Investors are Capitalizing on the Emerging Hemp Market
Cannabis Stocks Skyrocket
Over the past few years, cannabis stocks have seen rapid growth. Roth Capital Partners estimates the U.S. cannabis market at approximately $11 billion today and Fortune is predicting that it will double to roughly $23.4 billion by 2022! These cannabis stocks represent both marijuana and industrial hemp companies. Investors around the world are recognizing that cannabis is a huge market and are capitalizing on the rapid growth of cannabis related companies.
Cannabis stocks first began trading on the New York Stock Exchange in 2018. There are now over 12 cannabis companies listed on the major U.S. exchanges as well as many others that are listed on the OTC market. Although the stigma surrounding cannabis stocks is slowly disappearing, many investors are hesitant to invest in the majority of cannabis stock because of legal and political issues that surround medical and recreational marijuana. While medical marjiuana is legal in 31 states and a few states have also passed adult use recreational laws, marijuana is still federally illegal, which leaves many investors unsure about buying into the marjiuana market.
The Hemp Solution
One way that potential shareholders can invest in the thriving cannabis market without legal and political worry is through the industrial hemp market. The industrial hemp market is booming and this rapid growth is projected to continue in the future. Many analysts are even projecting that industrial hemp will outperform the marijuana market! In Canada, the markets are already showing the hemp industry outpacing the marijuana market. According to the cannabis research firm, Brightfield Group, the industrial hemp market was a $591 million industry in 2018 and is projected to explode to $1.65 billion by 2021!
Despite the confusion, hemp and marijuana are not the same plant. Industrial hemp is part of the cannabis family, but it is a genetically different strain than the cannabis strains used for medical and recreational marijuana. Hemp is non psychoactive, contains less than 0.3% THC, and is grown solely for its industrial use in a wide variety of products. Hemp has been used for over 10,000 years and has significant health and environmental benefits.
According to a 1938 article in Popular Mechanics there are over 24,000 uses for the hemp plant. With the increase in technology, knowledge, manufacturing, etc., experts now estimate that with whole plant utilization, the hemp plant has around 50,000 uses! Industrial hemp is used for textiles, car parts, pet supplies, biofuel, food, construction materials, and biodegradable plastic. The possibilities are endless, which means there is uncapped potential for the industrial hemp market.
One of the most popular uses of the industrial hemp plant is cannabidiol or CBD. CBD oil is used by millions of people in the U.S. and around the world to help with sleep, anxiety, pain, inflammation, and other ailments without the psychoactive THC component found in marijuana. CBD oil is also being used in a wide variety of products including cosmetics, health supplements, food and beverages, and pet products. The CBD market has skyrocketed in the past few years. Brightfield Group estimates that the U.S. CBD market will grow by 55% to $648 million in 2019! The enormous growth opportunity of CBD will be a catalyst for the hemp industry and for those interested in investing in hemp.
2019 - The Year of Hemp
Industrial hemp has been grown in the western hemisphere since the time of Columbus and has a rich history in the U.S. Many early colonists were required to grow hemp and several of the Founding Fathers and early presidents were hemp farmers. Industrial hemp was an important crop in America until it was first regulated in 1937 with the Marihuana Tax Act. In 1970 all strains of cannabis, including both hemp and marijuana, became illegal with the Controlled Substances Act. For the past 50 years, advocates, farmers, legislators, and businesses have tirelessly advocated for the return of hemp. In 2014 President Obama signed the 2014 Farm Bill, which paved the way for industrial hemp pilot and research programs.
In December 2018 President Trump signed the 2018 Farm Bill which took hemp off the federally banned and controlled substance list and opened this industry for the entire country. Growing and transporting hemp and hemp-based products is now federally legal. This bill ensures that farmers are able to secure crop insurance and obtain loans, and processors and manufacturers can transport hemp and hemp products across state and Tribal lines.
These changes have opened a brand new market for industrial hemp and have created a huge investment opportunity. State and tribal governments recognize that industrial hemp can bring substantial economic growth. States are quickly licensing growers and passing measures to ensure hemp is a viable industry in their area. Investors have been carefully watching these developments throughout first quarter of 2019 and are eager to capitalize on the emerging market that was created by the legalization of hemp.
Investing in Hemp
Hemp presents the rare opportunity for investors to be on the ground floor of a new and emerging industry. Many individuals are looking for ways to invest in hemp and to make this rapidly growing industry a large part of their investment plan.
There are very few public investment options that are only focused on industrial hemp. While some may be interested in large medical and recreational cannabis companies that are expanding into the hemp market, such as Canopy Growth (CGC) or Tilray (TLRY), many investors are hesitant to be exposed to the political and economic risks associated with the marijuana market. The marijuana industry has shown to be a market with significant ups and downs which has created instability in share price. The hemp market is seeking to change this situation. Hemp investors are backing companies with structured and sustainable models and are focused on the long-term. These investors believe that the emerging hemp market is not only sustainable, but that it will continue to grow for years to come.
Hemp Inc (HEMP), and Limitless Venture Group Inc (LVGI) are two publicly traded hemp companies that can be found on the OTC Markets. These companies are focused solely on industrial hemp and are both currently trading at less than $0.05. These penny stocks present an exciting opportunity for a wide variety of people to invest in this new market.
Limitless Venture Group is concentrating on creating a fully vertical hemp company through their wholly owned subsidiary, Summit Harbor Holdings. Under Summit Harbor, LVGI will have seed and grow operations, farms, processing and testing, construction, and various manufacturing companies all devoted to industrial hemp. They are currently working on fulfilling SEC requirements and are working towards listing on the Nasdaq. Many investors recognize LVGI as a tremendous opportunity to be part of the hemp market.
Industrial hemp is a new and exciting opportunity for investors. This emerging market presents significant economic and environmental benefits for investors, producers, and consumers. Although all investments contain risk, and investors should be aware of these risks when investing in the stock market, many individuals and companies are capitalizing on the legalization of hemp and the expected rapid growth of the hemp market. With cannabis revenues projected to hit $22 billion by 2022, investing in hemp is truly an investment in the future. LVGI and other industrial hemp companies present investors with the unique opportunity to be part of a new and emerging market.