GLOBAL HEMP GROUP (OTCMKTS:GBHPF) Is A Long Term Win For Investors

The past ten days have seen GLOBAL HEMP GROUP (OTCMKTS:GBHPF) enjoy a share price uptick.

The latter has brought the market’s attention to them as the company’s price rose from $.03 to highs of up to $.12 in a matter of days, a 300% increase at minimum.

With the company having a significant number of deals on the table courtesy of their business model as well as having worked diligently to actualize most of the promises made to the market, a lot of speculation has been running as to what exactly has been the course of this spike.

It is upon this backdrop that we also got interested and decided to have a look at GBHPF. This piece will therefore outline what the company does as well as how the latter will affect their value creation narrative gong forward. Finally, our outlook on the company will be given.

The above price action is seen in the chart below: GBHPF Daily Chart

Before then, let’s have a synopsis on GBHPF for the sake of first time readers.

A Brief Look Into GBHPF

Global Hemp Group was founded in 2009 and had its headquarters in North Vancouver, Canada.

The company specialized in acquisitions and joint ventures with companies within and across the hemp and cannabis industry. they work at ensuring they bring to the table companies that are environmentally aware and that will enable them grow their (both GBHPF and the individual company) revenues and cash flows and therefore their valuation, alluding to the value creation principle they hold on to.

Currently, the company is working through a series of joint ventures, with the most recent one being explained in the next section. They have since 2015 been at the forefront in ensuring the cannabis and hemp sector grows with the acquisitions of agricultural land for hemp cultivation and the development of a value-added hemp processing zone.

The company’s current projects rotate around the evaluation and selection of a good location from which to build a Hemp Processing Zone. The zone which, according to management, will be the first of its kind will ensure the entire process is carried out at one primal location, enabling cost efficiency as well as building synergies within the different divisions used in the production process.

Furthermore, the company is working at ensuring the material used for this process is sustainable so as to achieve their goal of a near net-zero carbon footprint in the long run.

Recent Developments

The most recent development was undertaken through a joint venture between GBHPF and the Marijuana Company of America (MCOA).

This venture entailed GBHPF helping MCOA develop their commercial hemp production in the New Brunswick, a state in which GBHPF had carried out its operations in prior to this deal.

With this deal in place, GBHPF and MCOA were to tap into the Space Cowboys who were to provide consulting services for their Brunswick hemp project.

The move which saw the two companies close a deal back in September this year would see both MCOA and GBHPF benefit in the long run from the federal legalization of cannabis in Canada which is scheduled to happen in July 2018. The companies are working diligently to ensure everything is in place for the set date as well as ensure they are the go-to source of cannabis within the region.

With the above in place, the two companies seem to be well strategically aligned therefore little will stop them from achieving their objectives.

Financials

The company has been making little to no revenues in the past quarters. Moreover, copies of their most recent financials have been far from being made available to the public.

In the third fourth of 2015, 4Q2015, the company made no revenues with the situation being the same in two of the previous three quarters. The highest revenue made has been $9,000 in the second quarter of the year, 2Q2015.

However, management has been working tirelessly at ensuring the company’s costs are cut. In 4Q2017, their operating costs stood at about $14,000 down from $33,000 in 3Q2017. Moreover, their net loss stood at $16,000 down from $52,000 in the previous quarter.

Despite the above, their working capital position was still negative at about $209,000 which doesn’t send good signals to the market. Going forward, it would be advisable for them to strengthen this position especially now that such a capital-intensive project is currently underway.

Is there a catalyst?

As earlier stated, a lot has been seen as the driver of the share price spike detailed earlier. This far, we would conclude by saying that the price hike is not catalyst driven. Most likely, the price hike is attributable to other market sentiments exogenous to the company’s fundamentals.

However, this should not be taken to postulate that GBHPF is going down, on the contrary, the company’s future outlook seems quite positive and going forward, given that a lot has been done by management to ensure they excel, we see their share price going up again in the long run.

Conclusion

GBHPF is expected to grow in the long term. With such prospects as alluded to in the article, investors would benefit a lot from being part of the growth phase of the company that is bound to happen quite soon.

We will be updating our subscribers as soon as we know more. For the latest updates on GBHPF, sign up below!

Image courtesy of Tim Lenz via FlickrDisclosure: We have no position in GBHPF and have not been compensated for this article.