Where is the Safety Net for Hemp Inc (OTCMKTS:HEMP)?

Where is the Safety Net for Hemp Inc (OTCMKTS:HEMP)?

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The spiral has been persistent for shares of Hemp Inc (OTCMKTS:HEMP), which only spiked briefly during the runup to the signing of the 2018 US Farm Bill, despite quite an on-the-nose idea of a catalyst for this stock given its strong new allowances for the hemp market. To put more meat on the bone, the company just announced that it has agreed upon a stock share with Gunpowder Capital Corporation, a Canadian merchant bank and advisory services firm.

According to the release, “The stock share will be Gunpowder Capital Group’s first foray into the hemp industry. Seeing the high demand for hemp throughout the United States, both companies agree that with the opening of enormous opportunities in the hemp industry through the 2018 U.S. Farm Bill, the market is going to experience great growth through the coming months and years.”

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 announced that it has agreed upon a stock share with Gunpowder Capital Corporation, a Canadian merchant bank and advisory services firm.

The chart shows -8% stripped out of share values of the stock over the past week of action. Moreover, the name has witnessed a pop in interest, as transaction volume levels have recently pushed 16% beyond what we have been seeing over the larger time frame.

“With the increased focus on the hemp industry throughout the United States, and even the world, Hemp, Inc. is happy to be the first to welcome Gunpowder Capital Corporation into this evolving industry,” said Hemp, Inc. CEO Bruce Perlowin. “Since the legalization of hemp in the Farm Bill in 2018, we have seen states pull out every stop to help get their farmers growing hemp as soon as possible to allow for increased income and jobs to fill the demand. There is no better time to enter this industry than today.”

Currently trading at a market capitalization of $18.1M, HEMP has a bankroll ($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%. We will update the story again soon as developments 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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