The Hemp Inc (OTCMKTS: HEMP) stock sell-off appears to have run its course. HEMP has finally broken out after a period of consolidation at all-time lows. The upward momentum is gaining traction going by price action activity in recent trading sessions. Fuelling the bounce back is a flurry of positive developments that continue to reinvigorate investor interest in the stock.
Hemp Inc Price Analysis
The announcement that the company is on course to produce 20,000 hemp pre-rolls a day, to meet growing market demand is one of the developments that continues to excite investors. Ramping up production comes hot on the heels of the company entering into a strategic partnership for the processing of hemp products for the bioplastic industry. The confirmation that credit unions can provide financial services to the hemp industry also marks an important milestone that should support Hemp Inc.
After succumbing to short selling pressure for the better part of the year, Hemp is showing signs of bottoming out as underlying fundamentals continue to strengthen. Price action indicates the stock is on its way back to the $0.02 mark a critical technical level.
The stock needs to rally and find support above the $0.02 level to have any chance of bouncing back from all-time lows. For Hemp Inc. to turn bullish, then it will have to rally and take out the $0.03 resistance level standing in the way of further upside action.
What Does Hemp Inc. Do?
Hemp Inc. is a company seeking to become a leader in the industrial Hemp business. The company boasts of bi-coastal processing centers made up of an 85,000 square foot multipurpose processing facility in North Carolina. It also operates 500-acre hemp growing Eco-village in Golden Valley Arizona.
Hemp Pre-roll Opportunity
Hemp Inc. stock is rallying on the company ramping hemp pre-roll production, to meet growing market demand. The company is in the process of increasing production to 20,000 hemp pre-rolls a day that should improve to 20,000 pre-rolls an hour sooner than later.
Given the increased production capacity, the company is on its way to generating significant revenues given that one pre-roll goes for as much as $10 in the retail market. The company has already started reaping the rewards of focusing its efforts in growing hemp for smokable products rather than biomass. Revenue for smokable hemp flower is 10-15 times more as compared to revenues generated from hemp biomass.
While some of Hemp, Inc.’s harvest will go to biomass for oil and isolate production, a significant amount will be used in the production of smokable products. This vertical integration merges seamlessly with Hemp, Inc.’s processing facilities which specialize in drying and curing the flower for smoking,” said CEO Bruce Perlowin.
Bioplastic Hemp Opportunity
In addition to ramping up pre-roll production, Hemp Inc. has also started processing hemp to meet an emerging market opportunity in the bioplastic industry. The products that the company will be working on, include a blend of hemp and Kenaf. This is not the first time that the company has worked’ on such products as in the past, it has unveiled Drill Wall and Spill-Be-Gone for the oil industry
Hemp products for the bioplastic industry present an important opportunity for Hemp Inc. as they are poised to control 5% of the global plastics market by 2020, which could rise to highs of 40% by 2030.
“This is a venture no one else is doing in America and what hemp was put on this earth to do. While everyone focuses on CBD, we are here focusing on the next big thing, which is the industrial part of the plant – the part that can help save the world,” explained Mr. Perlowin.
Hemp Inc continues to strengthen its operations around industrial hemp. Growing demand for hemp pre-rolls presents a unique opportunity for the company to strengthen its revenue base. The emerging opportunity of hemp products in the bioplastic industry is another huge opportunity for Hemp Inc.
Hemp Inc is an ideal bounce back play as it is currently trading at a discount relative to improving underlying fundamentals. We believe better days are ahead for HEMP shareholders as the stock looks to have finally bottomed out.
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Disclosure: We have no position in HEMP and have not been compensated for this article.