CropLogic (ASX code CLI) saw its shares almost double to 4.3 cents in April, due almost entirely it seems to its decision to go into direct cultivation of industrial hemp in the US.
Until recently, its business focus was on providing agronomy advice, backed by smart monitoring technology, to help other people grow things (especially potatoes) more efficiently.
That is still the main business, but in March it announced that it had acquired a 150-acre trial farm in Oregan to showcase the value of its technology in growing hemp. Oregan has more than 550 growers licensed to grow hemp over a total of 11,000 acres. The blue sky for CropLogic is the estimate that the hemp market in the US will triple to $US22 billion by 2022, following changes to legislation.
Last week the company announced it was expanding the trial hemp farm from 150 to 500 acres.
The company believes the knowledge gained can be applied not only in the US, but in the emerging industrial hemp market in Australia.
Hemp also doubled the share price of the WA vegetable grower Wide Open Agriculture (WOA) in a month, before profit-takers moved in. It was granted a licence at the end of February to grow industrial hemp and the first crop has already been planted in its "smart" shade houses. Hemp would normally be planted in the open in September and October, but WOA is aiming for winter cropping and year-round production, and is testing three varieties.
The Punter bought shares in WOA in May last year. When he sold them, five months later, at 10c, he had lost half his money. Investors are now lining up to buy them at 14.5c (heavy sigh).
The Punter has considered putting more money into CLI shares and buying back into WOA, but has decided to wait and see if the market as a whole takes a breather after the recent run.
- The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.