SPI Energy Co Ltd (NASDAQ: SPI) is making a run for the top in the market this morning, trading on gains of nearly 60%. The gains come after the company announced the launch of a hemp and CBD business. Here’s the scoop:
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SPI Stock Rockets On Hemp And CBD Business Launch
In a press release issued early this morning, SPI Energy announced the launch of a newly established hemp and CBD business. Of course, the news excited investors as there is quite a bit of opportunity in the emerging hemp and CBD market.
In the release, SPI said that it has recently executed a management services agreement with the Native American Agricultural Company. Under the agreement, the NAAC will cultivate hemp in the Navaho Nation.
Moreover, the company said that it has obtained licenses from the Navajo Nation to engage in lab testing, cultivation, processing, wholesale distribution, and retail sales of hemp.
In the release, SPI said that hemp cultiavtion in the Navajo Nation is being overseen by a third-party management company. Also, the hemp is currently being cultivated on a 36-acre plto fo land licensed by the NAAC.
It is expected that the first crop will be harvestedin November of this year.
In a statement, Mr. Xiaofeng Peng, CEO at SPI, had the following to offer:
We are eager to enter the hemp market and happy to be working with the Navajo Nation. Some estimates have the global industrial hemp market growing from USD 4.41 billion in 2018 to close to USD 15 billion by 2026. We want to be part of that growth. The Navajo Nation and Native American Agricultural Company are excellent partners for us as we embark on this exciting venture.
Why Investors Are So Excited
CBD is a newly legalized substance in the United States, and it’s being met with incredible demand. Many believe that there are multiple health benefits associated with the substance, leading to the strong demand that we’re seeing.
Moreover, the market is massive. Current estimates suggest that by the year 2024, CBD will be a $20 billion business annually.
Considering the relatively minimal market cap held by SPI, an entrance in the CBD space gives the company the opportunity to generate significant revenue growth. So, there’s good reason for all of the excitement here.
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