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Sunday, October 25, 2020

Hemp Inc (OTCMKTS:HEMP) Jumps the Shark

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Hemp Inc (OTCMKTS:HEMP) has jumped the shark in terms of a penny stock working to use press releases to push its share price higher. To wit: HEMP recently did something we think is quite interesting and we have never seen before, and we ask for you to put on your best thinking socks and glare skeptically with us. Here was its announcement from 9 days ago: “…after 3 1/2 years, millions of dollars spent on purchasing, disassembling, transporting, reassembling, rebuilding, refurbishing, beta testing and debugging, the largest multipurpose industrial hemp processing facility in the Western Hemisphere is now operational and is processing its first product. The milestone coincides with Hemp, Inc.’s installation of its NuAxon Tech CO2 Supercritical Extractor, the planting of hundreds of acres of industrial hemp and high CBD hemp in North Carolina, Kentucky, Colorado, Nevada, and Oregon and the successful establishment and ongoing monthly hemp educational seminars via The Hemp University at Louisburg College in Louisburg, North Carolina. Executives were ecstatic to see the mill processing and packaging for the first time after a laborious 3+ years.”

Now here is what the company announced just 2 days ago: “after 3 1/2 years, millions of dollars spent on purchasing, disassembling, transporting, reassembling, rebuilding, refurbishing, beta testing and debugging, the largest multipurpose industrial hemp processing facility in the Western Hemisphere is now operational and is processing its first product. The milestone coincides with Hemp, Inc.’s installation of its NuAxon Tech CO2 Supercritical Extractor, the planting of hundreds of acres of industrial hemp and high CBD hemp in North Carolina, Kentucky, Colorado, Nevada, and Oregon and the successful establishment and ongoing monthly hemp educational seminars via The Hemp University at Louisburg College in Louisburg, North Carolina. Executives were ecstatic to see the mill processing and packaging for the first time after a laborious 3+ years.” Before you work to compare, they are identical.

Hemp Inc (OTCMKTS:HEMP) was founded in 2008. The company’s information is somewhat erratic and difficult to parse through – a bit like its CEO.

However, we can get a broad idea of the goals and operations from their materials. But some of this information, particularly with this company, needs to be taken with a grain of salt.

As they frame the message, the company’s long-term goal is “to be the leader in the industrial hemp industry in America”. That goal is no doubt advanced further with the onlining of its processing facility.

Hemp Inc understands its mission to be a provider of “green solutions that help make the world a better place to live. We support products that are eco-friendly, organic, healthy, and solutions that replace many petroleum-based products.”

“Hemp Inc.’s wholly owned subsidiary Industrial Hemp Manufacturing, LLC purchased the largest decortication plant in North America, which is located in Spring Hope, North Carolina. The plant is housed in a 70,000,000 square foot warehouse on 9 acres. The company will start producing fiber, loss circulation materials (LCM) and absorbents from kenaf and later from hemp.”

That narrative continues forward to include the concept that “Hemp, Inc. will produce a product for drilling rigs called “lost circulation material” (LCM), which is used for maintaining the seals when drilling for water, oil, gas, and any other liquid or gas. This product alone is capable of producing millions of dollars in revenue, since some of the largest oil companies in the world will be our primary customers.”

“Eventually, the company will produce fiber materials for the paper and fabric industries, and other industries that utilize materials from hemp to make products such as plastics, building materials, health and beauty related products and more.” In other words, the concept of “diversified applications for hemp as an industrial material” is the paramount idea.

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As noted above, HEMP has recently fired up the engines of its hemp processing plant. In its first press release, the company’s own communications department titled the release, “Hemp Inc.’s Sensational Breaking News”. To properly capture the spirit of this move, imagine if your name was Paul Smith, and you worked for a large company, and the HR department asked you to write a quick blurb for the company’s internal newsletter about your team’s completion of a project to make the TPS reports paperless. And you submit a blurb entitled, “Paul Smith, the Most Awesome Employee, Announces a Spectacular Achievement of Greatness!”

We’ve never seen a press release with that type of overt and tactless sensationalism. And now, to vastly compound that sense of insecure desperation, the company has actually re-released the exact same announcement a week later. This is also something we have never seen before. This time, the title is toned down. But the effect is distracting. Had the company simply announced the activation of the mill as a simple, clean, straightforward press release, it might have gotten more mileage. Instead, one is left with a sense of needing to figure out what is wrong here. Because something must be, or they wouldn’t seem so desperate to impact the share market with the news. Indeed, a quiet version of this release would signal that maybe insiders are still hoping to accumulate and would thus prefer shares stay cheap a bit longer.

Instead, the company appears to be trying with all its might to suck in investors. That’s generally not a reassuring feeling.

Currently trading at a market capitalization of $7.67M, Hemp Inc reports about $469K in cash on the books, which is balanced by about $7.5M in debt – most of it booked as long-term obligations. The company has very nominal revenues at this point – a fact which new investors are betting will be changing in the very near future. We will update the story again soon as developments transpire. For continuing coverage on shares of $HEMP stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next breakout pick!

Disclosure: We hold no position in $HEMP, either long or short, and we have not been compensated for this article.

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