MJ (MJNE) 10-Q/A 11 Dec 18 2018 Q3 Quarterly report (amended) Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Dec. 10, 2018
Document And Entity Information
Entity Registrant Name	MJ Holdings, Inc.
Entity Central Index Key	1,456,857
Trading Symbol	MJNE
Amendment Flag	true
Amendment Description	Amendment No. 1
Current Fiscal Year End Date	--12-31
Document Type	10-Q/A
Document Period End Date	Sep. 30, 2018
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,018
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Transition Period	false
Entity Common Stock, Shares Outstanding		70,957,480

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current Assets
Cash	$ 1,414,052	$ 2,513,863
Prepaid expenses	740,083	5,500
Prepaid inventory	2,000,000
Total Current Assets	4,154,135	2,519,363
Fixed Assets
Leasehold improvements	1,247,210	17,535
Other Assets
Deposits	133,633	42,383
Intangible asset	300,000	300,000
Available for Sale Securities	300,000
Noncurrent assets held for disposition	584	584
Total Assets	6,135,562	2,879,865
Current Liabilities:
Accounts payable and accrued liabilities	155,559	70,382
Customer deposits	386,416
Convertible notes payable due to related party		900,000
Total Current Liabilities	541,975	970,382
Noncurrent Liabilities:
Deferred rent	203,754	104,565
Total noncurrent liabilities	203,754	104,565
Total Liabilities	745,729	1,074,947
Stockholders' Equity
Preferred stock, par value $0.001, 5,000,000 shares authorized; 2,500 and 0 shares issued and outstanding, respectively	3
Common stock, par value $0.001, 95,000,000 shares authorized; 67,297,480 and 62,675,407 shares issued and outstanding, respectively	67,297	62,675
Additional paid in capital	10,477,864	1,704,764
Common stock to be issued		400,000
Stock subscription receivable	(597,000)
Accumulated deficit	(4,708,331)	(362,521)
Accumulated other comprehensive income	150,000
Total Stockholders' Equity	5,389,833	1,804,918
Total Liabilities and Stockholders' Equity	$ 6,135,562	$ 2,879,865

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	2,500	0
Preferred stock, shares outstanding	2,500	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	95,000,000	95,000,000
Common stock, shares issued	67,297,480	62,675,407
Common stock, shares outstanding	67,297,480	62,675,407

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Operating Expenses
General and administrative	$ 987,258	$ 73,423	$ 1,598,256	$ 108,902
Sales and marketing	63,808		248,064
Total operating expenses	1,051,066	73,423	1,846,320	108,902
Operating loss	(1,051,066)	(73,423)	(1,846,320)	(108,902)
Other Expenses (Income)
Interest expense (income)	(145)	25,389	(510)	39,132
Total other expenses (income)	(145)	25,389	(510)	39,132
Loss before provision for income taxes	(1,050,921)	(98,812)	(1,845,810)	(148,034)
Provision for income taxes
Net Loss	(1,050,921)	(98,812)	(1,845,810)	(148,034)
Deemed dividend related to beneficial conversion feature of convertible preferred stock	(2,500,000)		(2,500,000)
Net loss attributable to common shareholders	$ (3,550,921)	$ (98,812)	$ (4,345,810)	$ (148,034)
Basic and diluted net loss per common share:	$ (0.06)	$ 0	$ (0.07)	$ 0
Weighted average shares outstanding	63,746,119	52,732,969	63,298,565	52,732,969

Consolidated Statement of Compr

Consolidated Statement of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Net loss	$ (1,050,921)	$ (98,812)	$ (1,845,810)	$ (148,034)
Other comprehensive income
Unrealized gains on securities available for sale	150,000		150,000
Total other comprehensive income	150,000		150,000
Total comprehensive loss	$ (900,921)	$ (98,812)	$ (1,695,810)	$ (148,034)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash Flows from Operating Activities
Net loss	$ (1,845,810)	$ (148,034)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt issuance cost		6,600
Amortization of deferred rent	99,188	52,033
Common stock and options issued for services	106,728
Changes in operating assets and liabilities:
Prepaid expenses and prepaid inventory	(2,734,583)
Deposits	(91,250)	(42,383)
Accounts payable and accrued liabilities	85,177	28,571
Customer deposits	386,416
Net cash used in operating activities	(3,994,134)	(103,213)
Cash Flows from Investing Activities:
Purchase of license		(300,000)
Payment for leasehold improvements	(1,229,675)
Net cash used in investing activities	(1,229,675)	(300,000)
Cash Flows from Financing Activities
Proceeds from issuance of preferred stock	2,500,000
Proceeds from issuance of common stock	2,523,998
Proceeds from common stock to be issued		20,001
Proceeds from notes payable		339,440
Repayment of convertible note due to related party	(900,000)
Net cash provided by financing activities	4,123,998	359,441
Net decrease in cash	(1,099,811)	(43,772)
Cash, beginning of period	2,513,863
Cash, end of period	1,414,052	(43,772)
Supplemental disclosure of cash flow information:
Income taxes paid
Non-cash investing activities:
Common stock issued to acquire available for sale securities	$ 150,000

Nature of the Business

Nature of the Business	9 Months Ended
	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of the Business	Note 1 — Nature of the Business MJ Holdings, Inc. (“the Company”) is a holding company whose subsidiaries provide cultivation management, infrastructure, and consulting services to the regulated cannabis industry, in addition to holding, and managing third party Nevada state issued cultivation and production licenses. In April 2018, the State of Nevada finalized and approved the provisional Medical Marijuana Establishment Registration Certificate (the “Certificate”) held by our wholly owned subsidiary, Red Earth, LLC (“Red Earth”). The Certificate, when perfected, will allow the Company to commence legal marijuana cultivation activities in the State of Nevada. HDGLV, LLC (“HDGLV”), a wholly owned subsidiary of Red Earth, holds a triple-net leasehold interest, with an option to buy, in a 17,298 square-foot building, which we expect will be the home to our indoor cultivation facility. Phase 1 of this facility was completed in July of 2018. We received final approval from the State of Nevada, Department of Taxation with respect to the Certificate, and Red Earth was issued a Business License by the City of Las Vegas during the quarter ended September 30, 2018. We expect to complete additional modifications and open the facility in January of 2019. In April 2018, the Company entered into a management agreement with a Nevada company (the “Licensed Operator”) that holds a license, for the legal cultivation of marijuana for sale under the laws of the State of Nevada. The Licensed Operator has engaged us to develop, manage, and operate a licensed cultivation facility on property owned by the Licensed Operator. At our sole cost and expense, we completed the construction of a 120,000 square-foot outdoor grow facility, including the construction of an 8,000 square-foot building and installation of required security fencing, meeting the State of Nevada building codes and regulations. Operation of this facility commenced in August, 2018. The Company will account for the biological assets at LCM (lower of cost or market) as inventory in accordance with ASC 905 Agriculture. At September 30, 2018 the seedlings were in an immature state. See Note 4 Prepayments and deposits, Management Agreement. In order to develop and manage the three-acre outdoor facility, the Company entered into a management services agreement with a Nevada limited liability company (the “Manager”) to provide operational oversight and cultivation management for the Company’s proposed three-acre outdoor cultivation facility. The term of the agreement is for three years. The Manager is entitled to receive compensation equal to twelve percent of the gross yield sales from each harvest with six percent payable in the form of cash and six percent payable in the form of the Company’s common stock. The Manager is entitled to bonus compensation equal to 2 percent of gross yield sales in excess of $10,000,000 but less than $12,500,000; three and one-half percent of the gross yield sales in excess of $12,500,000 but less than $15,000,000; and, five percent of any gross yield sales in excess of $15,000,000. All bonus’ are payable in the form of the Company’s common stock. In September of 2018 the Company, through its wholly owned subsidiary, Red Earth applied for five Recreational Marijuana Establishment Licenses to operate up to five retail marijuana stores within the state of Nevada. The Company’s goal is to open a store within the City of Las Vegas, as well as additional dispensaries in Washoe County near Lake Tahoe, in North Las Vegas, unincorporated Clark County and Henderson, Nevada. The Company was advised on December 6, 2018 that none of the applications resulted in the grant of a dispensary license. We intend to grow our business through the acquisition of existing companies and/or through the development of new opportunities that can provide a 360-degree spectrum of infrastructure (dispensaries), cultivation/production management, and consulting services in the regulated cannabis industry.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 2 — Summary of Significant Accounting Policies The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these consolidated financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the consolidated financial statements not misleading have been included. The balance sheet at December 31, 2017, has been derived from the Company’s audited consolidated financial statements as of that date. The unaudited consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and the notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, that was filed with the SEC on July 27, 2018. The results of operations for the nine months ended September 30, 2018, are not necessarily indicative of the results to be expected for the full year or any further periods. The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The significant accounting policies followed by the Company for interim reporting are consistent with those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. There were no material changes to our significant accounting policies during the interim period ended September 30, 2018.

Going Concern

Going Concern	9 Months Ended
	Sep. 30, 2018
Going Concern [Abstract]
Going Concern	Note 3 — Going Concern Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company has not generated revenue from its existing business and has an accumulated deficit of $2,208,331 from inception (October 17, 2016) to September 30, 2018. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. In the event the Company experiences liquidity and capital resource constraints because of unanticipated operating losses, we may need to raise additional capital in the form of equity and/or debt financing. If such additional capital is not available on terms acceptable to us or at all, then we may need to curtail our operations and/or take additional measures to conserve and manage our liquidity and capital resources, any of which would have a material adverse effect on our financial position, results of operations, and our ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Prepayments and Deposits

Prepayments and Deposits	9 Months Ended
	Sep. 30, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepayments and Deposits	Note 4 — Prepayments and Deposits Prepaid Inventory On August 13, 2018 (the “Effective Transaction Date”), the Company closed the transactions contemplated by an Exclusive Distribution Agreement (the “Exclusive Distribution Agreement”) dated August 13, 2018. The Exclusive Distribution Agreement is between the Company and Healthier Choices Management Corporation (“Healthier Choices”), a designer and seller of cannabis consumption Q-Cups, which are designed to consume cannabis products by vaporizing oil. The Company has the exclusive right to distribute Q-Cups in Nevada. The Exclusive Distribution Agreement further requires the Company to advertise and market Q-Cups in Nevada. Pursuant to the terms of the Agreement, the Company purchased Q-Cups from Healthier Choices and tendered the sum of two million dollars ($2,000,000). Delivery of the inventory had not been received as of September, 2018. The funds were transferred to Healthier Choices on the Effective Transaction Date. Healthier Choices has applied for and has been granted a patent with respect to the Q-Cup. The initial term of the Exclusive Distribution Agreement is for one year, with additional successive one-year renewals, subject to certain standard termination provisions. The Exclusive Distribution Agreement is subject to standard termination provisions; however, Healthier Choices has the option to terminate the Exclusive Distribution Agreement, on 30 days’ written notice, if the Company fails to purchase a sufficient minimum quantity of Q-Cups from Healthier Choices. The Company has met its obligations for the first year of the Exclusive Distribution Agreement through the payment of $2,000,000. Thereafter, for each renewal term, the Company’s minimum purchase obligation for Q-Cups is currently $500,000, subject to a good faith negotiation at the end of each year. Notwithstanding the exclusivity provided by the Exclusive Distribution Agreement, Healthier Choices reserves the right to sell Q-Cups, directly or indirectly, to a specific retail group (the “Excluded Account”). In such event, Healthier Choices shall pay to the Company a fee equivalent to 5% of the gross sales of Q-Cups that Healthier Choices sold to an Excluded Account in Nevada. The Company, however, does not have the right to appoint sub-distributors or sell Q-Cups through any third party. In connection with the transactions contemplated by the Exclusive Distribution Agreement, Healthier Choices granted to the Company a non-exclusive, non-transferrable, and non-sub-licensable fully paid license agreement. The Exclusive Distribution Agreement provides standard cross-indemnity provisions. The Company also entered into a Stock Exchange Agreement (the “Stock Exchange Agreement”) with Healthier Choices in August 2018. Please see Note 7, Available for Sale Securities, Prepaid Expenses In February 2018, the Company began discussions with an unrelated third-party regarding designing, purchasing, and reselling greenhouses. The Company provided expertise in constructing green houses, and the other party advised that it would enter into agreement to design, procure, and operate greenhouses. In April 2018, the third party notified the Company and the purchasers of the green houses that it could not continue with the construction of the green houses because of unrelated hardships. However, the Company, after subsequent conversations with the purchasers, agreed to complete the construction and installation of six (6) greenhouses to four (4) separate purchasers. As of September 30, 2018, the Company had received $386,416 in deposits from the purchasers which were recorded as customer deposits on the balance sheet, and has paid $335,083 expenses related to the design, purchase and resale of green houses, which expenses were recorded as prepaid expenses. As of September 30, 2018, the Company had made a Prepayment in the amount of $50,000 to an unrelated third-party for the acquisition of all of the membership units of Farm Road, LLC including 260 acres of farmland in the Amargosa Valley of Nevada and the concomitant water rights. The Prepayment is a non-refundable deposit to be held in escrow until the closing of the transaction. In the event that the transaction does not close on or before January 31, 2019 the deposit is subject to forfeiture. As of September 30, 2018, the Company had made a Prepayment in the amount of $95,000 to an unrelated third-party for the acquisition of an approximately 10,000 square foot office building located at 1300 S Jones Blvd., Las Vegas, NV 89146. The Prepayment is a deposit to be held in escrow until the closing of the transaction. The transaction closed on October 18, 2018. (See Note 13, Subsequent Events, Purchase of Office Building). Management Agreement In March 2018, the Company entered into a management services agreement with a Nevada limited liability company (the “Manager”) to provide operational oversight and cultivation management for the Company’s proposed three-acre outdoor cultivation facility. The term of the agreement is for three years. The Manager is entitled to receive compensation equal to twelve percent of the gross yield sales from each harvest with six percent payable in the form of cash and six percent payable in the form of the Company’s common stock. The Manager is entitled to bonus compensation equal to 2 percent of gross yield sales in excess of $10,000,000 but less than $12,500,000; three and one-half percent of the gross yield sales in excess of $12,500,000 but less than $15,000,000; and, five percent of any gross yield sales in excess of $15,000,000. All bonus’ are payable in the form of the Company’s common stock. On April 18, 2018, the Company entered into a management agreement with the Licensed Operator that holds a cultivation license, so that it can lawfully engage in the cultivation of marijuana for sale under the laws of the State of Nevada. The term of the agreement is for 8 years to cultivate a three-acre plot at the 37 acre facility. The Licensed Operator has engaged the Company to develop, manage, and operate a licensed cultivation facility on three-acres of property owned by the Licensed Operator. The Company, at its sole cost and expense, has agreed to complete the construction of an outdoor cultivation facility meeting the local and state building codes and regulations to cultivate marijuana. Upon completion of the construction of the outdoor cultivation facility and receipt of the appropriate approvals from the local and state authorities, the Company began cultivating marijuana. Pursuant to the terms of the management agreement, the Company agreed to generate sales of at least $5 million per year from product cultivated from the outdoor cultivation facility. The Licensed Operator may terminate the agreement, in accordance with the terms of the management agreement, if it does not generate at least $5 million in annual revenues. Prior to the termination of the management agreement by the Licensed Operator, the Company may cure a breach of this provision by paying 10% of the revenue shortfall to the Licensed Operator. Pursuant to the management agreement, the Licensed Operator will (i) retain 15% of the net revenues generated from product cultivated from the outdoor cultivation facility and (ii) pay 85% of the net revenues to the Company. Upon execution of the management agreement, the Company paid $300,000 to the Licensed Operator as consideration for the opportunity to construct and manage the outdoor cultivation facility on the Licensed Operator’s property. In exchange for the initial consideration, the Licensed Operator agreed not to retain 15% of the first $2 million of net revenues generated from the outdoor cultivation facility. In addition, once the outdoor facility began cultivating in August of 2018, the Company became obligated to pay the Licensed Operator $7,000 per month for compliance, security, and other administration costs incurred by the Licensed Operator during the term of the agreement. As of September 30, 2018, the Company recorded the $300,000 paid to the Licensed Operator as prepaid expenses. In order to develop and manage the three-acre outdoor facility, the Company entered into a management services agreement with with a Nevada limited liability company (the “Manager”) to provide operational oversight and cultivation management for the Company’s proposed three-acre outdoor cultivation facility. The term of the agreement is for three years. The Manager is entitled to receive compensation equal to twelve percent of the gross yield sales from each harvest with six percent payable in the form of cash and six percent payable in the form of the Company’s common stock. The Manager is entitled to bonus compensation equal to 2 percent of gross yield sales in excess of $10,000,000 but less than $12,500,000; three and one-half percent of the gross yield sales in excess of $12,500,000 but less than $15,000,000; and, five percent of any gross yield sales in excess of $15,000,000. All bonus’ are payable in the form of the Company’s common stock.

Leasehold Improvements

Leasehold Improvements	9 Months Ended
	Sep. 30, 2018
Leases [Abstract]
Leasehold Improvements	Note 5 — Leasehold Improvements On April 18, 2018, the Company entered into a management agreement as described in Note 4, Prepayments and deposits, Management Agreement. Pursuant to that management agreement, the Company commenced construction of the outdoor cultivation facility. As of September 30, 2018, the Company had incurred and capitalized $1,154,842 in costs associated with the construction of this facility. During the quarter ended September 30, 2018, the Company incurred costs associated with the construction of an indoor cultivation facility to be located at 2310 Western Avenue in Las Vegas, Nevada. The Company, through its indirect wholly owned-subsidiary, HDGLV, holds a triple net leasehold interest in a 17,298 square-foot building. In addition, in April 2018, the State of Nevada finalized and approved the Certificate held by Red Earth to grow marijuana within the City of Las Vegas in the State of Nevada, which will allow the Company to commence legal marijuana cultivation. Once ongoing construction is completed, the Company intends to operate the facility as an indoor marijuana cultivation and an agritourism destination. This facility is intended to serve as a draw for tourists who desire to visit, see, and learn about the inner-workings of a cannabis cultivation facility. Completion of this facility is expected in January 2019. As of September 30, 2018, the Company had incurred and capitalized $74,833 in costs associated with the construction of this facility. As of December 31, 2017, the Company had incurred and capitalized $17,535 in costs associated with improvements to its leasehold located at 3275 S Jones, Blvd., Suite 104, Las Vegas, NV 89146.

Intangible Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Note 6 — Intangible Assets In October 2016, Red Earth entered into an Asset Purchase and Sale Agreement to purchase the Certificate from the seller for $300,000. To initiate the purchase and transfer of the Certificate, Red Earth paid a $25,000 deposit to the seller in October 2016. In February 2017, an investor advanced the Company $350,000 to fund the purchase of the Certificate. The Nevada Department of Taxation approved the Certificate in April 2018. Once the Company completes the construction of the cultivation and agritourism destination facility, and obtains the required state and city approvals, it will begin cultivating marijuana. At that point, the intangible asset will be amortized over its useful life.

Available for Sale Securities

Available for Sale Securities	9 Months Ended
	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Available for Sale Securities	Note 7 — Available for Sale Securities On August 13, 2018, the Company entered into a Stock Exchange Agreement with Healthier Choices to acquire 1,500,000,000 shares of Healthier Choices’ common stock in exchange for 85,714 shares of the Company’s common stock. The value of the stock exchanged by each party on the date of exchange was $150,000. This represents a less than 5% ownership interest for each company in the others’ company, and the shares issued are restricted. The shares of common stock constitute “restricted securities” that may be eligible for resale pursuant to Rule 144 of the Securities Act of 1933. Please see note 4, Prepaid Inventory, for further discussion of the Company’s additional business interests with Healthier Choices. The Company accounted for this purchase of shares using the cost method and intends to mark the value to market each reporting period based on the then current market value of its held shares in Healthier Choices. As of the transaction date, the price as quoted on the OTC Markets for Healthier Choices common stock was $0.0001 per share and $.0002 as of September 30, 2018, resulting in a $150,000 unrealized gain

Convertible Note Payable Due to

Convertible Note Payable Due to Related Party	9 Months Ended
	Sep. 30, 2018
Related Party Transactions [Abstract]
Convertible Note Payable Due to Related Party	Note 8 — Convertible Note Payable Due to Related Party On December 15, 2017, the Company issued a convertible note payable in the amount of $900,000 to the members of Red Earth. The managing partner and 50% owner of Red Earth at the time of the transaction was Paris Balaouras, the Company’s current Chief Executive Officer. The convertible note payable was due October 15, 2018. The note was convertible into shares of the Company’s common stock at the holder’s discretion at a conversion price of $0.75 per share. The note accrues interest, commencing nine months from the issuance date, at a rate equal to one half of one percent (0.50%) per annum. Interest was payable on the maturity date or the conversion date, if applicable. The Company assessed the embedded conversion feature of the note payable and determined that the fair value of the underlying common stock at inception did not exceed the conversion price of the convertible note. Since, at the time the convertible note was issued, the Company’s common stock had limited publicly traded volume, the Company based the fair value of the Company’s common stock on the sales of the Company’s common stock, which were sold at $0.75 per share. The Company repaid the note in full in January 2018.

Preferred Stock

Preferred Stock	9 Months Ended
	Sep. 30, 2018
Equity [Abstract]
Preferred Stock	Note 9 — Preferred Stock On August 9, 2018 (the “Transaction Date”), the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”), pursuant to which the Company sold and issued 2,500 shares of its Series A Convertible Preferred Stock (the “Preferred Stock”) to a single institutional, accredited investor for $1,000 per share or an aggregate subscription of $2,500,000. Subject to a standard “4.99% Beneficial Ownership Limitation blocker,” the Preferred Stock is convertible into 3,335,000 shares of the Company’s Common Stock at a conversion price of $0.75 per share, subject to adjustment as described in the Certificate of Designation. The Company also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the purchaser, pursuant to which the Company is obligated to file a registration statement with the SEC within 30 calendar days of the Transaction Date, to register for resale the shares of common stock underlying the Preferred Stock. The Company filed the required registration statement on October 5, 2018. If the SEC has not declared the registration statement effective by the 60th calendar day following the Transaction Date (or, in the event of a “full review” by the SEC, the 90th calendar day following the Transaction Date), or upon the occurrence of other events, then the Company was obligated to pay to the purchaser an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 4.0% multiplied by the aggregate subscription amount paid by the purchaser pursuant to the Securities Purchase Agreement on a monthly basis until the event has been cured. On October 24, 2018 the Company was notified by the SEC that its registration was deemed effective on this date. Accordingly, the Company is not subject to any further fees or damages related to this provision. On August 13, 2018, the Company filed a Certificate of Designation of its Series A Convertible Preferred Stock with the Secretary of State of the State of Nevada to designate a series of its convertible preferred stock, consisting of 2,500 shares. The stated value of each share of Preferred Stock is $1,000. Subject to a standard “4.99% Beneficial Ownership Limitation blocker,” each share of Preferred Stock is convertible into shares of the Company’s common stock at any time or from time to time at a conversion price equivalent of $0.75 per share, subject to adjustment as described in Certificate of Designation. Beneficial Conversion Feature Pursuant to GAAP, a beneficial conversion feature (“BCF”) exists to the extent that a convertible security is issued at a price that is less than the fair value of the security into which it is convertible. This guidance applies to the Preferred Stock as these shares were issued at $1,000 per share which, based on the Conversion Rate computes to a common share equivalent price of $.75 per share, which was less than the share price of the Company’s common stock at the time of issuance of $1.90 per share. The difference between these two prices, created a BCF. The BCF is treated as a deemed dividend to the holders of Preferred Stock since the conversion feature is immediately exercisable for the Preferred Stock. The BCF is recorded as a decrease to Retained earnings and an increase to Additional paid-in capital. The deemed dividend also affects the Company’s earnings per share calculations by increasing the loss attributable to common stockholders to the extent that it is not anti-dilutive. As a result of the BCF, the Company recorded a $2,500,000 non-cash deemed dividend for the quarter ended September 30, 2018.

Capital Stock

Capital Stock	9 Months Ended
	Sep. 30, 2018
Equity [Abstract]
Capital Stock	Note 10 — Capital Stock During the nine months ended September 30, 2018, the Company issued an aggregate of 4,384,664 shares of the Company’s common stock at $0.75 per share for gross proceeds of $3,288,498, $597,000 of which were received in October 2018, and $400,000 was received prior to January 1, 2018. During the nine months ended September 30, 2018, the Company issued 91,177 shares of the Company’s restricted common stock for gross proceeds of $232,500 under a License agreement with the third party. (See Note 12, Commitment and Contingencies, Memorandum of Understanding). During the nine months ended September 30, 2018, the Company issued an aggregate of 60,518 shares of the Company’s common stock in exchange for professional services valued at $99,992. During the nine months ended September 30, 2018, the Company issued 85,714 shares of the Company’s restricted common stock valued at $150,000 under a Stock Exchange Agreement. For additional information, see Note 7, Available for Sale Securities,

Warrants and Options

Warrants and Options	9 Months Ended
	Sep. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Warrants and Options	Note 11 — Warrants and Options Warrants Prior to the reverse merger with Red Earth, the Company had issued warrants as compensation for consulting services. The warrants expire between June 2019 and October 2019. The following table summarizes all stock warrant activity of the Company for the nine months ended September 30, 2018: Weighted Avg. Exercise Shares Price Balance at December 31, 2017 166,665 $ 5.88 Issued — — Exercised — — Expired — — Balance at September 30, 2018 166,665 $ 5.88 Options On July 1, 2018 the Company entered into a Corporate Advisory Agreement (“Advisory Agreement”) with a New York City based consulting company (the “Consultant”) to provide business management, corporate compliance and related services to the Company and its subsidiaries. The Advisory Agreement granted to the Consultant an option to acquire up to 10,000 additional shares of the Company’s common stock at an exercise price of $1.20. The options have term of 3 years. The fair value of these stock options was determined to be $6,736 using the Black-Scholes Merton option-pricing model based on the following assumptions: (i) volatility rate of 199%, (ii) discount rate of 0%, (iii) zero expected dividend yield, and (iv) expected life of 3 years. The following table summarizes all stock option activity of the Company for the nine months ended September 30, 2018: Weighted Avg. Exercise Shares Price Balance at December 31, 2017 — $ — Issued 10,000 1.20 Exercised — — Expired — — Balance at September 30, 2018 10,000 $ 1.20

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 12 — Commitments and Contingencies Termination of Advisory Agreement In September 2018, the Company terminated the Advisory Agreement pursuant to its terms and paid to the Consultant compensation consisting of 25,000 shares of the Company’s common stock and a $6,000.00 cash payment. Operating Leases The Company leases an office facility and a production / warehouse facility under two non-cancelable operating leases that expire in May 2019 and June 2027, respectively. Future minimum rental and lease commitments under non-cancelable operating leases with terms in excess of one year as of September 30, 2018, are as follows: Amount Fiscal year ending December 31: 2018 $ 69,960 2019 249,090 2020 230,640 2021 230,640 2022 230,755 Thereafter 1,043,315 Total minimum lease payments $ 2,054,400 Rental expense is accounted for on the straight-line method. Deferred rent payable as of September 30, 2018 represents the excess of rent recognized in the financial statements over scheduled lease payments. Rent expense, including deferred rent expense of $203,754, incurred pursuant to operating leases for the nine months ended September 30, 2018 and 2017, was $99,188 and $0, respectively. Application Services Memorandum of Understanding We entered into a Memorandum of Understanding (the “MOU”) with an unrelated third party (the “Party”) in September 2018. Pursuant to the MOU, the Party and we agreed that, during the application period (September 7, 2018 through September 20, 2018), the Party agreed pay us the sum of $77,500 for each medical marijuana license jointly applied for in Nevada, up to three (3) licenses. The maximum owed to be paid to us pursuant to the MOU is $232,500, which was paid during the three months ended September 30, 2018. The Party was entitled to shares of our restricted common stock with a fair market value as of the trading day immediately preceding the date the first license application was submitted equal to $232,500. The Party and we agreed that the Party would hold a ten percent (10%) interest in each license applied for and granted by Nevada. The Party has agreed that, upon Nevada granting such license or a provisional license, it shall pay us $1 million to be used to construct and operate the dispensary contemplated by the license. In exchange, we agreed to issue to the Party additional shares of restricted common stock in the fair market value of $1 million using a 30-day moving average price. The Party was also granted a ten percent (10%) ownership interest in any such dispensary and will be entitled to an annual distribution equal to ten percent (10%) of the net profits of the dispensary. Litigation There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2018
Subsequent Events [Abstract]
Subsequent Events	Note 13 — Subsequent Events Filing of Registration Statement on Form S-1 On October 5, 2018, in accordance with the Company’s obligations under the Registration Rights Agreement, the Company filed a Registration Statement on Form S-1 (File No. 333-227735) (the “Registration Statement”) with the SEC to register 3,335,000 shares of the Company’s stock for resale. The Company filed Amendment No. 1 to the Registration Statement in response to comments received by the SEC. The SEC declared the Registration Statement effective on October 24, 2018. Purchase of Office Building On September 21, 2018, the Company, through its wholly owned subsidiary, Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada for $1,500,000, subject to seller financing in the amount of $1,100,000, at an interest rate of 6.5% per annum, utilizing a 30 year amortization schedule, regular monthly installments of $6,952.75 shall be payable on or before the same day of each month beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2023, at which time the entire sum of principal and accrued interest in the amount of $1,031,140 is due and payable. On or before the one-year anniversary, November 1, 2019, a principal reduction payment in the amount of $50,000 will be due. Upon the one-year anniversary of the note and, provided that the monthly payments and the principal reduction payment have been made, the payments will be recalculated and re-amortized on the same terms with a new scheduled monthly payment of $6,559.00. The Company closed the purchase on October 18, 2018. The building will be home to the Company’s business operations. In addition, the Company intends to lease the available portions of the building to other entities engaged in the regulated cannabis business. The Company moved into the building in November 19, 2018. Issuance of Common Stock On October 15, 2018 the Company issued 250,000 shares of common stock for services rendered in regards to our proposed strategic partnership with an Oklahoma license holder. Between November 6, 2018 and December 3, 2018 the holders of Preferred Stock converted 2500 shares of Preferred Stock into 3,335,000 shares of the Company’s common stock. On November 28, 2018 the Company issued 75,000 shares for services rendered to a member of our Advisory Board.

Warrants and Options (Tables)

Warrants and Options (Tables)	9 Months Ended
	Sep. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of warrants issued, exercised and expired	Weighted Avg. Exercise Shares Price Balance at December 31, 2017 166,665 $ 5.88 Issued — — Exercised — — Expired — — Balance at September 30, 2018 166,665 $ 5.88
Summary of stock option activity	Weighted Avg. Exercise Shares Price Balance at December 31, 2017 — $ — Issued 10,000 1.20 Exercised — — Expired — — Balance at September 30, 2018 10,000 $ 1.20

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Schedule of future minimum rental and lease commitments	Amount Fiscal year ending December 31: 2018 $ 69,960 2019 249,090 2020 230,640 2021 230,640 2022 230,755 Thereafter 1,043,315 Total minimum lease payments $ 2,054,400

Nature of the Business (Details

Nature of the Business (Details)	1 Months Ended	9 Months Ended
	Apr. 30, 2018ft²	Sep. 30, 2018	Apr. 18, 2018a
Nature of the Business (Textual)
Option to buy building for cultivation facility	17,298		3
Construction of area, description	We completed the construction of a 120,000 square-foot outdoor grow facility, including the construction of an 8,000 square-foot building and installation of required security fencing, meeting the State of Nevada building codes and regulations. Operation of this facility commenced in August, 2018. The Company will account for the biological assets at fair value as inventory in accordance with ASC 905 Agriculture. At September 30, 2018 the seedlings were in an immature state.
Bonus compensation to manager, description		The Manager is entitled to bonus compensation equal to 2 percent of gross yield sales in excess of $10,000,000 but less than $12,500,000; three and one-half percent of the gross yield sales in excess of $12,500,000 but less than $15,000,000; and, five percent of any gross yield sales in excess of $15,000,000. All bonus’ are payable in the form of the Company’s common stock.

Going Concern (Details)

Going Concern (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Going Concern (Textual)
Accumulated deficit	$ (4,708,331)	$ (362,521)

Prepayments and Deposits (Detai

Prepayments and Deposits (Details)	1 Months Ended	9 Months Ended
	Apr. 18, 2018a	Sep. 30, 2018USD ($)ft²a	Apr. 30, 2018ft²
Prepayments and Deposits (Textual)
Deposits		$ 386,416
Prepaid expenses		335,083
Condition of operator terminate sales agreement, description	The Company agreed to generate sales of at least $5 million per year from product cultivated from the outdoor cultivation facility. The Licensed Operator may terminate the agreement, in accordance with the terms of the management agreement, if it does not generate at least $5 million in annual revenues. Prior to the termination of the management agreement by the Licensed Operator, the Company may cure a breach of this provision by paying 10% of the revenue shortfall to the Licensed Operator.
Amount to paid from revenue, description	The Licensed Operator will (i) retain 15% of the net revenues generated from product cultivated from the outdoor cultivation facility and (ii) pay 85% of the net revenues to the Company. Upon execution of the management agreement, the Company paid $300,000 to the Licensed Operator as consideration for the opportunity to construct and manage the outdoor cultivation facility on the Licensed Operator’s property. In exchange for the initial consideration, the Licensed Operator agreed not to retain 15% of the first $2 million of net revenues generated from the outdoor cultivation facility. In addition, once the outdoor cultivation facility begins production, the Company has agreed to pay the Licensed Operator $7,000 per month for compliance, security, and other administration costs incurred by the Licensed Operator during the term of the agreement.
Licensed operator as prepaid expenses		300,000
Term of agreement	8 years
Area of land	3		17,298
Purchased goods from the seller		$ 2,000,000
Exclusive distribution agreement renewals description		The initial term of the Exclusive Distribution Agreement is for one year, with additional successive one-year renewals, subject to certain standard termination provisions. The Exclusive Distribution Agreement is subject to standard termination provisions; however, Healthier Choices has the option to terminate the Exclusive Distribution Agreement, on 30 days’ written notice, if the Company fails to purchase a sufficient minimum quantity of Q-Cups from Healthier Choices. The Company has met its obligations for the first year of the Exclusive Distribution Agreement through the payment of $2,000,000. Thereafter, for each renewal term, the Company’s minimum purchase obligation for Q-Cups is currently $500,000, subject to a good faith negotiation at the end of each year.
Percentage of gross sales of goods		5.00%
Bonus compensation to manager, description		The Manager is entitled to bonus compensation equal to 2 percent of gross yield sales in excess of $10,000,000 but less than $12,500,000; three and one-half percent of the gross yield sales in excess of $12,500,000 but less than $15,000,000; and, five percent of any gross yield sales in excess of $15,000,000. All bonus’ are payable in the form of the Company’s common stock.
Farm Road, LLC [Member]
Prepayments and Deposits (Textual)
Prepaid expenses		$ 50,000
Area of land | a		260
Office building [Member]
Prepayments and Deposits (Textual)
Prepaid expenses		$ 95,000
Area of land | ft²		10,000

Leasehold Improvements (Details

Leasehold Improvements (Details)	12 Months Ended
	Dec. 31, 2017USD ($)	Sep. 30, 2018USD ($)ft²
Leasehold Improvements (Textual)
Capitalized costs		$ 74,833
Area leasehold | ft²		17,298
Improvements on leasehold	$ 17,535
Leasehold Improvements [Member]
Leasehold Improvements (Textual)
Capitalized costs		$ 1,154,842

Intangible Assets (Details)

Intangible Assets (Details) - USD ($)	1 Months Ended		9 Months Ended
	Feb. 28, 2017	Oct. 31, 2016	Sep. 30, 2017
Intangible Assets (Textual)
Agreement amount received from seller			$ 300,000
Asset Purchase and Sale Agreement [Member]
Intangible Assets (Textual)
Agreement amount received from seller		$ 300,000
Deposit to seller		$ 25,000
Advanced received from investor	$ 350,000

Available for Sale Securities (

Available for Sale Securities (Details) - USD ($)	Aug. 13, 2018	Sep. 30, 2018	Dec. 31, 2017
Common stock in exchange, shares	2,500
Common stock per share		$ 0.001	$ 0.001
Stock Exchange Agreement [Member]
Shares acquired	1,500,000,000
Common stock in exchange, shares	85,714
Common stock in exchange, value	$ 150,000
Common stock per share	$ 0.0001	$ .0002
Unrealized gain		$ 150,000

Convertible Note Payable Due _2

Convertible Note Payable Due to Related Party (Details) - USD ($)	Dec. 15, 2017	Aug. 13, 2018
Convertible Note Payable Due to Related Party (Textual)
Conversion price		$ 0.75
Red Earth LLC [Member]
Convertible Note Payable Due to Related Party (Textual)
Convertible note payable amount	$ 900,000
Conversion price	$ 0.75
Percentage of accrues interest	0.50%
Sold of common stock per shares	$ 0.75
Related party transaction, percentage	50.00%

Preferred Stock (Details)

Preferred Stock (Details) - USD ($)	Aug. 13, 2018	Aug. 09, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Issuance of series A convertible preferred stock	2,500
Series A convertible preferred stock per share	$ 1,000
Beneficial ownership limitation blocker	4.99%
Conversion price	$ 0.75
Preferred stock deemed dividend			$ 2,500,000		$ 2,500,000
BCF, Description					The Preferred Stock as these shares were issued at $1,000 per share which, based on the Conversion Rate computes to a common share equivalent price of $.75 per share, which was less than the share price of the Company’s common stock at the time of issuance of $1.90 per share.
Securities Purchase Agreement [Member]
Issuance of series A convertible preferred stock		2,500
Aggregate value		$ 2,500,000
Series A convertible preferred stock per share		$ 1,000
Beneficial ownership limitation blocker		4.99%
Preferred stock is convertible into common stock		3,335,000
Conversion price		$ 0.75

Capital Stock (Details)

Capital Stock (Details) - USD ($)	Oct. 05, 2018	Nov. 28, 2018	Oct. 31, 2018	Sep. 30, 2018
Capital Stock (Textual)
Common stock exchange for professional services				25,000
Common stock in exchange for professional services, value				$ 6,000
Stock Exchange Agreement [Member]
Capital Stock (Textual)
Common stock sold and issued an aggregate				85,714
Gross proceeds from stock				$ 150,000
License Agreement [Member]
Capital Stock (Textual)
Common stock sold and issued an aggregate				91,177
Gross proceeds from stock				$ 232,500
Subsequent Event [Member]
Capital Stock (Textual)
Common stock sold and issued an aggregate	3,335,000
Received from stock amount			$ 597,000
Common stock exchange for professional services		75,000
Capital Stock [Member]
Capital Stock (Textual)
Common stock sold and issued an aggregate				4,384,664
Sale of common stock, price per share				$ 0.75
Gross proceeds from stock				$ 3,288,498
Received from stock amount				$ 400,000
Common stock exchange for professional services				60,518
Common stock in exchange for professional services, value				$ 99,992

Warrants and Options (Details)

Warrants and Options (Details)	9 Months Ended
	Sep. 30, 2018$ / sharesshares
Options [Member]
Warrants/Options:
Shares, Beginning Balance | shares
Shares, Issued | shares	10,000
Shares, Exercised | shares
Shares, Expired | shares
Shares, Ending Balance | shares	10,000
Weighted Avg. Exercise Price, Beginning Balance | $ / shares
Weighted Avg. Exercise Price, Issued | $ / shares	1.20
Weighted Avg. Exercise Price, Exercised | $ / shares
Weighted Avg. Exercise Price, Expired | $ / shares
Weighted Avg. Exercise Price, Ending Balance | $ / shares	$ 1.20
Warrant [Member]
Warrants/Options:
Shares, Beginning Balance | shares	166,665
Shares, Issued | shares
Shares, Exercised | shares
Shares, Expired | shares
Shares, Ending Balance | shares	166,665
Weighted Avg. Exercise Price, Beginning Balance | $ / shares	$ 5.88
Weighted Avg. Exercise Price, Issued | $ / shares
Weighted Avg. Exercise Price, Exercised | $ / shares
Weighted Avg. Exercise Price, Expired | $ / shares
Weighted Avg. Exercise Price, Ending Balance | $ / shares	$ 5.88

Warrants and Options (Details T

Warrants and Options (Details Textual)	Jul. 02, 2018USD ($)$ / sharesshares
Warrants And Options
Option acquire upto additional shares of common stock | shares	10,000
Strike price | $ / shares	$ 1.20
Term of options	3 years
Fair value of stock options | $	$ 6,736
Volatility rate	199.00%
Method used	Black-Scholes-Merton option-pricing model
Discount rate	0.00%
Expected dividend yield	0.00%
Expected life	3 years

Commitments and Contingencies_2

Commitments and Contingencies (Details)	Sep. 30, 2018USD ($)
Summary of future minimum lease obligation
2,018	$ 69,960
2,019	249,090
2,020	230,640
2,021	230,640
2,022	230,755
Thereafter	1,043,315
Total minimum lease payments	$ 2,054,400

Commitments and Contingencies_3

Commitments and Contingencies (Details Textual) - USD ($)	Sep. 20, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Commitments and Contingencies (Textual)
Deferred rent expense		$ 203,754		$ 104,565
Operating leases rent expense		$ 99,188	$ 0
Description of operating lease expiration		The Company leases an office facility and a production / warehouse facility under two non-cancelable operating leases that expire in May 2019 and June 2027, respectively.
Memorandum of understanding, description	The Party was entitled to shares of our restricted common stock with a fair market value as of the trading day immediately preceding the date the first license application was submitted equal to $232,500. The Party and we agreed that the Party would hold a ten percent (10%) interest in each license applied for and granted by Nevada. The Party has agreed that, upon Nevada granting such license or a provisional license, it shall pay us $1 million to be used to construct and operate the dispensary contemplated by the license. In exchange, we agreed to issue to the Party additional shares of restricted common stock in the fair market value of $1 million using a 30-day moving average price. The Party was also granted a ten percent (10%) ownership interest in any such dispensary and will be entitled to an annual distribution equal to ten percent (10%) of the net profits of the dispensary.
Application services issued, value		$ 232,500
Common stock consultant compensation, shares		25,000
common stock consultant compensation, value		$ 6,000
Party agreed to pay license amount		$ 77,500

Subsequent Events (Details)

Subsequent Events (Details)	Oct. 15, 2018shares	Oct. 05, 2018shares	Nov. 28, 2018shares	Oct. 31, 2018USD ($)	Sep. 21, 2018USD ($)ft²	Sep. 30, 2018shares	Apr. 30, 2018ft²	Apr. 18, 2018a	Dec. 31, 2017shares
Area of land							17,298	3
Shares of common stock, services						25,000
Preferred stock shares						2,500			0
Prescott Management, LLC [Member]
Area of land | ft²					10,000
Annual interest rate					6.50%
Purchase price | $					$ 1,500,000
Seller financing amount | $					$ 1,100,000
Description of subsequent event					Regular monthly installments of $6,952.75 shall be payable on or before the same day of each month beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2023, at which time the entire sum of principal and accrued interest in the amount of $1,031,140 is due and payable. On or before the one-year anniversary, November 1, 2019, a principal reduction payment in the amount of $50,000 will be due. Upon the one-year anniversary of the note and, provided that the monthly payments and the principal reduction payment have been made, the payments will be recalculated and re-amortized on the same terms with a new scheduled monthly payment of $6,559.00.
Subsequent Event [Member]
Seller financing amount | $				$ 597,000
Resale of shares		3,335,000
Shares of common stock, services			75,000
Subsequent Event [Member] | Between November 6, 2018 and December 3, 2018 [Member]
Shares of common stock, services	250,000
Converted preferred stock	2,500
Preferred stock shares	3,335,000