Chinese firm SPI Energy Co (NASDAQ:SPI) has announced it is entering into the US cannabis market, creating huge gains for SPI stock.
SPI, which is a little known provider of photovoltaic solutions for business, residential, government, and utility customers, has decided to make the move into the burgeoning cannabis market with the launch of its newly established hemp and CBD business. The company recently entered into a management services agreement with the Native American Agricultural Company to cultivate hemp in the Navajo Nation, a Native American territory located between Arizona, Utah, and New Mexico. SPI stock is currently at $3.21 following the announcement.
SPI has also obtained licenses from the Navajo Nation to begin lab testing, cultivation, processing, and distribution of hemp-derived products. The company’s hemp cultivation in the area is currently being undertaken by a third-party on a 36-acre plot, with the first harvest expected in November. It is an interesting move by the company as USDA regulations will not apply to hemp or cannabis cultivation in the Navajo Nation until the 2020 growing season.
“As a Sovereign Tribal Nation, we are self-governed, but have modeled our Rules after the proposed criteria set out in the 2018 Farm Bill which for the first time includes Tribal Nations,” said Dineh Benally, President of the Navajo Nation San Juan River Farm Board.
Xiaofeng Peng, CEO of SPI Energy, said “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.” SPI shares are up 42% at the time of writing.
With SPI stock leading the NASDAQ today, check our pick of penny stocks that could follow suit!
Featured Image: DepositPhotos © rbspace