Hemp Inc (OTCMKTS:HEMP) Bogged Down by Marijuana Legislation

Hemp Inc (OTCMKTS:HEMP) Bogged Down by Marijuana Legislation


Hemp Inc (OTCMKTS:HEMP) continues to pull back in recent trade. We sounded the alarm on this one a couple weeks ago, suggesting that it may have “jumped the shark” in terms of its goals and attempts at taking advantage of worrisome trends in US federal level support for marijuana legislation at the state level. That said, this is an industrial hemp play, at least nominally, and should not be lumped in with the cannabis space. So, it has some justifiable ground when confronting the potential that investors are selling shares in reaction to AG Jeff Sessions moves on marijuana.

That said, we still would like to see some real steps taken here to foster actual sales growth, which remains an elusive goal for a company that has been around for many years without tangible financial success. That hasn’t stopped this organization from remaining extremely aggressive on the PR front. As a case in point, the company just announced that its executives gained national and local media coverage for their insight on the latest developments in the hemp regulatory landscape, which are detailed in its latest communication.

Hemp Inc (OTCMKTS:HEMP) was founded in 2008. The company has a reputation as one of the more controversial enterprises, even by the standards of either the OTC or the cannabis patch, which certainly paints a picture.

In any case, the company is making strong strides toward reshaping its image as a legitimate emerging leadership play in the industrial hemp space.

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, while the company oscillates back and forth in terms of its expressed desire to be associated with the cannabis complex, executives made clear its affiliation with the industrial hemp space, as well as the advantages of that association as a primary identity in its latest round of investor communication.

According to the release, “Hemp, Inc. executives have been reinforcing that its company is a “safe bet” for investors.  Hemp is NOT marijuana.  Hemp, Inc.’s huge inventory of approximately 18,000,000 pounds of kenaf, plus approximately 2,000,000 pounds of kenaf to be harvested early this year has a well-established supply chain and will not be affected by any potential marijuana pushback by the federal government.”

David Schmitt, COO of Industrial Hemp Manufacturing, LLC., a wholly owned subsidiary of Hemp, Inc., provided comment to The Hemp Mag in a Jan. 10, 2018, article about the recently introduced Industrial Hemp Banking Act, which could lessen the difficulty of hemp businesses to obtain banking and other financial services. Schmitt says Hemp, Inc. supports the act and praises local farmers in North Carolina and nationwide who are “breathing new life into generations-old family farms through incorporating hemp into their crop rotation.”

At this time, carrying a capital value in the market of $21.5M, HEMP has about $258K in cash on the books, which stands against roughly $6.2 million in liabilities. The company has pulled in $55k in TTM revenues. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $HEMP stock, as well as other hot stock picks, get 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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