Hemp Inc (OTCMKTS:HEMP) Playing the Long Game


Hemp Inc (OTCMKTS:HEMP) is a penny play that we have been hot and cold on – but mostly cold. That’s not to say there isn’t something like here. In fact, that’s almost the bigger point: even when there’s something to really like, the stock acts like it’s wearing a soaking blanket. If it’s ever going to shed that blanket, it will probably be because of a change in the meaning of “hemp” on a broad cultural basis. And I’m not just talking about legislation here. It’s more about education and pervasiveness.

Frankly, it appears as though Bruce Perlowin, the company’s CEO, knows that all too well. He is frequently more of an evangelist than an operational helmsman. The company’s latest catalyst is right in that vein: The company just held its first, sold-out, educational symposium (Farming HEMP for Profit), through its Hemp University. We will cover some details below. But first, if you aren’t already familiar with the company, here is a quick overview.

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”. The company 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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Looking back at the Hemp University event, it was reportedly a huge success “with 100 attendees who rated the quality of information presented as excellent.”

According to the release, the symposium, which took place on Saturday, March 18, was a one-day educational opportunity for landowners and farmers to receive a “specific step-by-step blueprint” on how to grow, sell and profit from farming industrial hemp by using real business tactics and principles, presented by industry experts.

In this vein, one might see the utility of HEMP’s corporate investment in this process. If Hemp farming becomes a more mainstream concept, with an identity dominated by Hemp, Inc., then the value of its assets and operations multiplies.

In other words, this is a marketing and promotional campaign under the guise of an educational seminar. But that’s okay. The lines often get blurry. The bigger point is that this strategy is a so-called “long game”, and they’ve been playing it for awhile already. It’s not impossible that we will start to see some signs of a critical mass reached. But so far, the stock itself isn’t showing a whole lot to be excited about.

According to executives, the next Hemp University symposium has been scheduled for April 29. The release notes that it is already half sold out, despite the fact that the time and location have yet to be determined.

As noted in the release, with such a large turnout for the first symposium, executives expect the next one to have an even larger participation of those seeking to learn about “organic certification, potential licensing fees, what’s happening with industrial hemp in different states around America, high CBD strains and different CBD extraction technologies, marketability of the crop, and more.”

At this time, carrying a capital value in the market of $24.6M, HEMP has about $98K in cash on the books, which compares with roughly $173K in total current liabilities. The company posted no revenues in its last reported quarter. Naturally, we will continue to keep an eye on this one, and will let you know as soon as we see something new worth covering. 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 hot stock pick!



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