Rally On, Traders!
By now you know that the latest Farm Bill legalized a crop that's effectively been banned since the 1940s. As long as the products don't contain the psychoactive molecules, growers are now free to plant, harvest and process the raw material into what could easily become the next wave of FDA-approved pharmaceutical blockbusters.
But even though 7% of the American population has already started buying these now-legal products, sources of supply haven't kept up. Production needs to ramp up 70X (that's 7,000%) to meet anticipated demand by 2025. That's why companies like Upper Street Marketing Inc. (OTC:UPPR) are already playing a crucial role.
UPPR may be small today, but they saw which way the regulatory wind was blowing. They secured 300 acres of Colorado farmland and got to work. Their first crop looks like it'll be ready to harvest by early October, which puts the company on a five-month track toward its next revenue milestone.
And that could be a big one. The latest press release indicates that yields per acre can ultimately top $200,000. Multiply by 300 acres and it's no wonder management has forecast $75 million in revenue this year as a goal.
Put that in context: UPPR is still a startup, maybe trading at $50 million down here at under $1. That's 0.6X anticipated 2019 sales. Compared to one of the "green" giants like Aurora or Canopy, which currently command sales multiples in the 40X zone.
Granted, those companies deal with the psychoactive molecules so there's literally more buzz around what they do. But they're also at the mercy of shifts in the regulatory wind whereas UPPR has the full weight of law on its side. People are already buying these products out in the open. Corporations are also lining up to build the molecules into new foods and even FDA-approved drugs.
That's right. The FDA has already given this end of the green industry a big green light. Now all the growers need to do is step up to meet the need. The last number I saw said that there's capacity now to produce 50,000 kilograms of the extract a year. Demand could easily top 3.5 MILLION.
No wonder this stuff can cost close to $300 per OUNCE ($10,000 / kg) on the open market! Everybody wants it . . . the acreage just hasn't come online yet. When UPPR harvests, it's going to be reaping pure reward.
Unlike people who are prisoners of the map and its fluctuations, UPPR saw the writing on the wall. State by state deregulation was moving too slow. When it happens, it happens. For now, why not cut out a lot of the hassle and focus on the business that Congress just legalized?
Remember, we aren't urging you to explore the products themselves. That's between you and your own consumption patterns. We're talking to you as an investor looking for interesting companies that might be worth your participation. If the companies succeed, presumably shareholders will share in that story.
From what we can see, UPPR has what it takes to deliver transformative levels of success. After all, it's still just a start-up, under $1 per share at this stage in its evolution. Market cap is barely $55 million as I write this.
What more do you expect? That farm bill just got signed back in December and a $35 billion market is still up for grabs. It's anybody's game and everybody with their eyes open can still grab a slice of the pie. Maybe UPPR can grab 1% of $35 billion and that's a breathtaking 6X current market cap. Maybe just 0.1% and its price to sales ratio drops to near par.
Giants like Tilray have supported sales multiples in the 160X zone. To even compare with that, little UPPR would only need to bring in $138,000 this year, which is 0.0004% of the $35 billion market. That's all. For every $1 million people are projected to spend here, if UPPR can capture a mere $4 it lines up well to the giants.
Don't forget that UPPR can squeeze a whole lot more than $138,000 from its acreage. That's barely what a single acre can yield and they've got 300+ to work with . . . not to mention an option to plant 7,000 more once this "pilot" program delivers results.
Anything more and . . . I don't need to tell you the way multiple expansion works. Keep in mind that this is STILL the industrial end of the plant. No mind-altering effects. Just natural molecules and nutrients.
As is often the case, the non-sexy side is actually where the big money is. Let's call it what it is: hemp. It's legal to grow, legal to advertise. Hemp can do a lot of stuff. Henry Ford made a car out of it back in the 1940s when the war made plastic and metal hard to get. (VIDEO)
Today, renewable hemp crops can theoretically even power that car in the form of biomass fuels. Sustainable, regrowing, endless, lucrative.
Hemp paper, hemp clothing, hemp seed, hemp fiber, hemp plastic. There’s a chemical universe locked up in this plant that was illegal for generations. UPPR is starting at the top of that value chain with products infused with the
essential oil.
Even when this was a legally nebulous zone last year, hemp oil was a $35 BILLION land grab opportunity for companies willing to stake their claim early. The size of that market is a factor of the buzz around health benefits . . . people are eager to try it for pain, inflammation, epilepsy and just about everything else.
The important thing here is that UPPR saw the boom coming and got in big. They want to produce 1.8 MILLION pounds of hemp, enough to cook down into 40 TONS of the oil.
As the CEO is telling people, that’s going to be “a very large player, very quickly.” And it’s only the sizzle on top of this story.
The acreage is in Colorado, Mile High stronghold of the other kind of state-legal hemp. That end of the business already brings in millions . . . and if I read this right, production is set to zoom 700% in the near term.
They get something out of it. We’ll find out what. In the meantime, it’s a demonstration of the company’s widening footprint in the space.
And speaking of widening footprints, keep the hemp map in mind. On the other side, progress has sometimes been fast and sometimes the federal government has slammed the brakes, taking the stocks with it . . . after all, the state-by-state end of the industry is still technically prohibited.
Sure, the guy currently up for Attorney General says he won’t chase people operating legally on their own turf. But he doesn’t back legalization either. And remember how much trouble the LAST guy became when he threatened to enforce federal law across state lines.
But hemp is enshrined in the federal Farm Bill, from sea to sea. You can’t put that genie back in the bottle without a lot of heavy lifting I don’t think Congress can handle right now.
Ever want a more stable play on the green theme? Hemp is now it. All the progress, none of the backsliding or the dithering. And UPPR is right there in the thick of it.
Let me show you the Big Three charts in this space and then I’ll show you UPPR. Here’s the usual suspects, all trading alike, up a lot and then down:
They come and go with the regulatory winds. And here’s UPPR more recently. The trend has been UP UP UP. Multi-bag action making buy-and-hold types happy throughout the trailing year, no matter where they came in:
If you want to invest in the Green World, you can go with your favorite sizzle and take your chances on the map staying open. Or you can go with something superficially quieter . . . but the regulatory framework is now a done deal.
Check those charts again. Which has been an easier ride? And which one has open sky to work with now?
Contact: For more information about Upper Street Marketing, please call: Toll-Free: (844) 535-UPPR (8777) Email: investorrelations@upperstreetmarketing.com
Happy, Happy, Happy Trading!
