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Get Out Of Hemp Inc (OTCMKTS:HEMP) While You Can

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Perhaps no other name has personified the pot stock boom and bust more so than Hemp Inc (OTCMKTS:HEMP) CEO Bruce Perlowin. He relished his role as the “King of Pot” and touted his background as a former drug smuggler who served nine years in prison. Well, it seems he never outgrew his old ways as the SEC charged Hemp Inc, Bruce Perlowin, and others with a “long-running and profitable scheme resulted in the sale of hundreds of millions of unregistered and purportedly unrestricted Hemp shares to public investors. The execution of this scheme involved, among other things, purported gifts and consulting agreements that do not appear to have been bona fide and fraudulent statements made to Commission-registered broker-dealers.”

While Bruce Perlowin and his associates were enriching themselves, shareholders of Hemp have been devastated resulting in tens of millions of dollars of losses. Here is the long-term chart of Hemp and you can see the damage done.

hemp 6.22

The sad part is that Hemp was actually making some progress. Last month and after months of waiting, Hemp Inc finally produced its first environmentally friendly product-to-market from the company’s new decortication plant in Spring Hope, North Carolina. This was a pretty big deal for HEMP and its investors as the company has basically bet the ranch on this plant and the state of North Carolina. We told investors back in February that the company was making a comeback and things were finally starting to come together.

Getting product to market was indeed the first step for HEMP. We have been critical of the company at times in the past due to its endless stream of press releases built on hype and very little substance. Finally, the company put out one that had nothing to do with legislation in other states or anything else to do with hype surrounding the benefits of hemp and its market potential. The problem as we later found out came from one of our loyal readers Rolling O Research who said:

While HEMP may now be able to bag milled kenaf that the company received when it bought the plant at a bankruptcy auction, the decorticator isn’t running yet, they’ve made no mention of the start of the assembly of the MacTavish line that separates decorticated kenaf core from various impurities, nor has it actually assembled the mill. Knowing how HEMP issues videos on just about everything it does, we’ve yet to see videos showing any progress on the MacTavish or milling portion of the plant (except for the installation of the silo). We have also not seen evidence of the installation of any of the thousands of feet of ductwork that both keeps dust out of the air and moves material around the plant. No, HEMP is working hard to give the impression that the plant is somewhat operational, but once they package the SpillSuck they have on hand, they won’t be able to make more for quite awhile, because the plant isn’t close to full operation. They put out PRs and videos on every little milestone, yet they’ve stopped discussing progress on the decorticator and never mentioned starting reassembly of the MacTavish line, and have shown no photos of the milling machinery beyond the silo. Each of the two remaining phases were estimated to take 60 – 90 days each.

Currently trading with a market cap of $11 million, Hemp and Perlowin are facing numerous fraud charges from the SEC. With just $755k in total assets, we don’t see how the company can fight the SEC and upcoming shareholder lawsuits. Perlowin will most likely be banned from the industry and it will be a battle to collect funds from him. Even if the argument is that shares were sold into the market and used to fund Hemp operations, shareholders did not benefit as Hemp and Perlowin burned through money like water. In the past three years, Hemp posted combined losses of more than $12 million. At the current time, we don’t see how this ends well for Hemp shareholders. All we can say is don’t be left holding the bag and to get out while you still can.

We will be updating Insider Financial as soon as we know more. For continuing coverage on HEMP, sign up for our free newsletter today and get our next hot stock pick!

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Disclosure: We have no position in HEMP and have not been compensated for this article.

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Get Out Of Hemp Inc (OTCMKTS:HEMP) While You Can
18 Comments

18 Comments

  1. Steve Farac

    June 23, 2016 at 1:58 am

    I ended up, over time buying 50,000 shares of HEMP and over time quietly losing value till today, 6/22 when the floor dropped out. What should I do? Sell and take a loss? Be hopeful that things will turn around with new management? You mentioned upcoming shareholder lawsuits, would I be a part of them; and if so, does selling or keeping shares affect my position in the upcoming lawsuits? I really believed the hype that HEMP was putting out regarding the building of the 1st decertification plant in the USA. I felt this was a great product to get in on, at the ground floor. There are so many states opening up the opportunity for farmers to grow and later have hemp processed. HEMP seemed to be taking the lead. Can any company come in, take over and make this dream work?

    • Adam Hennessy

      June 23, 2016 at 2:31 am

      I’m no lawyer nor a financial adviser, but I play one on tv. If he was doing illegal things that falsely represented the shares they were selling you at that time, it is likely that that is where you would have damages, thus that would be something you may be able to sue over or join in a class action. Selling now to get out any money you can is probably wise…because it could all drop to nothing. On the flip side, a penny stock dropping rapidly means a company can be purchased for pennies on the pennies so you could see a legitimate or illegitimate company express interest in a buyout…but I wouldn’t hold my breath, and moving to cash as quickly as possible will likely minimize any further risk. If it is getting bought and the price starts climbing, then you’ll have cash to buy in again.

      Do not average down aka don’t try to catch a falling knife (and with penny stocks I would go further and consider the knife falling towards a balloon, it could bounce…only to return blade side down and destroy what little you had). Rather, find a winner and put more in it slowly as it rises…much more success from picking winners than lawsuit riddled losers. Also, call the company and talk to people…amazing how much you can learn from a quick phone call.

    • Scotty

      June 23, 2016 at 3:34 pm

      I don’t have any skin in the game with HEMP. I’m sorry I can’t advise you what to do with your shares. I just know I don’t want to make a mistake like this in the future with a project I’m working on. I believe the Hemp Industry will grow in the future. Daily, I learn of advancements, studies, news, cures, etc from the Cannabis Pros. One of which is the use in electronics and supercapacitors using Lignin.

    • Jeremy

      November 17, 2016 at 6:09 am

      Did you ever get involved in a shareholder lawsuit or find anything out? What about any info? I myself was scammed by them as well.

    • Doua Vang

      April 30, 2017 at 7:51 am

      I just toured hemp inc’s manufacturing in NC, if I in your position, I will wait. In next 5 month you will see real coming back if hemp inc following business operation procedure.

      • Santiine

        October 23, 2017 at 10:20 am

        I agree, I also took the tour myself I have almost 500,000 shares with them. They are getting themselves together. I asked all the questions that needed to be asked. They answered them truthful, I know because I made sure I got the information before hand, I asked the questions. They didn’t lie once. I had to go see it for myself they have a good system. I talked to the COO & CEO till the end. I had a great time seen local farmers as well. If I felt it was not good company, I would of pull out at the end of the tour, Just like that.

  2. Jason Lauve

    June 23, 2016 at 2:55 pm

    I have a lot to say about how I was treated by Hemp Inc. Feel free to reach out, I’m interested in getting the behind the scenes story out!

  3. Greg calhoun

    June 30, 2016 at 2:47 pm

    I was suckered by hemp hype. I bought 20,000 shares at 10 cents per share. It immediately started down.Now it is 3 and falling. It’s like they were waiting on me to collapse.

  4. Paul J.

    July 2, 2016 at 2:09 pm

    This article is bullshit with lies and flies mixed in with it. Look at the chart and date fucking unbelievable lol if you believe you should not play the market

  5. Pingback: Hemp News Roundup: Feds, the "King of Pot," Kazakhstan and More - HEMPYS Brand Hemp Clothing

  6. Joe Cat

    August 16, 2016 at 2:45 pm

    Bitter impaitient rantings of a man seeing red in his porfolio. HANG IN THERE! GOOD THINGS COME IN GOOD TIME!

  7. Steve

    October 10, 2016 at 11:52 am

    i went to high school with bruce P in the late 60s in miami

  8. David Armstrong

    February 17, 2017 at 11:42 am

    This Bruce Perlowin sounds like a real piece of work with all I’ve read about him. I was looking to invest but after doing due diligence am running away from this guy and will be looking to do my own reverse and create a solid profitable company.

  9. Allan

    February 26, 2017 at 1:04 am

    Patience people….it is a penny stock. How much can you possibly lose? It will take time for these states to get their laws passed, licenses issued and industry moving. Not for the faint of heart and never risk more than you can afford to lose. wishing prosperity to all.

  10. Gary Thompson

    April 3, 2017 at 10:00 pm

    The guy is a freaking thief, I hope that Silo of his; falls over and hits him in the fucking head. Bought a million shares of this garbage! Someday, someone will pay this asshole a visit….bad mochoo!

  11. Daniel Shubeck

    June 21, 2017 at 12:12 pm

    wow it seems as though there are a lot of haters out there. I have invested a lot of my hard earned money in Hemp Inc., well over 500000 shares and I am down a lot but i have not lost anything because I did not sell. I bought this stock because of the environment, jobs, and my sons future. This is the first year in a long time hemp is now growing in the Carolina’s. The farmers are very excited.and It all has to be processed. Our company is the one to do it. I am not bailing on my vision for our future.

    • Santiine

      October 23, 2017 at 10:24 am

      Good choice! 🌱👍🏻

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