Serious questions are being asked regarding the recent upsurge in the value of Hemp Naturals Inc (OTCMKTS:HPMM). After over a year of steady movement between $0.18 to $0.46, the stock’s value jumped to over $1 within the last few weeks and continued upwards to a new high of $3.25. Although this momentum has tailed off a bit, the stock is currently trading slightly below $2 which was unchartered territory until a few days ago.
To put this in context, Hemp Naturals Inc (HPMM) highest price over the last year was $0.51 while its lowest price was $0.0916.
In this article, we analyze the business off Hemp Naturals Inc with an aim to identify the cause of the unusual hike in its share price.
Take a look at the stock’s movement in the last year:
Hemp Naturals, Inc. was founded in 2015 and is based in Sunny Isles Beach, Florida. Hemp Naturals, Inc. is a medical resources production company which engages in researching, developing, acquiring, and selling products which are made using industrial hemp. The company sells some of its products through numerous retail stations such as include convenience stores such as tobacco shops, gas stations, and liquor stores. The firm has indicated its intent to provide consumer goods using industrial and/or the non-psychoactive components of the cannabis plant, which includes hemp shakes, nutritional hemp health supplements, and beauty supply products. At present, most ofits products are sold within the United States.
A week ago, American President Donald Trump signed off the farm bill into law. This act meant that, for the first time in almost a hundred years, production& cultivation of hemp was made legitimate on a sovereign level within the U.S.
The passage of the farm bill serves as a boost for producers of medical and non-medical therapeutic products which contain cannabidiol, a hemp-derived extract popularly referred to as CBD as it is now recognized as a legitimate substance on a federal level.
For CBD firms such as Hemp Naturals Inc. regarded as one of the fastest growing CBD manufacturing company within the industry, the bill’s passage has opened opportunities not just for new products, it also guarantees new markets and consumers even within existing markets.
Environmentally-friendly brand packaging
Another major positive for the Hemp Naturals is the availability and willingness of growing CBD or marijuana consumers who to pay a premium for biodegradable plastics or hemp plastics or which have been branded for customer use.
One of the more popular companies willing to do this is the Denver-based joint rolling tray producer and seller of the spinning cannabis organizer popularly known as the “Blazy Susan”. Company founder, Will Breakell explained that the premium charge of $1 to $2 which is to be earned from each plastic due to the use of Hemp Plastic Company’s twenty percent hemp plastic blend could provide a worthy return on investment in the event that it appeals to the firm’s customer base.
However, with concerns mounting over the effect of plastic on sea animals and plastic content in rivers and oceans, the sustainability of such plastic products remains questionable.
The company did not record any revenues in 2017, in line with trends in recent operating periods as far back as 2015. It is anticipated that beyond the research and development phase, the firm will be capable of producing products which are demanded by the market in commercial volumes. Projected revenues are expected to be boosted by the new bill legalizing the product.
Between 2016 and 2017, total cost of operations from $36,379 in 2016 to $3.97 million in 2017, a massive increase due to higher selling, general and admin expenses. The increase is a possible pointer that the firm has ramped up production in anticipation of increased demand for its products. As there was no operating income, operating loss for the year was recorded at $3.97 million. Based on HPMM’s current phase in the business lifecycle, it is expected that revenues will not be generated in the immediate term.
Loss after tax recorded over the period was $3.97 million, a figure much higher than the previous period’s loss of $36,379 revealing that the income statement consisted mostly of its operating expenses for the year.
According to the balance sheet, Hemp Inc. does not have a lot of debt of on its books, with its total debt consisting of current liabilities $9,074.
HPMM is strategically positioned to become a nationwide producer of the now legal CBD. If management is able to take proper advantage of the situation, the only way for the firm is up.
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Disclosure: We have no position in HPMM and have not been compensated for this article.