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Medical marijuana update: Global Hemp Group sets sights on African hemp

Chris Parry Chris Parry, Stockhouse.com
5 Comments| April 23, 2014


Massive fields of hemp, jobs and profits flowing through African hands, and a fat supply of product destined for processing in North America; that’s the vision behind a deal between Global Hemp Group (CSE:C.GHG, Stock Forum) and African investment accelerator African Frontier Partners announced Wednesday.
 
A cursory investigation of AFP finds they’ve worked with some impressive outfits – and governments - in Africa and the west, in fields as diverse as software development, crowdfunding, energy and angel investing, and the potential uses for industrial hemp, frankly, boggle the mind.
 
But the market didn’t see reason to applaud when GHG released their news today, with a trading volume of 0 rolling through noon. In fact, GHG’s share price is trading 33% below its price on the first day it listed.

(UPDATE: Since this article was posted, GHG has jumped 17% - well played, readers)
 
In comparison, Premier Brands (OTO:BRND, Stock Forum), a company that four days ago had a $180,000 market cap and says it might sell medical marijuana products at some point in the future but can’t say what or when, drove up 24% with 132 million shares changing hands. It’s up 300% in the last handful of days.
 
The reason behind GHG’s lack of momentum from what looks like very big plans with an outfit capable of helping them deliver at a low cost is simple; nobody gives a toss about industrial hemp.
 
And that’s madness.
 
Medical marijuana is all well and good, but hemp has the potential to replace something you may know as ROLLING PAPER. It makes better rope. It can be used in textiles, foods, shoes, wax, resin, you can make hemp-based milk – even biofuels. You can put it in a salad, for crying out loud. The Japanese use it as a food seasoning. It’s been used in some parts of the world as a ‘mop crop’ to suck impurities out of the water supply. You can combine it with lime to turn it into concrete-like building blocks. You can use it to make fibre board and thermal insulation, plastics and fibreglass. It doesn’t suck the land dry, it doesn’t cost much to grow or harvest, it’ll grow in horrible conditions, and it grows so dense that it’s actually used as an organic weedkiller by farmers, in that it crowds other weeds out.
 
And before the Reefer Madness craze that saw North American authorities kill, jail and/or burn anything cannabis related in the early 20th century, it was an American staple crop. George Washington grew the hell out of it.
 
You know who leads the world in hemp production now, with nearly 80% of the world supply? China.
 
Because China’s not stupid.
 
So Global Hemp Group sees Africa, with its harsh growing conditions that hemp doesn’t mind, low operating costs and abundant inexpensive workforce, as a viable place to grow stonking great piles of the stuff, to be sold all over the world and for dozens of different industries, and the market wants to instead put its money in Weststar Resources (TSX:V.WER, Stock Forum), which has only said it’s in “advanced negotiations” on something medical marijuana-based and is today up 10%?
 
The feeding frenzy on medi-maryjane is justified, for mine, as we are on the cusp of a new industry that will affect many, many other industries and see billions raised, produced and shared. But will the big money be made feeding supply to 40,000 (or even 400,000) Canadian medical patients, or ending the need for forests to be cut down to make paper? Will the fat money be in inhalers and infusers or in biofuel and construction materials?
 
Hemp isn’t sexy. It doesn’t get you high. It’s not a conversation starter. Hemp conventions will not include ‘smoke pits’ and teenagers won’t be all over Twitter boasting about their investments in it.
 
But if you look past the next twelve months at what happens when medical weed has such an oversupply that you can’t get more than $3 a gram for it, and three companies have developed brands that generally dominate the industry like Starbucks, marijuana-associated industries are going to be where the money flows and where profits are made.
 
In short, do you want to own the drill, or the mill?
 
The GHG release today, for mine, is the first sign of an X100 plan out of a weed convert. And nobody cared.
 

BIG DEAL ALERT:
Calgary-based Tilting Capital (TSX:V.TLL.H, Stock Forum) may not ring any bells for you, but that’s the listing that is going to be RTOed by MMJ Bioscience, a Duncan, B.C.-based private company with 14,000 sq. ft. of growing already in play and multiple proprietary strains of IP in stock, along with a purchase of a 62,000 sq. ft. facility to grow into.
 
This is no mining company convert – this is the real deal. The current listing has a $3.1m market cap, tight share structure, and has settled internal debts. MMJ Bio has Cannaccord advising them financially, they have cash in pocket, and they’re looking for acquisition options. Meanwhile the stock is trade halted while the TSX looks over paperwork.
 
Instant player.
 

ELSEWHERE IN THE NEWS:
Maple Leaf Green World (TSX:V.MGW, Stock Forum) has announced it has agreed an option on the leasing of a large greenhouse facility on the CN rail line in Telkwa, B.C. that will (assuming the operator is successful in getting an MMPR license) see them renting 80,000 sq. ft. of greenhouse space and access to equipment and lab. The deal includes an option to buy the entire nursery at ‘market price’.
 
The company plans to grow 7,000 kilograms of medical weed per year with the option to expand at will if it buys out the facility.
 
MGW shares up 13% on the news.
 
 
Easton Pharmaceuticals (OTO:EAPH, Stock Forum) has pushed through some SEC paperwork that gets them closer to being able to raise $5 million in committed financing, which should get them through the next year – and allow it to purchase majority control of its early stage cancer drug Xilive, and gets its Viorra product to market.
 
The news saw them drop 12% of their share price, because, hey, they’re only curing cancer here.
 
 
UPPERS:
Bayhorse Silver (TSX:V.BHS, Stock Forum), which is a Stockhouse Publishing client, jumped 13% today on no news. Affinor Resources (CSE:C.AFI, Stock Forum) climbed 11.6% in ditto fashion, and big daddy Tweed (TSX:V.TWD, Stock Forum) eked up 2% in today’s trading, at the time of writing.
 
Affinor is in my top 5 weed stocks to watch list, and it looks to me like this is as close to a dip as you’re likely to find on the company going forward. Powder dry,
 
 
DOWNERS:
Serial zig-zagger Papuan Precious Metals (TSX:V.PAU, Stock Forum) drove down 21%, nearing where it was two days ago. Spearmint Resources (TSX:V.SRJ, Stock Forum) dropped 17%, and Calyx Bio-Ventures (TSX:V.CYX, Stock Forum), which is a Stockhouse Publishing client, fell 17%.
 
 
IN BRIEF:
Majescor (TSX:V.MJX, Stock Forum) announced the closing of its 2nd tranche of a non-brokered private placement. Amount of money raised? $15,000. While GHG was looking to plow Africa, Majescor was successfully raising the cost of a 2008 Buick Enclave.
 
Creative Edge Nutrition (OTO:FITX, Stock Forum) signed Dr David Felten to its board of directors, to help drive its CEN Biotech arm. They also signed banker John Germinario as Chairman of the Board.
 
Big NASDAQ cannabis-based pharma play GW Pharmaceuticals (NASDAQ:GWPH, Stock Forum) got a big spike in value after Morgan Stanley set a $103 price target on the $46 stock, and CNBC’s Jim Cramer went ballistic on it - again.
 
Supreme Pharmaceuticals (CSE:C.SL, Stock Forum) has completed their jump to the Cannabis Stock Exchange… Oh, sorry, the Canadian Stock Exchange. Less regulatory worries, less paperwork, less expense… less investors watching?
 
Clark County, Nevada took 206 applications from companies wanting medical marijuana licenses in Las Vegas and surrounds this week. 90 of those are for dispensaries, 70 for growing, 45 for production and one for testing.
 
Puerto Rico is considering legalizing marijuana – and prostitution.
 
The Province newspaper yesterday posted an article about the dangers of investing in medical marijuana that could have been re-headlined “We were asked to do a medical marijuana piece by noon and wow, is this a thing?” Bottom line: Be careful where you invest your money. Addendum: Duh.
 
Not to be outdone, Vancouver Sun rage-troll Shelley Fralic did the annual “smokers are gross” piece in the wake of 4/20, where she claimed the 420 terminology “reportedly” came from a bunch of kids smoking up at 4:20pm after school. She presumably put the ‘reportedly’ disclaimer in there because she wasn’t actually sure about the validity of her claim, and didn’t bother taking five seconds googling ‘420 origin’, which would have shown it’s actually the San Francisco police code for ‘marijuana smoking in progress.’ In her defense, none of her editors bothered to check either.
 
The rest of the column is about as well researched as that claim. My favourite is her claim decriminalizing marijuana will “add to the social, mental and physical turmoil already created by other legal and illegal vices,” which is quickly followed with the line “Forget, for a moment, all the cogent arguments on both sides of the should-we-or-shouldn’t-we decriminalize pot debate.”
 
Yes, forget the cogent arguments. Just make outrageous claims without any cogent backing, right? Much more helpful.
 

THE MOVERS: (updated 3pm Eastern)
 
V.TFR   0.020 +0.005 +33.33% 13.4k
BRND   0.004 +0.001 +21.21% 139.92m
C.GHG   0.100 +0.015 +17.65% 82k
V.BHS   0.125 +0.015 +13.64% 20k
V.MGW   0.085 +0.010 +13.33% 1.58m
C.SL   0.055 +0.005 +10.00% 1.17m
C.AFI   0.330 +0.030 +10.00% 3.41m
V.WER   0.055 +0.005 +10.00% 113k
V.PFN   0.075 +0.005 +7.14% 7.87k
V.NSP   0.290 +0.005 +1.75% 35k
PMXO   0.030 +0.001 +1.69% 474.8k
V.TWD   3.430 +0.050 +1.48% 936.87k
FITX   0.087 +0.001 +1.16% 38.5m
V.EEC   0.250 0.000 0.00% 0
V.ACP   0.050 0.000 0.00% 0
PHOT   0.502 0.000 0.00% 0
V.SEW   0.340 0.000 0.00% 0
V.THC   0.080 0.000 0.00% 395.59k
C.SOU   0.440 0.000 0.00% 0
V.SNR   0.135 0.000 0.00% 0
V.PXR   0.025 0.000 0.00% 0
V.CMT   0.465 0.000 0.00% 0
V.MSC.H   0.225 0.000 0.00% 170.51k
V.WPO   0.050 0.000 0.00% 0
V.MJX   0.070 0.000 0.00% 0
V.JOR   0.035 0.000 0.00% 2.5k
V.GSW   0.100 0.000 0.00% 0
V.THP   0.180 0.000 0.00% 0
V.AXQ   0.040 0.000 0.00% 485k
C.GBC   0.150 0.000 0.00% 0
V.VVN   0.040 0.000 0.00% 91k
V.CL   1.190 -0.040 -3.25% 6.59k
V.AWH   0.080 -0.005 -5.88% 79.02k
V.PFE   0.070 -0.005 -6.67% 18.43k
V.BUD   0.060 -0.005 -7.69% 519.37k
C.ATT   1.180 -0.100 -7.81% 430.92k
MDRM   0.127 -0.012 -8.30% 173.56k
V.AMS   0.100 -0.010 -9.09% 5.5k
NGMC   0.026 -0.003 -9.28% 885.1k
V.CVN   0.045 -0.005 -10.00% 7k
C.TOP   0.335 -0.040 -10.67% 18.6k
V.WIF   0.125 -0.015 -10.71% 119k
ROSV   0.050 -0.008 -13.41% 143.68k
EAPH   0.031 -0.005 -13.52% 14.18m
C.N   0.220 -0.035 -13.73% 67.25k
RAGO   0.068 -0.012 -15.25% 220.06k
C.AXO   0.150 -0.030 -16.67% 45k
V.CYX   0.070 -0.015 -17.65% 58k
V.SRJ   0.070 -0.015 -17.65% 65.5k
V.PAU   0.055 -0.015 -21.43% 519.85k
 


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Comments

jerrio78
You nailed it Chris, I like AFI going forward and as far as hemp i like NSP's chances of turning a profit but hemp hearts on my oatmeal is not as sexy as medical marijuana going ballistic this year.
4.5 stars
April 23, 2014
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Wilddieb
I do not agree at all guys. We are in the beginning of a revolution, some carmakers for example are already using first hemp lots. So at the end, lossmaker companys will be sorted out soon in a few months, then lets discuss again.
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April 24, 2014
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Chris1029384756
Hemp is truly an amazing crop, but since it can't be patented or controlled it will never be accepted by big business! I don't blame investors for being skeptical of hemp investments, there's no economic "moat" there. Medical MJ is something that is about to explode and everyone knows it, hence the ridiculous stock price gains following mostly empty press releases. Thanks again for the article Mr Parry
2.5 stars
April 23, 2014
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JAYLIN
EAPH because hey, a Reg A share offering means massive dilution, jack ass
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April 24, 2014
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Johnny881
FITX has both bases covered with their acquisition of Hemp Technologies. http://www.stockhouse.com/news/press-releases/2014/03/17/creative-edge-nutrition-fitx-medical-marijuana-industrial-hemp-dietary
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April 23, 2014
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