What Is Going on With Hempacco (HPCO) Stock Today?

  • Hempacco (HPCO) fell after trading as high as $34 per share on its IPO day.
  • The company makes hemp cigarettes built around CBD, which are legal in most of the U.S.
  • It has a market cap of $175 million to $200 million after sales of $1.8 million in the second quarter.
HPCO stock - What Is Going on With Hempacco (HPCO) Stock Today?

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Hempacco (NASDAQ:HPCO) stock traded at $34 per share right after its initial public offering (IPO) on Aug. 31. They quickly sold off to $5, then rose to near $8 per share in premarket trading Sept. 1.

Hempacco is a spinoff of Green Globe International (OTCMKTS:GGII). GGII held 79% of Hempacco’s common stock after the IPO. Only a 4.3% interest in the company was sold in the public offering.

In a U.S. Securities and Exchange Commission (SEC) filing, Hempacco said it had $1.8 million in revenue for the quarter ending June 30. The company estimated its 2021 revenue at $1.2 million.

The stock was highly volatile in premarket trading Sept. 1, with a market capitalization of anywhere from $175 million to $200 million.

What Is Hempacco?

Green Global and Hempacco say they are “disrupting tobacco” by making hemp cigarettes built around CBD. Unlike THC, CBD is legal in most states, usually sold in the form of oil meant to relieve pain. The company claims to have intellectual property that can solidify its first-mover advantage in the CBD and hemp cigarette markets. The company has a 53,000-square-foot facility in San Diego.

The product was launched in 2020, and the company now claims 200 retail locations and 600 vending machines, often using the brand name The Real Stuff Smokables. The IPO was downsized from 3 million shares to 1 million in July with a target price of $6 per share.

About $17 million was raised in the IPO, which was managed by Boustead Securities of Irvine. Boustead also participated in the August IPO for AMTD International (NASDAQ:HKD).

Traders at Stocktwits seemed interested in selling HPCO below $8 with the shares at $7.61 around 9:00 a.m. Eastern on Sept. 1.

What Happens Next?

The future of Hempacco will be based on its ability to gain distribution beyond San Diego and convince people to smoke CBD. The company claims its technology can handle various formulations of its product, with different concentrations of active ingredients and flavors.

On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

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