Iofina has gained conditional approval for its hemp processor/ handler licence application in Kentucky.
The IofinaEX business intends to produce CBD oils and other compounds from hemp. This is a large market worth billions of dollars.
Iofina argues that its expertise in iodine extraction provides some of the skills needed for cannabinoid production. Montana, Colorado and Kentucky are the main hemp growing areas in the US.
Iofina has raised £1.5m from an open offer at 16p a share. There was a total of £7m raised in this open offer and placing. This included the conversion of debt to shares.
Iofina is set to move into profit this year and the hemp investment should not have to be high. A pre-tax profit of £1.6m is forecast for 2019, rising to £4.3m in 2020. This does not include any benefit from the hemp investment. At 16.8p, the shares are trading on less than eight times 2020 prospective earnings.
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