As the 2016 U.S. presidential election nears, Hemp Inc (OTCMKTS:HEMP) has strategically positioned itself as a leader in the industrial hemp industry. The Company has the country’s largest industrial hemp processing facility and milling operation in Spring Hope, North Carolina nearing completion. CEO Bruce Perlowin, says, “I believe our industry, specifically public companies within this sector, is about to see the biggest spike to date. The industrial hemp and medical marijuana industries have been building their fundamentals over the last few years as more states have legalized hemp and medical marijuana or passed favorable laws. As we approach the 2016 elections, I foresee a potentially explosive growth curve for pot stocks again. That is less than 90 days away.”
“The hemp and cannabis industries are likened to another dotcom explosion,” said Bruce Perlowin, CEO of Hemp Inc. “Not only are industry-related companies benefiting from this green rush, individuals are too. People have been cashing in handsomely from the legalization of marijuana in several states. Hemp, Inc. is positioned at the forefront of this booming industry. We will be able to process industrial hemp and manufacture products made from hemp, as well as Lost Circulation Material (LCM) and other absorbent materials in the commercial decortication plant once it is operational.”
Perlowin embraced the title of ‘King of Pot’ and as Forbes reported, Perlowin got the idea to launch the first publicly-traded medical marijuana company in 2009 after he was featured in a CNBC documentary called Marijuana Inc. One of the publicly-traded companies he founded through a reverse merger was Hemp.
Shares of industrial hemp and medical marijuana company, Hemp declined as much as 25% during early trading hours on Wednesday, June 22, 2016, after the U.S. Securities and Exchange Commission (SEC) announced they had filed charges against Hemp’s CEO, Bruce Perlowin on June 21, 2016. The SEC alleges that Perlowin has been running a long-standing fraudulent scheme by selling hundreds of millions of the Company’s shares that were unregistered and not properly filed with the SEC. Here is more information on the SEC charges and the alleged fraud:
Federal securities regulators have filed a complaint against Bruce Perlowin that charges the CEO of the publicly-traded company of committing a long-running fraud by evading securities registration provisions and selling hundreds of millions of unregistered shares.
The SEC claims that as CEO Perlowin conveyed hundreds of millions of shares to companies controlled by Perlowin’s brother, Jed Perlowin, and Barry Epling, to be sold in public markets. Those companies entered into what the SEC describes as sham consulting deals with the Company and some of the shares were given as gifts. In 2012, for example, one company linked to Epling received 100 million shares in recognition of “affection and appreciation for over 20 years of friendship and loyal assistance,” the SEC complaint says.
According to the complaint the SEC filed in federal court, Epling’s companies sold the shares they received and “used a material portion of the proceeds for the benefit of and at the direction of Bruce Perlowin and Hemp.” Jed Perlowin’s companies also sold millions of shares and used some of the proceeds for the benefit of Perlowin. The SEC claims the shares that were sold in such a way to investors were restricted but that investors purchasing them via market transactions would have reasonably believed they were unrestricted shares. The SEC says the Company failed to file a registration statement with the SEC. In addition to Perlowin, the SEC has filed fraud charges against Jed Perlowin, Epling, and the Company.
Whatever happens to Perlowin remains to be seen but, in any event, it may be good news for the Company if he is either replaced and it is left standing or whether he is acquitted of the charges. Industry veterans equate what is taking place today to the “gold rush” of the mid-1800s, referring to it as the “green rush” of today. Hemp, Inc.’s multi-purpose industrial hemp facility is over 70,000 square feet and is nestled on 9 acres. It’s the only one in the U.S. of this scale and magnitude. David Schmitt, COO of Hemp, Inc.’s wholly owned subsidiary Industrial Hemp Manufacturing, LLC reported that everything remains on schedule.
There are already 25 states, include D.C., that have enacted laws to legalize medical marijuana: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont and Washington.
This could be a transformative year in more ways than one. Not only are voters heading to the polls in November to decide who should become the next President of the United States of America, but voters in quite a few states could be heading to their respective state polls to decide whether or not to expand the use of medical or recreational marijuana within their state. There are three states where a legal marijuana vote is guaranteed to come about this November-that being, Nevada, Florida, and Maine.
As a result, I’d keep an eye on the industry coming up to this November, especially Hemp due it positioning itself as a leader in the industrial hemp industry and the discount offered in the shares by the SEC’s suggested improprieties. We will be updating our subscribers as soon as we know more. For the latest updates on HEMP, sign up below!
Disclosure: We have no position in HEMP and have not been compensated for this article.