Danger may lie ahead for shares of Hemp Inc (OTCMKTS:HEMP), if the technical pattern relative to the recent catalysts is to be taken into account. We are now seeing a bearish descending triangle following news that the company just provided its 2018 Year-In-Review. According to the release, “As a global leader in the industrial hemp industry with bi-coastal processing centers including the largest multipurpose industrial hemp processing facility in the western hemisphere (in Spring Hope, North Carolina), Hemp, Inc. recaps its key business developments, increased media coverage, and speaking engagements in 2018.”
“I am incredibly proud of all that our team accomplished in 2018,” said Hemp, Inc. CEO Bruce Perlowin. “Hemp, Inc. was at the center of news coverage (including Forbes) surrounding the legalization of hemp that came with the historic passage of the 2018 Farm Bill.”
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, HEMP just provided its 2018 Year-In-Review. Even in light of this news, HEMP has had a rough past week of trading action, with shares sinking something like -9% in that time.
That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -28% following the passage of the Farm Bill in December.
“This historic event in our nation’s industry created and will continue to create a tremendous amount of opportunities for the small family farm, local communities, the U.S. economy, and a myriad of industries,” Perlowin continued. “At the same time, I continued to travel the country meeting with farmers who are growing hemp or wanted to learn more about this incredibly valuable crop. In the coming year, I look forward to building upon our success and accomplishments as we continue to rapidly expand our footprint and bring new hemp products to market.”
At this time, carrying a capital value in the market of $24.13M, HEMP has a chunk ($1.4M) of cash on the books, which must be weighed relative to about $1M in total current liabilities. One should also note that debt has been growing over recent quarters. HEMP is pulling in trailing 12-month revenues of $400K. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 248.3%. This may be a very interesting story and we will look forward to updating it again soon. 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.