Hemp Inc (OTCMKTS: HEMP) Bulls Gaining Traction

Hemp Inc (OTCMKTS: HEMP) has struggled for direction after coming under immense bearish pressure, resulting in a 50% slide. In recent weeks, the stock has resorted to trading in a tight trading range of between $0.02 and $0.03, on the lack of catalysts to fuel the upward momentum. However, not anymore.

HEMP Catalysts And Price Analysis

A confirmation that the Company registered an 1800% increase in sales for the full year ended December 31, 2018, could as well be the catalyst to fuel a bounce back from current lows. The steady increase underlines underlying growth at a time when demand for cannabis products is on the rise.

The Company has also provided a 2019 outlook that underscores expected growth as management focuses attention and resources to transforming Hemp Inc. into a full-blown marketing entity.

With the stock currently, trading at the $0.02 level, a rally could be in the offing given the formation of a bullish spiking channel. The formation of higher lows in recent weeks signals a stock due for a correction higher as a bounce-back play.

The $0.03 mark is the immediate resistance level standing in the way of the stock spiking high in continuation of the emerging uptrend. Hemp finding support above the $0.03 level should open the door for it to make a run for the $0.04 mark, the next critical resistance level.

Above the $0.04 level, the stock would be well positioned to continue rallying on improved underlying fundamentals.

What Does Hemp Do?

Hemp is engaged in the production of products made from industrial hemp. The Company boasts of one of the largest commercial multi-purpose industrial hemp processing facility in North America. It also provides products and services to the medical and recreational marijuana industries.

Sales Growth Boost

Hemp Inc. delivering full-year sales of $1.96 million in 2018 up from 107,002 generated in 2017 is a milestone achievement that underscores robust growth. The 1800% year over year increase highlights the Company’s foothold in the highly competitive industry.

Chief Executive Officer, Bruce Perlowin, attributes the robust sales growth to the building of solid hemp infrastructure that was not inexistent in the previous years.

“We’ve invested heavily to build this infrastructure, which currently consists of 9 divisions, as you’ll read below. I liken Hemp, Inc.’s business model to that of the Amazon.com model where today the richest man in the world plowed all their operating capital and profits back into building the infrastructure. “We’re hitting the market hard with massive revenues generated from massive sales,” explained Mr. Perlowin.

In a bid to accelerate sales growth in the second half of the year, the management intends to focus on strengthening marketing operations instead of building a massive infrastructure. By focusing on marketing, the management intends to transform Hemp Inc. into an operating company from a developmental stage company.

Enhancing Hemp Production And Marketing

Hemp Inc. remains well positioned to make good use of the growing demand for cannabis products in the market, at the back of the ongoing evolution. The Company boasts of two hemp-processing facilities. One of the facilities located in Spring Hope North Carolina us ranked as one of the largest hemp-processing center in the western hemisphere.

The North Carolina facility is operating full time, processing millions of pounds of unique kenaf used in the manufacture of all green natural loss circulation materials. The Company is also in the process of building two other production facilities in a bid to ramp up production capacity.

In addition to ramping up production, Hemp Inc. is also enhancing its marketing operations in a bid to cater to the growing needs of the cannabis market, poised to reach $22 billion by 2022. The Company has so far formed a joint venture with retail store Hemp Healthcare in Dolan Springs Arizona to sell high-quality cannabidiol as well as hemp-based products.

Bottom Line

Hemp Inc has been under immense short selling pressure if a 50% plus slide since the start of the year is anything to go by. The slide has come even on the broader cannabis sector trending higher after a roller coaster 2018. However, the stock appears to have hit bottom and due for a correction higher.

The Company reporting an 1800% year-over-year increase in sales is a development that should continue to strengthen the stock’s sentiments in the market. For investors eyeing opportunities in the stock then it might be wise to wait for the stock to rally and find support above the $0.03 mark.

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Disclosure: We have no position in HEMP and have not been compensated for this article.