Shares of HempAmericana Inc (OTCMKTS: HMPQ) rallied by more 90% after the company confirmed it has commenced commercial bottling at a Maine Lab. The announcement could not have come at a better time as the stock has been languishing at all-time lows and in dire need of groundbreaking catalysts.
HempAmericana Price Action
The Company commencing commercial bottling could as well indicate that that Company is past its struggles after a rollercoaster first quarter. Early this year the Company was also on the spotlight after receiving a significant purchase order for CBD distillate that was expected to pave the way for additional orders.
The stock has since bounced off a crucial support level, waiting to see if the upward momentum has what it takes to catapult HempAmericana past a technical resistance level at $0.02. For the better part of the past 12 months, HempAmericana price action activity has remained subdued in a $0.01 to $0.02 trading range.
A rally followed by a close above the $0.02 technical level should arouse break out sentiments. Conversely, failure to take out the $0.02 resistance level could see the stock continue to trade sideways as has been the case for the better part of the past year.
What Does HempAmericana Do?
HempAmericana is engaged in the development and selling of product made of industrial hemp. The Company owns a cannabis extraction machine that it plans to leverage on its bid to become a leader in the CBD oil market.
The confirmation that HempAmericana has commenced bottling of CBD distillate at a facility in Maine is a development that continues to excite investors given its potential impact on revenue generation. The Company is in the process of bottling 500mg and 1000mg full spectrum CBD distillate at the Augusta Maine Laboratory
Plans are underway to produce as much as 2000 bottles a day that should increase to 8,000 bottles a day to cater to the growing demand. The CBD distillate is to be distributed under the Company’s brand name ‘Weed Got Oil’.
“After so many struggles, we have been able to prevail, and we are now officially in production of this incredible product. […] We are a real company, bootstrapping operations, and our laboratory features extraction equipment, including a supercritical C2 extraction machine. We look forward to providing you with several updates over the coming weeks,” explained CEO Salvador Rosillo.
$2 Million Revenue Opportunity
The CBD Distillate bottling comes on the heels of HempAmericana securing a significant purchase order from a manufacturer and wholesaler from the West Coast early in the year. The purchase order, according to the CEO, could pave the way for revenues of as much as $2 million going forward.
HempAmericana has already installed a final piece of equipment poised to ramp up capacity expansion at the state of the art extraction and production facility. With the equipment, the Company should be able to ramp up production in a bid to fulfill the purchase orders that continue to stream in.
Early this year HempAmericana signed a letter of intent for the purchase of an entire Hemp crop from a key supplier in the East Coast. The Hemp harvest will go a long way in supplying the Company’s extraction and production activities.
“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 in what we believe to be one of the finest high-capacity CBD production operations on the planet right now,” added Mr. Rosillo.
HempAmericana is a potential bounce-back play after hitting the floor and bottoming out on huge volume. A 100% spike from all-time lows underscores renewed investor interest that should continue to support further upside price action.
In our view, the commencement of CBD distillate bottling, as well as the signing of deals for purchase orders, should continue to shore up market sentiments. That said the stock is likely to continue bottoming out as a bounce-back play.
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Disclosure: We have no position in HMPQ and have not been compensated for this article.