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Hemp Inc (OTCMKTS:HEMP) Rising Again

Hemp Inc (OTCMKTS:HEMP) Rising Again
Written by
Aaron Smith
Published on
November 1, 2016
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Hemp Inc (OTCMKTS:HEMP) has come alive once again as the first publicly-traded marijuana company attempts to shake off the dust after a problematic year. It’s safe to say that CEO Bruce Perlowin hasn’t had a particularly good few months, but the election season is a potential catalyst for cannabis stocks.HEMP was the first publicly-traded medical marijuana company. It came about in 2009 through a reverse merger after Perlowin saw himself featured in a CNBC documentary called Marijuana Inc. Perlowin is an ex-con that spent 9 years in prison for drug smuggling and is known as the ‘King of Pot’.In June 2016 HEMP got slammed on the news that the SEC charged Perlowin with investment fraud. The SEC alleges the Perlowin has been purportedly committing a long-running fraud by selling hundreds of millions of shares of restricted stock on the open market. It was stated that the company never filed a registration statement with the SEC and the purportedly unrestricted stock that was sold to investors was, in fact, restricted.It may be such that Perlowin steps down and there is a change in management. This is not the first time that a CEO would step down. Just this year, John Stumpf, the CEO of Wells Fargo, and Priceline CEO Darren Huston both abruptly resigned immediately following scandals.HEMP’s core business seems to be fundamentally strong and making strides. HEMP just announced one of Nevada's first commercial hemp harvests. The experimental 43-acre hemp crop is one of the first hemp crops to be grown in Nevada since the cultivation of hemp was legalized in the state. The hemp has grown in high desert climate and is expected to be ready to harvest by the end of this week. By this experimental hemp crop being grown in less than favorable climate conditions, it shows how lucrative this 'cash crop' would fare in Nevada.

"Hemp farming is so important. For instance, a lot of people may not know that hemp can end our voracious dependency on carbon producing, non-renewable resources like fossil fuels, lumber and plastic; and that for every ton of hemp that is produced, 1.63 tons of carbon is removed from the air, making hemp an environmentally responsible crop to grow; or that hemp seed is considered to be one of the most delicious, easily digestible, balanced and complete sources of protein and essential fatty acids found in nature. I could go on and on about the benefits of hemp," stated William Billings, commonly known to many as "Wild Bill," a widely recognized organic hemp farmer.

The latest news from HEMP is that the company will purchase raw hemp that is to be harvested in eastern North Carolina, approximately seventy-five miles from Hemp, Inc.'s 70,000 square foot multi-purpose industrial hemp processing facility in Spring Hope, North Carolina. The industrial hemp crop is to be grown on between 1,000 and 1,500 acres of land and harvested toward the end of next year, 2017. HEMP also said that its decortication facility is in the final stages of completion and should be operational very soon.This is an election season play with 9 states voting on medical or adult-use recreational marijuana. In a recently released analysis of the industry, Cowen & Co. stated that the present market is worth $6 billion. Over 32 million adults have admitted to smoking marijuana and there are 8 million daily users. It’s expected that legal sales of marijuana represent a $50 billion market. This represents a year-over-year compound annual growth of 25% annually over the decade representing an investment opportunity that may only come once in a lifetime.HEMP’s balance sheet is reasonably strong, as the company has $1mm in current assets, including $86K in cash, $570K in short-term investments and $308K in inventory. It made $107K on $381K in revenue last quarter. Total assets are $6.8mm including $5.7mm in equipment. Total liabilities are $219K. Consequently, the Equity (Assets less Liabilities) is $6.6mm.At the present price, HEMP has a market valuation of $12.6 million. It's been one of the most liquid of the pot stocks with an average daily volume that has been 400% above its 30-day moving average of 15mm shares. As the company works its way through these issues and with the election around the corner, this may be an opportune time to establish a position, but tread carefully. We will be updating our subscribers as soon as we know more. For the latest updates on HEMP, sign up below!Disclosure: We have no position in HEMP and have not been compensated for this article.

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