HEMP, Inc. (OTCMKTS:HEMP) Continues Upward

HEMP, Inc. (OTCMKTS:HEMP) stock managed to gain another 5.83% on Friday, despite the rough waters that the marijuana sector is currently braving.

The company managed to break its red streak on May 21, when the results of its latest financial report finally affected the market. The change in direction that the ticker experienced was immediate and obvious, and for good reason. The statistics block HEMP published this time is much more impressive than anything the company has given investors thus far:

• Cash – $220 thousand
• total current assets – $5.8 million
• total current liabilities – $258 thousand 
• revenues – $5.4 million
• net income – $2.6 million 

While these figures appear fantastic at first glance , something about them seems a bit off. The amount of cash on hand seems oddly disproportionate to the revenues and net income. A careful look at the whole report reveals the reason for this sudden jump in sales and income. HEMP has indeed been making revenues, however it has not been paid in cash for most of the services it has rendered. 

Rather, it turns out that HEMP has received 2.9 billion shares of common stock of other dubious penny stocks as payment from eight consulting clients. Said shares were listed in the report as “valued” at $5.3 million, but due to the fact that the shares in question are not really in high demand, HEMP may end up having trouble actually receiving money for its troubles.

This is why the company’s latest press release, the one that hit the web on May 22, sounded less believable than it may have otherwise. It declared that the company has dedicated $1 million to the search for an appropriate banking partner in Colorado. Nevertheless, the statement managed to incite marijuana stock enthusiasts, and as a result almost 3 million shares changed hands over the course of a single day.

Which is a bit odd in and of itself, especially if you consider the fact that in its latest filing, the company has explicitly declared that it “does not cultivate, distribute or possess marijuana”. Rather, HEMP would “connect industry participants and serve their information needs”. 

This raises another question – HEMP is currently experiencing the full benefits of the volatility of the marijuana market. Will it still be traded as a marijuana stock if the company’s supporters get the memo that it currently has almost nothing to do with the actual growing and distribution of marijuana?

Also, there’s another matter to consider. HEMP‘s tendency towards vague and wordy press releases has always worked to the company’s benefit, but that has changed dramatically in the last few days. Currently, creative accounting and misleading press releases are not the best way to go, a fact to which the suspension of Fortitude Group Inc. (OTCMKTS:FRTD) and 15 other companies on Friday can certainly attest.