payable, Current, Total			$ 150,250		$ 385,000
Notes Payable, Noncurrent, Total			3,578,517		3,117,397
Accredited Investors [Member] | Convertible Debt [Member] | February 2018 Convertible Notes [Member]
Notes Payable, Current, Total			150,000	$ 150,000	$ 190,000
Accredited Investors [Member] | Convertible Debt [Member] | February 2018 Convertible Notes [Member] | Subsequent Event [Member]
Notes Payable, Current, Total		$ 150,000
Unrelated Party [Member] | Promissory Notes [Member]
Notes Payable, Noncurrent, Total			$ 4,000,000
Unrelated Party [Member] | Promissory Notes [Member] | Subsequent Event [Member]
Notes Payable, Noncurrent, Total	$ 4,000,000
Increase (Decrease) In Notes Payable	$ 500,000