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Umbral wants to Sell Grass

Bob Moriarty
Apr 16, 2014

Umbral Energy announced two weeks ago that they are mulling over entering the hot medical marijuana field. The stock rocketed higher. Then it crashed. That’s a lot like the other 527 companies that have expressed an interest in taking advantage of the changes to how Health Canada regulates medical marijuana.

As of April 1, 2014, Health Canada will no longer sell and distribute medical marijuana. Health Canada intends to license up to 20 public companies to grow and distribute marijuana for medical purposes. As of today, there are 12 approved companies. But Health Canada seems to be showing exactly why governments shouldn’t be in the grass business if an article in the Vancouver Sun is accurate.

Marijuana was made illegal in the United States in 1937 after a brisk 13-minute debate in Congress just before a middle of the night vote. And though a DEA Law Judge by the name of Francis Young concluded in 1988 that marijuana “is one of the safest therapeutically active substances known to man,” the drug remains listed as a Schedule 1 drug in the US with “no currently accepted medical use.”

Tens of millions of Americans carry criminal convictions for use or possession or sale of what a DEA judge called one of the safest therapeutically active substances known to man. States are beginning to wake up and demand some logic to local laws and there is a backdoor legalization of marijuana taking place all over the US and Canada.

As to Canada and medical hemp, without a doubt, those 20 companies that have the right to grow hemp are going to share a billion dollar or more industry. I just don’t know what the odds are of getting a license. I’m told there are 527 companies interested and only 8 more licenses to be granted.

I suspect Umbral is both right on raising hemp and dead wrong at the same time. I don’t think applying to raise medical marijuana is the right approach. With odds of 65 to 1, you could spend a lot of money establishing credibility only to be #9 of 8. But I do think the idea of raising non-medical hemp makes a world of sense.

Hemp raised for fibers to be used in paper products and for cloth is the highest and best use of the crop. What good does it do to have a license to grow medical marijuana when every 19 year-old will have a pot plant in the corner of his living room under a grow light because the police will not have the slightest reason to enforce civil laws preventing it?

Here are some of the uses for industrial hemp.

    1. Paper and cardboard products
    2. Clothing and fabrics
    3. Plastic and building materials
    4. Fuel
    5. Nutrition

Canada has some interesting times coming in the medical marijuana field but I suspect that the long term best investments will be in the use of hemp for industrial purposes. Marijuana has effectively been legalized or at least decriminalized and while stolen watermelons are always the sweetest, when everyone can grow them, you are on your own.

I own Umbral shares but they were bought when Umbral was aiming at being an energy producer. I like the people but I don’t see medical marijuana being any sort of long-term investment.

Umbral Energy Corp
UMB-V $.05 (Apr 15, 2014)
TRJTF-OTCBB 29.8 million shares
Umbral Energy website


Bob Moriarty
President: 321gold

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