The Farm Bill should ignite explosive growth in the hemp market
Hemp is anticipated to be legal to grow across the United States beginning on Jan. 1, 2019. This has huge implications for the cannabis industry because hemp can be used to extract cannabidiol (CBD), a chemical found in the cannabis plant that has been associated with a wide range of medical and wellness benefits.
Given the massive growth projections for hemp, some forward-looking cannabis companies that have been focused on marijuana have recently been positioning themselves to profit from the U.S. hemp market. One such company is MariMed (NASDAQOTH: MRMD).
On Tuesday and Wednesday, the U.S. Senate and House of Representatives, respectively, overwhelmingly passed the latest version of the 2018 Farm Bill, which contains provisions that would make it legal on a federal level to grow industrial hemp. President Trump is widely expected to sign the bill by year's end, with the effective date likely Jan 1, 2019.
If the current Farm Bill becomes law, the U.S. market for hemp is projected to explode. Relevant to cannabis investors, the U.S. hemp-derived CBD market is expected to balloon by about 37 times in just four years, according to cannabis research firm Brightfield Group. That firm expects the market to grow from about $591 million in annual revenue this year to $22 billion by 2022.
MariMed, based in the Boston area, is a multistate cannabis company that develops, owns, and manages cannabis cultivating and processing facilities as well as branded product lines.
In the third quarter, MariMed's revenue soared 98% year over year to $3.4 million. According to its earnings release, this growth was driven by increased rental income from its facilities in Maryland and Massachusetts, higher revenue from cannabis supply procurement services, and increased "management fees and additional rental revenue ... [from] its cannabis-licensed clients." Operating income rocketed 200% to $861,000, the net loss widened 2,500% to $10.2 million, and the loss per share came in at $0.05, versus $0.00 in the year-ago quarter.
The fact that MariMed generated a profit on an operating basis is more than nearly all other cannabis companies can say. MariMed's net loss widened because, like nearly all players in the cannabis space, it's investing heavily in growth initiatives. The company ended the quarter with $6 million in cash. Given its annual cash burn rate of $19.9 million through the end of the third quarter, its cash position is the first thing investors should be monitoring, but no more than any other cannabis company.
https://finance.yahoo.com/news/hemp-verge-u-l...00182.html
Hemp is anticipated to be legal to grow across the United States beginning on Jan. 1, 2019. This has huge implications for the cannabis industry because hemp can be used to extract cannabidiol (CBD), a chemical found in the cannabis plant that has been associated with a wide range of medical and wellness benefits.
Given the massive growth projections for hemp, some forward-looking cannabis companies that have been focused on marijuana have recently been positioning themselves to profit from the U.S. hemp market. One such company is MariMed (NASDAQOTH: MRMD).
On Tuesday and Wednesday, the U.S. Senate and House of Representatives, respectively, overwhelmingly passed the latest version of the 2018 Farm Bill, which contains provisions that would make it legal on a federal level to grow industrial hemp. President Trump is widely expected to sign the bill by year's end, with the effective date likely Jan 1, 2019.
If the current Farm Bill becomes law, the U.S. market for hemp is projected to explode. Relevant to cannabis investors, the U.S. hemp-derived CBD market is expected to balloon by about 37 times in just four years, according to cannabis research firm Brightfield Group. That firm expects the market to grow from about $591 million in annual revenue this year to $22 billion by 2022.
MariMed, based in the Boston area, is a multistate cannabis company that develops, owns, and manages cannabis cultivating and processing facilities as well as branded product lines.
In the third quarter, MariMed's revenue soared 98% year over year to $3.4 million. According to its earnings release, this growth was driven by increased rental income from its facilities in Maryland and Massachusetts, higher revenue from cannabis supply procurement services, and increased "management fees and additional rental revenue ... [from] its cannabis-licensed clients." Operating income rocketed 200% to $861,000, the net loss widened 2,500% to $10.2 million, and the loss per share came in at $0.05, versus $0.00 in the year-ago quarter.
The fact that MariMed generated a profit on an operating basis is more than nearly all other cannabis companies can say. MariMed's net loss widened because, like nearly all players in the cannabis space, it's investing heavily in growth initiatives. The company ended the quarter with $6 million in cash. Given its annual cash burn rate of $19.9 million through the end of the third quarter, its cash position is the first thing investors should be monitoring, but no more than any other cannabis company.
https://finance.yahoo.com/news/hemp-verge-u-l...00182.html
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