HempAmericana Inc (OTCMKTS:HMPQ) shares are starting to show some fresh life. This is a core name in one of the fastest growing market segments in the US domestic consumer goods market right now. So, when we see some strength, we want to understand more. The latest action appears to be a confluence of difference forces. But the company’s most recent announcement may shed some light on what’s next for the stock.
Our analysis suggests there may be a theme in play that runs according to the following logic: the company has been working to establish a narrative based on having in-house access to genetic strains and extraction technology that both contribute to a differentiated product, and they have stored up a powerful inventory that has market value not that far shy of 7 figures right now, with the potential for much more in the future.
That puts the game squarely in the zone of distribution and marketing. Now, in its latest announcement, we see the company has signed a big LOI with Smart Decision, Inc. to participate in an algorithmic product recommendation system. That represents a potential game changer for a company that has already positioned itself as a preeminent leader in the space.
Adam Green, CEO of Smart Decision, stated, “We’re excited to have the opportunity to work with HempAmericana. Their operations and CBD manufacturing processes are both unique and truly impressive. Hemp Americana’s CEO, Sal Rosillo, is a visionary in both the Cannabis and CBD space. CBDSmartDecision.com will be the first company that has HempAmericana’s permission to recommend their product range on the affiliate level.”
For Some Context
In its prior release, the company noted that it has already received a growing number of orders for full-spectrum CBD oil, with sales of 125mg thru 2000mg 1oz bottles already booked and in transit as it launched its own ecommerce solution. That presents a powerfully prepotent reality into which to introduce this latest relationship.
“The initial market response has been extremely gratifying to see,” commented Salvadore Rosillo, CEO of HempAmericana. “Following the official launch of our new online CBD sales portal, traffic has been strong and we anticipate robust sales growth ahead.”
That’s obviously a strong sales context. But the stock failed to react. Our sense would be tied to the idea that the product inventory was in place, a sales vehicle was established, but the marketing channel was still missing. The company is working to find the answer to that missing piece, but this latest LOI with Smart Decision is very strong piece of that puzzle.
Being integrated into an algorithmic product recommendation system like this could push a thick stream of leads to the company’s sales team, sparking a self-reinforcing feedback loop of success, especially with such a well developed inventory of premium product already sitting on the shelves ready to hit the market.
Rule Number One
The most important rule we have found with speculative names is this: Look for “prepotency.”
In this case, “prepotency” means the company is at the point where it has solved every problem but final end-market engagement in a market that is, itself, growing at a robust clip.
That would appear to be the case for HempAmericana right now because it has a strong stable of products, it’s built up a major inventory, it has a system through which it can continue to produce top quality products in a fast-growing market at efficient pricing, and now it has a strong lead-generation vehicle based on next-gen technology.
As shares begin to find some traction, we wouldn’t discount the action in HMPQ at this point. There’s something important in play here right now.