Hemp, Inc. (OTCMKTS:HEMP) Turns a Darker Red

Yesterday’s session dragged down the majority of the pot stock sector of the OTC once again. Hemp, Inc. (OTCMKTS:HEMP) was among the biggest percentile slips of marijuana companies, closing 11% down and stopping at $0.044 per share.

HEMP was also one of the biggest gainers from the green leaf frenzy that took the markets by storm in the first days of the new year, as recreational use marijuana sales commenced in the state of Colorado. Volume accumulation and price movement had begun in the last trading sessions of 2013 and in the new year the ticker nearly quadrupled in price, trading as high as $0.085 intra-day.

The company chimed in with a number of press releases in the new year. Highlights include the resignation of president David Tobias whose position is still vacant, and the decision to shed one of the non-core divisions of HEMP. The transaction in question involves VOIPNeTX, a non-core asset of the company, which will be purchased by Apex 9, Inc. for an undisclosed amount of stock that will be issued as dividend to HEMP shareholders.

HEMP couldn’t have timed the news better, seeing how it comes at a time when the company is moving daily volumes far above its average. HEMP posted more news under a hugely optimistic headline yesterday but this didn’t help the price movement much. On Tuesday the New Jersey Senate approved a bill seeking to legalize hemp cultivation licenses but the legislative move still needs the OK of the state governor.

It’s still not too clear why HEMP is riding the hype as the company is engaged in a different facet of the industry – namely industrial-use hemp and does not really focus on recreational products but the blanket effect swept it along for the ride. Another marijuana company is moving in a very similar pattern to what HEMP is charting – Cannabis Science, Inc. (OTCMKTS:CBIS) also slipped yesterday closing nearly 10% down.

The collective pot sector is deflating like a punctured tire after a single, albeit significant, green day after the crash started. Traders eyeing the drop and looking to get into any marijuana stock may want to take note how far current price levels are from both 50 and 200-day moving averages and whether anything significant has happened on a material or operational level with the companies that could justify sustaining the new highs.