By: Dylan Sikes - AllPennyStocks.com News

Tuesday, February 11, 2014

It doesn’t seem possible for an investor to look at news feeds in recent months without seeing countless headlines about marijuana. With legislation changing in Canada and 20 U.S. states and the District of Columbia approving cannabis for use in one form or another, companies are popping up out of the woodwork with new initiatives to capitalize on the exploding industry. Nearly everyone is talking about how their favorite company is going to be the go-to name in the medical or recreational marijuana business. Hey, pot stocks are on a tear, so have at it, just take the time for due diligence. Looking at some other news today highlighted a growing industry in the marijuana business; that of hemp. Hemp is a distinct variation of the cannabis stavia plant (with only about 1 percent of the psychotropic chemical THC) that is grown for a variety of uses, including, but limited to, linen, paper, rope and for its nutrients. The plant has been grown and consumed for centuries as it qualifies as a complete source of proteins, meaning that it contains all eight essential amino acids in sufficient quantities to meet the body’s needs.

Sales of hemp products are growing strong, with Canadian exports rising 64 percent from $20.9 million in 2012 to $34.2 million through October 2013. If the pace was maintained in November and December, exports doubled year-over-year. Nearly all of the exports went to the United States.

British Columbia-based Naturally Splendid Enterprises (TSX-Venture:NSP) is focused on the nutritional components of hemp, offering a full line of “superfood” hemp-based products under the NATERA™ brand. Superfoods are defined as products that are very dense in nutrients, yet low in calories, making them popular with health-conscious individuals. The products, which are sold it major retail and specialty stores across Canada, include plain and flavored shelled hemp seems and protein powders. The products can be found in Urban Fare, Sobeys, Save On Foods, Marketplace IGA and London Drugs, just to name a few.

Naturally Splendid also has a sales agreement with Boreal Technologies to market and distribute plant-based omega products, an industry that Packaged Facts estimated at $24 billion in 2011 and expanding at 12 percent annually. Using proprietary microencapsulation and liposome technologies to increase shelf life and provide a superior delivery method to traditional omega supplements, the products can be manufactured in beverages, capsules, powders and foods. Through the agreement with Boreal, Naturally Splendid has exclusive rights in North America and plans to market a complete line of these products under the brand names HempOmega™, H2Omega™, FlaxOmega™, ChiaOmega™ and CanolaOmega™.

Through a growing list of distributors, rebranding and marketing efforts, sales of NATERA in the fourth quarter of 2013 were expected to equal the total of the first three quarters of the year. The rebranding efforts to replace “Naturally Splendid” products with NATERA products only took place in October, but they are receiving support from retailers as discernable from management commentary about a strong fourth quarter. The company said on Tuesday that the first purchase order from London Drugs of the new NATERA products, including four new flavors, has now been shipped with destinations across British Columbia, Alberta, Saskatchewan and Manitoba.

Investors will likely be paying attention to the next financial report from Naturally Splendid. Sales have been minimal, approximately $77,000 through the first nine months of 2013, but if the company shows significant sales expansion, this growth story could get some wind in its sails. Shares have made some nice swings in the past year, from lows of 14 cents to a high of 30 cents and are currently holding in the middle at 21 cents for a flat day on Tuesday. The company arguably needs to post better revenue, but with some cash in the bank, only 28.7 million shares outstanding and a small market capitalization of $6 million, there is certainly upside potential if the hemp and omega products start flying off the shelves at retailers. Proper due diligence is, as always, encouraged.

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