HEMP Surges on Legislative Progress of Farm Bill, ou comment sauver la P.A.C…

In just a few short days,
Hemp, Inc. (HEMP) has seen some very solid growth of over 200% and many investors in the medical marijuana sector are left wondering whether this is some kind of fluke or if this is just the beginning for this stock with some hope on the horizon for it and industrial hemp thanks to the 2014 Farm Bill.

The 2014 Farm Bill is no surprise to anyone who has been paying attention to politics but we are specifically interested in the pro-hemp amendment and it’s implications that are included with this bill.  The farm bill provision was authored by Rep. Jared Polis, D-Colo., and Reps. Thomas Massie, R-Ky., and Earl Blumenauer, D-Ore., and to summarize would allow higher education institutions and state agriculture agencies to grow and research hemp without being penalized by the federal government.

Hemp Right Now

Growing or using hemp is technically illegal under federal law. The farm bill provision wouldn’t overturn that prohibition, but would block federal authorities from cracking down on hemp farmers, researchers and higher-education institutions in areas where the crop is legal. Currently, industrial hemp cultivation is legal in Colorado, Oregon, California, Kentucky, Vermont, Montana, West Virginia, North Dakota and Maine, according to the National Conference of State Legislatures.  However, most hemp currently is imported from outside of the United States.

The Debate

The bill is currently being debated within the Senate today and tomorrow, with an official vote by the end of tomorrow about whether this bill will be passed to the President for review.  The progress of this bill is more than likely the reason for HEMP’s huge day on the market today and investors are in a bit of limbo about which way this vote is going to go and what it consequently means for the use of hemp and hemp regulations in 2014. However, we consider HEMP to be one of the more financially sound companies in the sector and despite some huge volume today, they don’t boast an extremely large market cap which to be frank, is comforting. You can tune into the debate tomorrow and listen to Senate Floor proceedings about this bill via live feed here. The most recent update to the process we have is that the cloture vote was established and the official vote will indeed be tomorrow afternoon.

HEMP Going Forward

As investors in HEMP, we like what we have seen overall from them in 2014 and we think that HEMP has some room to grow regardless of the vote on the Farm Bill but we can see this as a short term catalyst that could continue to give HEMP some serious fuel to continue it’s elevation over the next couple of weeks.  However, we would not be surprised to see it dip after posting such huge gains over the past couple of days.  If there is a snag in the process for this vote, we would obviously expect a correction of share price short term.

Today (02/03/14),
we saw extremely high volume of 340mn shares traded, which is significantly above the daily average volume of just under 63mn so there are a lot of eyes watching this stock.   Investors lucky enough to purchase at open today or on Friday should be thrilled with this movement but shares could turn negative fairly quickly for a correction.
DISCLAIMER:
This information is not investment advice, nor is it a suggestion to either buy or sell any of these securities. Retail investors should do their own research and fully understand the risks associated with these companies. At the timing of this publication, the author(s) of Weed Entrepreneur hold long positions of HEMP.

Weed Stocks 2014:
Has The Bubble Burst?It’s been a while since we’ve posted here at Weed Entrepreneur,especially about weed stocks 2014 —but that certainly doesn’t mean we haven’t been paying attention.
(To stay more up to date between our posts make sure you follow us on Twitter.)

If you haven’t been sleeping under a rock lately, you’ve noticed that weed stocks in 2014 came off to a torching hot start the first couple of days but some may say that flame was put out pretty quickly.   I have to admit… It has gotten a little chilly the past couple of weeks but if you think about the progress that the industry has made as a whole, it’s been moving quite steady.
There are definitely some compelling marijuana investor success stories, specifically an investor turning $10,000 into $45,000 in a mere 15 days. However, we are not saying back up the truck to unload into your brokerage account just yet —  but there are some interesting opportunities out there if you have some room for a riskier position.  However, I must warn you: if you are going to play in this industry right now, you have to have an iron stomach because the volatility is not for the faint of heart.  The wild swings of many of the more well known weed companies right now are becoming victims of a lot of day trading sending them into wild swings (see: MDBX/RFMK).  Chances are as we see more investors coming to the table, things should calm down a bit.

Has the bubble burst? 

Currently, many investors are wondering if the Jan.1 surge of weed stocks was a bubble that has already burst —   Many of them asking  ”Is it too late to invest?”  We believe the nearly industry-wide increase at the start of 2014 obviously was a result of the first day of sales for recreational marijuana in Colorado. This type of landmark date allowed the media to focus on the industry and raise awareness and investor interest.   Naturally we deserved a pullback across most of the bigger weed stocks at that point but that’s not to say this is even the formation of a “bubble” just yet.
With an already breakneck pace set for 2014, it’s become clear that the legalization of medical/recreational marijuana is going to be a heavily discussed topic in 2014.  There are going to be many big dates/stories (most of them will probably be state legalization process updates).  With the help of the legal recreational marijuana market opening in Colorado, many investors from across the globe are taking a look at marijuana stocks and pending no bad news from the federal government, we expect more attention to come.

Ultimately, it’s important to remember even if you believe that the legalization of marijuana will occur, that doesn’t necessarily mean the exact companies right at this moment are going to bring you to riches.  It’s obvious that many companies are struggling right now and for good reason. Make sure to pick the companies you feel are most legitimate in terms of their financial information and try to avoid the hype.   Don’t bet the farm on all of the stocks in the market today because the competitive landscape could all change in one year very quickly.

Weed Stocks 2014: Looking Ahead

In closing, if positive progress continues, there are going to be two key news updates in the next couple weeks to keep an eye on:

• An official update on the slow and painful death of the marijuana black market.  One of the obvious objectives for the government when legalizing recreational marijuana was to destroy the black market and the crime revolving around it. Stories about how “dealers can’t give it away” only help the case because it shows this model is successfully destroying the black market demand and forces people to buy from a regulated and taxed source.

• Colorado’s updates of recreational marijuana sales numbers will continue to be a big momentum shift for the bigger name weed stocks especially.   If the number announcements are higher than the public expects then you can probably expect some more short-term surges.   The stores could also become sold out which could get an interesting market reaction.

It’s important to remember like all investment decisions, please make sure to do your own due diligence before investing.  None of this post is to serve as a recommendation or investment advice.  

In the next couple of weeks, we are going to take a closer look at a few weed stocks to help investors understand more about these companies. 

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