- SeeThruEquity recommends a share price of $0.30
- Bill would make hemp an ordinary agricultural product and no longer a controlled substance
- Hemp-derived cannabidiol market worth $591 million, expected to hit $22 billion in under five years
With the U.S. Congress on the verge of making hemp an ordinary agricultural crop instead of a controlled substance, hydroponics supply company Sugarmade, Inc. (OTCQB: SGMD) has made comments on its recent venture into the hemp market (http://cnw.fm/S9kaJ).
Sugarmade last month announced that it was investing $1 million in Hempistry, Inc., a company producing ultra-high cannabidiol hemp. Hempistry in July started work on cultivating hemp on 23,000 acres of farmland in the U.S. state of Kentucky.
In a news release, Sugarmade CEO Jimmy Chan commented, “We are especially excited about the particular strain of hemp that was planted, which is expected to yield up to 14 percent CBD. Such a strain of product is in significant demand and it is expected that the entire crop will be sold prior to harvest. Our timing on our investment could not have been better considering the pending Farm and Hemp Bills and demand situation, which seems to get tighter almost every day.”
In addition to its investment, Sugarmade is negotiating a deal to supply Hempistry with cultivation supplies.
The hemp-derived cannabidiol market, worth $591 million this year, is expected to reach $22 billion by 2022, according to analysis by Brightfield Group (http://cnw.fm/XP4ff). The bill becoming law will, among other things, make it easier for companies to transport hemp across state lines and have access to insurance.
Another key benefit is the likely growth in the market for CBD, a cannabis component that has pharmaceutical applications and does not cause intoxication.
Chan added, “We expect the passage of the Farm Bill to further open the markets for industrial hemp and the cannabis components derived from hemp. It is an exciting time in the hemp industry. We are very pleased to have already made a significant investment into hemp cultivation that we believe will create strong additional value holders for Sugarmade common shares.”
Sugarmade’s expansion into the hemp market comes as Independent research firm SeeThruEquity announced that it is to begin coverage of the company (http://cnw.fm/aL45R). SeeThruEquity, in its first report, said, “Sugarmade appears well-positioned to target the large and growing opportunity to supply hydroponics equipment and supplies to the cannabis cultivation market in the United States through its master marketing agreement with BizRight.” It recommends a target share price of $0.30 for Sugarmade.
Discussing the coverage, Chan said, “Having Sugarmade highlighted by SeeThruEquity is important to this management team. Over the past two years, Sugarmade has almost completely restructured. We have entered one of the fast-growing sectors of the American economy, reduced debt levels, added a significant number of personnel, moved our headquarters, and most importantly, positioned our Company for substantial growth. Based on our growth rates, we now believe our $30 million revenue guidance for next year is very conservative. We welcome SeeThruEquity’s research coverage and look forward to supplying its analyst a steady stream of news on high quality developments regarding our progress.”
For more information, visit the company’s website at www.Sugarmade.com
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