Legalization of Hemp Triggers Wild Volume
The volume of Creative Edge Nutrition Inc.'s (OTC Pink: FITX) exploded on Feb. 6, with 250,971,234 shares changing hands, 6.4 times its three-month average of 78,573,541 shares.
The volume was sparked in part by the passage by Congress of a farm bill that for the first time legalizes the use of Hemp for research and farming. Many observers believe this is just the latest domino to fall in a line of dominos that will eventually come crashing down as the medical and recreational use of marijuana is legalized throughout the United States
Health Canada forecasts that there will be half a million medical marijuana users in Canada in 10 years, but Creative Edge Nutrition Inc.'s (OTC Pink: FITX) CEO Bill Chaaban told Forbes Magazine Dec. 30 that with the availability and the assurance of consistency of the product it could only take two years for users to reach that magnitude.
A Potential Windfall - Operative Word 'Potential'
These forecasts point toward a potential windfall for Creative Edge and other companies like them, if the Canadian government grants the Michigan-based company the final approval to sell medical marijuana in the country.
On Jan. 9, Creative Edge inched closer to approval by complying with the Canadian government's regulations on tracking 1.3 million pounds of medical marijuana annually. The medical marijuana is to be distributed by Creative Edge’s wholly owned subsidiary CEN Biotech.
Creative Edge cleared this obstacle by using a new state-of-the-art M3Hub Seed-to-Sale tracking platform, which meets and exceeds Health Canada's tracking compliance regulations. This news comes less than two months after Creative Edge broke ground on its new 58,000-square-foot future Medical Marijuana distribution center, which will be attached to the company’s current 26,400-square-foot facility.
FITX shares closed at 7 cents up 1 cent from its closing price of 6 cents the previous day.
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In November, the company was notified by Canada's federal health department, Health Canada, that it has been issued permission to build its cannabis facility. Upon completion it will be inspected by Health Canada for a permit to begin operation.
If all goes well, it will be an historic moment for Creative Edge; however, if the approval runs into trouble, it would be a major setback for the company.
At close of the market on Feb. 4, 2014 FITX share price closed at 0.0501 cents, down 0.0015 cents from 0.054 a share the previous day.
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Astronomical Volume
Another stock with astronomical volume triggered by the Hemp provision in the just-passed farm bill is Hemp Inc. (OTC Pink: HEMP).
On Feb 6, Hemp saw 224,379,650 of its shares change hands, 5 times its three-month average of 48,570,108 shares.
Hemp's CEO Bruce Perlowin was ecstatic about the legalization of hemp.
"These are monumental steps for our industry, or shall I say 'movement'. And it's beginning to unfold fast because people are finally beginning to understand that this will finally unlock a clean 'American Industrial Revolution' that will not only be economically sound, but environmentally advantageous for everyone," Perlowin said, in a written statement. "Soon, Hemp Inc. will not have to import their hemp fabrics, hemp seeds, hemp hearts and hemp hurd for their hemp products," Perlowin added.
The Las Vegas-based company is developing a plethora of products made from industrial hemp, including fabric, paper, insulation, plastics, cooking oil and even salad dressings. And now, it is developing vaporizers.
Developing Vaporizer Products
On Jan. 28, VaporBrands International, Inc. (OTC Pink: VAPR) announced it has entered into a Letter of Intent to form a joint venture with Marijuana, Inc., a wholly owned subsidiary of Hemp.
Under terms of the proposed joint venture, Marijuana, Inc. will assist VaporBrands with the development and distribution of specialized marijuana vaporizing products to be sold primarily through existing medical marijuana dispensary networks.
In addition, VaporBrands and Marijuana, Inc. have agreed to research, develop and distribute vaporizer products specifically for the use of Hemp Oil in natural medicine. Marijuana, Inc. has also agreed to assist VaporBrands in expanding the retail distribution of its current and future electronic nicotine based cigarette products.
Inching toward Becoming a Player
This latest move by HEMP through its subsidiary certainly strengthens its position in the marketplace. It also filled a much needed gap in its vertical offerings. While it's too soon to measure how this will affect HEMP's overall revenue, no one can deny it is a positive development.
Feb. 6, HEMP closed at 22 cents, down 8 cents from yesterday's close of 30 cents.
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Settlement and Loans Push Volume
Fannie Mae (OTCBB: FNMA) shares also experienced robust stock volume on Feb 6, 2014 with 12,651,037 shares changing hands making it one of the most active stocks of the day.
The upsurge in volume could be attributed to Fannie Mae's Feb. 3 report that it and its lenders financed $28.8 billion in multifamily loans in 2013 and a Jan. 29th settlement reached with Lehman Brothers Holding Inc.
Good Numbers
Working with its lender partners to finance 507,000 units of multifamily housing, about 99 percent, or $28.5 billion of the loans that Fannie Mae financed in 2013 were delivered through MBS execution. Fannie Mae met the Federal Housing Finance Agency's goal to reduce multifamily volumes by 10 percent relative to 2012 levels, achieving 95 percent of its total volume capacity.
"The need for quality, affordable rental housing is greater today than it's ever been, and we will continue to do our part by providing liquidity, stability and affordability to the multifamily market and maintaining our credit standards," Senior Fannie Mae Senior Vice President Jeffery Hayward said, in a written statement.
This is just the latest piece of positive news about the government-sponsored enterprise, charged with stabilizing the secondary mortgage market in the last few days.
On Jan. 29, Judge James Peck approved Lehman Brothers Holdings Inc.'s settlement with Fannie Mae over $18.9 billion in mortgage claims. Under the settlement, Fannie Mae will receive a general unsecured claim of $2.15 billion against Lehman. Under Lehman's Chapter 11 payment plan, this amounts to a recovery of about 25 cents on the dollar, or about $537.5 million.
In addition, Fannie Mae and others' optimistic outlook for the 2014 housing market is fueling its spike in volume. In a Jan. 13 statement, Fannie Mae's Chief Economist Doug Duncan said that despite the rise in mortgage rates since the spring, many housing indicators posted strong gains at the end of 2013 and consumer housing attitudes are strengthening, "all of which bodes well for continued but measured housing recovery in 2014."
In addition, Fannie Mae's sister company Freddie Mac (FMCC), is planning to sell $1 billion of securities tied to the risk of homeowner defaults, almost matching the amount issued since the deals began last year. This is according to a person with knowledge of the transaction.
FNMA shares closed at $3.00 down 5 cents from its closing price of $2.95 the previous day.
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