Hemp Inc (OTCMKTS:HEMP) is starting 2016 trading near its 52 week lows. While the weak overall stock market is hurting Hemp, the stock has been on a downtrend for quite some time now. However, we at Insider Financial think there are some positives on the horizon that could signal the low is either already in or close at hand. Most importantly is the fact that the decortication line will be fully operational by the second quarter of 2016.One of the problems with Hemp is that it's been one of the most hyped names on the OTC markets. Now that's saying something. CEO Bruce Perlowin has been a master at promoting Hemp with endless press releases. The key is separating the facts from all the hype.The one thing that he has done right is positioned Hemp properly in North Carolina. The North Carolina General Assembly said:
"That it is in the best interest of the citizens of North Carolina to promote and encourage the development of an industrial hemp industry in the State in order to expand employment, promote economic activity, and provide opportunities to small farmers for an environmentally sustainable and profitable use of crop lands that might otherwise be lost to agricultural production. The purposes of this Article are to establish an agricultural pilot program for the cultivation of industrial hemp in the State, to provide for reporting on the program by growers and processors for agricultural or other research, and to pursue any federal permits or waivers necessary to allow industrial hemp to be grown in the State."
After Governor Pat McCrory chose not to veto the legislation, it became law on October 31. Farmers in North Carolina now have the option to cultivate hemp crops with easy access to Hemp's multipurpose industrial hemp commercial processing facility in Spring Hope, NC. Bruce Perlowin's decision to bank on North Carolina really paid off for Hemp. Hemp's multipurpose industrial hemp processing facility in Spring Hope, North Carolina will process hemp to sell to textile manufacturers and other users. This commercial decortication facility is also the only one in the U.S. that will be able to process raw hemp or kenaf on a large scale.Hoping to drive demand for hemp is the National Hemp Association, which is embarking upon a national federal campaign to help make hemp legal across the country. The organization's goal is:
"Taking hold of this growing momentum with Congressional awareness of industrial hemp at historic high levels, now is the time to act. Likewise, hemp businesses are taking off with new companies creating innovative uses of hemp in functional foods and drinks, CBD-infused health and beauty products, hemp-based bio-plastics, hemp construction materials for homes and buildings, and hemp American flags."
Still the best place for a Hemp operation is in North Carolina. For one, the farmers in North Carolina are looking for a new cash crop. Their primary cash crop is tobacco; however, there is less and less demand for tobacco. Furthermore, more tobacco is being farmed offshore more cheaply and that's hurting the average North Carolina farmer. Hemp is exactly what they're looking for.The latest update on the decorticator plant came from Hemp COO David Schmitt last month in Colorado. He said:
"We own the largest natural fiber decorticator in the USA. There are two in France and two in South Africa. Since May 2015, we've been reassembling it. Even though hemp is legal in North Carolina, there's still a lot of work to do because we still have to set up a commission to regulate it (i.e., how to bring seed into the state and what that entails). We are very optimistic we can have seed in the ground come April of 2016. Until that happens, we will process kenaf through next year and then beginning 2017. Once we convert the line from kenaf to industrial hemp, we won't go back to processing kenaf."
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By the end of 2016, Hemp plans on employing 100 workers at its North Carolina decorticator plant. While the company has disappointed investors in the past, we think things are about to turn around for Hemp. This is why shares are due for a bounce. Get the latest on Hemp by signing up for our email alerts. We'll update our subscribers as soon as we get the latest from Hemp. Don't miss out!
Disclosure: We have no position in Hemp either long or short. We were not compensated for this article.
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