Hemp Inc (OTCMKTS:HEMP) stock has been on a tear over the last few sessions. The industrial hemp industry is one of the fastest growing industries in America, along with its distinct counterpart, marijuana, and Hemp Inc (OTCMKTS:HEMP) is working to position itself in this hybrid niche sub-sector of cannabis.
The American attitude on marijuana usage has been undergoing a seismic shift over the past couple of years as more states are legalizing it, and realizing the economic benefits of legalization. Like its conservative cousin (industrial hemp), marijuana is big business. Small growers, advocates, and big businesses are positioning themselves for the logical growth trajectory.
Hemp Inc (OTCMKTS:HEMP) is in IH (Industrial Hemp) and shares have been trading in a range for a year. This is not unusual for the IH sector to trade differently than the cannabis sector itself, Industrial Hemp (IH) should have a delta to cannabis itself as the revenues will eventually explode becoming low margin cash flow with a growing top line revenue number. This explains why IH is flat versus the huge price appreciation that occurred across the cannabis sector.
HEMP is a micro cap at the moment, but I like the fact they are a hybrid grower with a commodity angle, this way investors and analysts can view them separately. Developing a niche is critical at the early stages of a developing market.
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$HEMP 10-Day Chart Below:
The company executives are pleased to report on the progress of its industrial hemp processing facility in Spring Hope, North Carolina.
According to David Schmitt, COO of Hemp, Inc.’s wholly owned subsidiary, Industrial Hemp Manufacturing, LLC, the mechanical installation of the bale shredder was completed last week. “This system starts with a very large metal detection system to insure that there are no metal objects in any of the bales of kenaf or hemp. If the metal detector senses anything metallic, it will shut the system down. This is a safety feature to insure no metal goes into the milling system.”
Schmitt continued, “Next, the bales go up an incline conveyor into the shredder. Here the material is reduced in size to a 1-inch particle. It is then carried on a conveyor into the first stage of the milling operation. We have now started to run conduit and wiring to all of the electric motors on the shredding system. I am anticipating about two weeks to complete the electrical work. The milling operation will then be able to run in a fully automatic mode and we will begin processing the 18 million pounds of kenaf we have in inventory. We have been running the milling operation in a manual mode to confirm operation of all of the motors, sensors, filters, rotary valves, etc. All of the machinery is working properly.”
The company is working to get their hemp seed into North Carolina so that the first hemp crop can be planted in the next few weeks. “Our Nuaxon super critical CO2 extraction machine is scheduled to be delivered next week. We must then build a GMP compliant building to house the extraction unit as well as all of the post processing equipment. Once this is done, we will begin installation and commissioning of the extraction machine to begin producing CBDs,” said Schmitt.
The North American marijuana market posted $6.7 billion in revenue in 2016, up 30% from the year before. U.S. legal sales could reach $50 billion by 2026. Colorado has collected more than $150 million in taxes from legal marijuana sales, including nearly $50 million from a specific excise tax that directs funds to school construction projects. The first $40 million collected annually from the excise tax is earmarked for the school projects.
Fifty-seven percent of Americans supported legalizing marijuana in 2016 compared to just 52 percent of the country in 2014. Support for legal cannabis has been steadily increasing among Americans since 2006 when it reached 35 percent.
By 2020 it is estimated that country-wide legal marijuana sales will generate more annual revenue than the National Football League. Cannabis is the largest cash crop in the United States, exceeding corn and wheat combined. The first e-commerce transaction to take place on the Internet was the sale of cannabis. The take away here is, this is getting huge fast, and is one of the most exciting times ever for modern traders.
In Colorado, medical marijuana dispensaries outnumber Starbucks locations three to one. Hemp, Inc. (OTCMKTS:HEMP) is looking to carve out a niche for themselves, and right now they are just a small ($6M marketcap) part of the industry, but worth watching as we see an industry getting ready for a revenue growth spurt. 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!
