The 2018 Farm Bill, made industrial hemp completely legal. Unlike cannabis, hemp is 100% federally legal. Cannabis stocks have fallen on hard times recently, however, hemp stocks should not have the same issues.
Hemp yields lower amounts of THC the psychoactive compound found in recreational marijuana, thus it is a sustainable and profitable crop due to its many medical, structural and dietary uses.
The hemp industry is booming, and there are many multi-million dollar government and private grants providing significant funding towards the research and applications of the crop.
With strong government support in the US, the hemp market is projected to further grow at a CAGR of 22.4% between 2021 and 2027 to reach a value of $18.6 billion by 2027 according to Allied Market Research. Additionally, sales of hemp-based products are expected to reach $2.61 billion by 2022 according to Statista.
ONE PURE HEMP PLAY
Generation Hemp, Inc. (OTCMKTS: GENH) is a pure-play hemp stock operating in the midstream sector of the industry. While most of the stocks below have cannabis components that add risk, this stock could be the best way to capitalize on the booming hemp market.
Generation Hemp (OTCMKTS: GENH) uses hemp hurd, the byproduct of hemp processing, as animal bedding, under its Rowdy Rooster brand. Studies have proven hemp hurd bedding as one of the most absorbent, non-acidic materials, with low dust. It inhibits the growth of bacteria and mold that animals may breathe in from those dusty competitors.
Hemp hurd also absorbs 235% of its weight which is far better than the closest competition (55%). That’s why GENH’s hurd is now being used to help keep garages clean through a partnership with well-known brand Gas Monkey, Generation Hemp will manufacture a spill absorbent, sourced from hemp hurd.
Generation Hemp, Inc. (OTCMKTS: GENH) is also in the crypto mining business, showing just how versatile hemp can be. GENH has partnered with Massachusetts-based Cryptech Solutions, the largest volume reseller of ASICS in North America, to build ‘green energy’ plants and Bitcoin mining farms that utilize hemp as the primary power source. GENH announced the first bitcoin mining facility through a Joint Venture ‘JV’ to be installed at Generation Hemp’s 48,000 sq. foot facility in Hopkinsville, Kentucky, which also houses a hemp drying operation through its wholly-owned subsidiary GENH Halcyon Acquisition.
This plant will be able to generate 2 megawatts (‘MW’) which would allow for up to 576 mining units. Assuming 100 TH/s per unit, GENH and Crypt Solutions would be able to generate $3.65 Million in Bitcoin revenues in 1 year of operations, assuming the price of Bitcoin doesn’t drop beyond its current low.
More on GENH here: http://fzm.fce.mywebsitetransfer.com/2022/03/08/generation-hemp-uses-hurd-to-clean-spills-and-comfort-animals/
Aurora Cannabis, Inc. (NYSE: ACB) is expected to announce $41.74 Million in quarterly sales. Other established growers Tilray (NASDAQ: TLRY) and Canopy Growth (NASDAQ: CGC) are also reporting impressive numbers, however, investors are concerned due to the THC component and the federal regulations that come with it.
If you are looking for a more ancillary play. Innovative Industrial Properties, Inc. (NYSE:IIPR) is a California-based company focused on the acquisition, ownership and management of industrial properties for their regulated cannabis and hemp facilities.
IIPR announced quarterly funds from operations (FFO) of $1.85 per share, beating the Zacks Consensus Estimate of $1.84 per share. Up from $1.29 per share a year ago representing an FFO surprise of 0.54%. A quarter ago, it was expected that this company would post FFO of $1.72 per share when it actually produced FFO of $1.71, delivering a surprise of -0.58%.
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