Mountain High Acquisitions Corp (OTCMKTS:MYHI) is a tiny play in the cannabis space that has become the latest mysterious sudden explosion on the charts. There is likely some factor unknown to us at present – either an aggressive investor awareness campaign that slipped our attention, or something coming together in the form of an IPO of a subsidiary. But what we do know is this: the cannabis space continues to be red hot, and this stock has a tiny float. It doesn’t take much under those conditions to get a squeeze underway.
In all, the chart shows 550% tacked on to share pricing for the company in the past month. Market participants may want to pay attention to this stock. MYHI has evidenced sudden upward volatility on many prior occasions. What’s more, the name has benefitted from a jump in recent trading volume to the tune of a bit less than 410% over the long run average. Traders should note this as important with the stock trading on a float that is extremely small at just shares. One is wise to respect the dynamic this may create — a restricted trading float and a jump in trading volume can crimp supply and push share prices higher.
Mountain High Acquisitions Corp (OTCMKTS:MYHI) trumpets itself as a company that focuses on the commercial hemp and CBD products industries.
A diversified holding company focused on the acquisition and development of businesses within the hemp and CBD nutraceutical sectors, the company’s wholly owned subsidiary, GreenLife BotaniX, Inc. (www.greenlifebotanix.com), is a California-based developer and marketer of the “SuperCBD” brand of CBD hemp oil infused nutraceutical products.
Freedom Seed and Feed, Inc., also a wholly-owned subsidiary of the Company, is an innovative Kentucky-based industrial hemp cultivation, processing, and marketing company. In 2014, Michael Lewis, COO of Freedom Seed and Feed, became the first federally permitted private citizen to farm hemp in the United States since 1937.
MYHI is based in Scottsdale, Arizona.
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Speculation will no doubt run rampant about this stock until something hits the wires, either in the form of a management comment – “we don’t know why the stock is acting like this” – or something that explains to the rest of the world why a handful of people are charging into this stock right now.
But, whatever the story turns out to be, we know that the furious pace set by many stocks in the marijuana business last Fall looked similar to this action. And this stock did not really participate then.
The momentum in the space is built on solid footing for the most part.
The regulated cannabis market in the United States is projected to reach more than $7 billion for 2016, when all the books have been counted up. That’s according to a report by New Frontier and ArcView Market Research. That represents 26% growth over the previous year, driven largely by adult recreational sales of marijuana. Regulated adult recreational marijuana sales topped $998 million in 2015 compared to $351 million in 2014 — growing 184% year-over-year.
In addition, according to Cowen & Co., the fact that California legalized on a recreational basis in November will likely push the overall legal sales footprint of pot in America to over $20 billion.
Naturally, this is about more than just the US. In Canada, the story may be even more compelling. Legislation is likely to be on the table sometime this year to fully legalize pot on a national basis for all conceivable consumers, according to a promise made by the country’s PM Trudeau.
Hence, while we know something will likely break onto the scene for MYHI as a scapegoat for the recent extreme momentum, we should keep in mind that this type of monstrous sector tailwind, mixed with thin trading conditions and a tiny float, is an explosive combination.
At this time, carrying a capital value in the market of $11.5M, MYHI has virtually no reserve of cash on the books, which compares with a small mountain of debt ($416k). The company is pre-revenue at this point. Nonetheless, for traders, this may be a very interesting story and we will look forward to updating it again soon. For continuing coverage on shares of $MYHI stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!