AMMJ American Cannabis Company Inc (CE)

Section 2 - Financial Information Item 2.01

Completion of Acquisition or Disposition of Assets.

On April 30, 2021, the Colorado MED and the City of Colorado Springs granted approval for the change of ownership, and the registrant completed an asset purchase agreement with Medihemp, LLC (“Medihemp”) and its wholly owned subsidiary SLAM Enterprises, LLC (“SLAM”), and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”), each an entity organized and operating under the laws of the State of Colorado, and all doing business as “Naturaleaf.” No material relationship exists, other than in respect of the transaction, between Medihemp, SLAM and Medical Cannabis, and the registrant or any of its affiliates, or any director or officer of the registrant, or any associate of any such director or officer.

Medihemp and SLAM respectively own fixed assets and operate two retail Medical Marijuana Centers located at 1004 S. Tejon Street, Colorado Springs, CO 80903, and 2727 Palmer Park Blvd. Suite A, Colorado Springs, CO 80909.

Medical Cannabis owns fixed assets and operates a retail Medical Marijuana Center located at 5875 Lehman Drive, Ste. 100, Colorado Springs, CO 80918.

Medical Cannabis also owns and operates a Medical Marijuana Optional Premises Cultivation license, and a Medical Marijuana-Infused Product Manufacturer license, along with fixed assets all located at 2611 Durango Drive, Colorado Springs, CO 80910.

By virtue of the closing of the asset purchase agreement, the Registrant agreed to purchase, and Medihemp, SLAM, and Medical Cannabis agreed to sell and/or assign to the Registrant, all of their respective fixed assets and associated intellectual property, including assignment of the following licenses issued by the Colorado Marijuana Enforcement Division (“MED”) and the corresponding City of Colorado Springs (“City”):

As part of the transaction, the Registrant assumed leases for Medihemp, SLAM, and Medical Cannabis’ respective retail Medical Marijuana Centers. The Registrant entered into a separate lease for Medical Cannabis’ Durango Drive facility.

The purchase price for the acquisition is $2.2 million dollars and the issuance of 3 million shares of the Registrant’s restricted common stock. Payment terms required a $20,000 non-refundable payment upon signing, which the registrant made, a cash payment of $1,080,000 after the receipt of the Contingent Approval Letters of the Change of Ownership applications from the MED and City, and the balance of $1,100,000 paid pursuant to a promissory note executed by Registrant effective upon receipt of the Contingent Approval Letters. The maturity date of the Promissory Note is 365 days from the Closing Date, includes 10% simple interest accruing annually, and is not subject to a pre-payment penalty. The transaction documents are incorporated herein by reference from the registrant’s Form 8-K filed March 12, 2021.