HempAmericana Inc (OTCMKTS:HMPQ) has continued to underperform the cannabis industry, even on the overall industry turning bullish in 2019. Soaring short selling pressure continues to push the stock lower, in continuation of a bear run that began late last year.
Share Price Analysis
In contrast, fundamentals have improved a great deal in recent weeks. For starters, the company is fresh from confirming a significant purchase order for CBD Distillate. In addition, the company has confirmed it has made steady progress towards the launch of a new CBD product line.Early this year, the company signed a letter of intent for the purchase of an entire Hemp crop as it seeks to come up with unique cannabis products to meet the ever-growing demand. The company has also turned to strategic partnerships as it looks to kick off an aggressive marketing campaign in pursuit of revenue opportunities.While in most cases recent developments would have fueled a spike in share price, that has not been the case. Instead, the stock has continued to edge lower as it eyes December lows. After the recent plunge, the stock is staring at one-year lows of lows of $0.0070. A breach of the critical support level would leave the stock vulnerable to further drops back to all-time lows of $0.0035. HMPQ Daily ChartFor the stock to turn bullish in the short term, it needs to rise and stabilize above the $0.02 mark, seen as a critical resistance level. Below the psychological level, the stock remains susceptible to further drops given the strength of the short selling pressure.
About HempAmericana
HempAmericana casts itself as an emerging leader in the CBD products market. The company owns and operates a state of the art CBD extraction and processing facility in Maine. In addition, the company researches develops and sells cannabis and industrial hemp across the U.S.
Why is HempAmericana Due for a Bounce Back?
HempAmericana is due for a major bounce back in part because it appears to have hit rock bottom after imploding for months. Recent developments do not support a further drop in the stock, as they affirm the company’s long-term growth prospects.Investors could soon start pushing the stock up the charts on taking mote of the progress made by the company in pursuit of cannabis revenue opportunities. For starters, the company has inked a deal for a significant purchase order for CBD distillate. The order is from a major manufacturer and wholesaler of high-quality CBD products.
“This is likely just the tip of the iceberg as we hit our stride and start to book initial sales. Demand growth in the CBD space continues to trump rising expectations at every turn, helped along by the historic 2018 Farm Bill last month. We are ready to start pumping out product around the clock to cash in on the time, energy, and capital invested over the past two years,” said CEO, Salvador Rosillo stated.
In a bid to make good use for the growing demand of CBD, HempAmericana has installed a final piece of equipment for capacity expansion in its state of the art extraction and production facility. Installation of a specialized bottling machine at the facility also paves the way for the company to start bottling and distributing its own branded CBD products.
Hemp Flower Purchase
Early in the year, the company signed a letter of intent for the purchase of an entire crop of hemp flower. The hemp the company is purchasing will go towards the company’s CBD extraction and production activities at the Maine facility. Acquiring sufficient hemp supplies is a top priority as the company seeks to ramp production to full scale.The deal is first of a series of supplier relationships that the company is banking on, as it seeks to become an industry leader when it comes to hemp production.
“We are going to need thousands of pounds of hemp flower per week to drive our high-capacity operations now that we are on the brink of major full-scale production in Maine, and possibly on the brink of launching our next manufacturing facility on the east coast as well,” said Mr. Rosillo.
In addition, the company has collaborated with High Times as part of an effort that seeks to strengthen marketing campaigns ahead of full-scale cannabis production.
Bottom Line
Recent developments attest to a company that is firing on all cylinders when it comes to operational efficiency. Improved cannabis production capacity as well record-breaking purchase orders are some of the developments that affirm HempAmericana prospects. That said HempAmericana looks like a breakout play in line with the bullish momentum in the cannabis sector.We will be updating our subscribers as soon as we know more. For the latest updates on HMPQ, sign up below!Disclosure: We have no position in HMPQ and have not been compensated for this article; however, we have been compensated in the past for emails sent out on behalf of a third party regarding HMPQ.
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