As the United States enters a new agriculture era where hemp is considered a legal commodity, many companies have begun to move in to capitalize on this opportunity.
One company, Tilray Inc (NASDAQ: TLRY), announced today a letter of intent to purchase hemp-derived CBD from LiveWell Canada Inc (CSE: LVWL), whose products will be shipped across North America in the form of Tilray’s existing recreational and medical products.
The agreement outlines that LiveWell will provide TLRY with CBD isolate grown and processed from hemp in both Canada and the United States, with the first supply arrangement proceeding on February 2019. The specific CBD compound will be used to process finish cannabis products that will be distributed by Tilray in both U.S. and Canadian markets.
“Today’s announcement puts Tilray in a strong position to expand the availability of our products in existing and new potential markets,” said Tilray CEO Brendan Kennedy. “We’re pleased about the opportunity to increase our capacity to supply high-demand CBD products in Canada.”
Canadian regulations already permit hemp to be used as a source of CBD assuming certain health and quality prerequisites are met. These new regulations will let many of Tilray’s existing subsidiaries (such as High Park Farms) to begin using hemp-derived CBD to increase the supply of their existing cannabis products.
At the same time, the recently approved Farm Bill in the U.S. marks a significant shift for the American cannabis industry. With hemp legalized on a federal level and removed from the Schedule 1 of the Controlled Substances Act, many analysts estimating the U.S. market to be worth over $20 billion and many cannabis giants – TLRY included – are jumping at the opportunity to expand in this area.
At the same time, however, while hemp may be legal on a federal level, individual states will still retain a high degree of regulatory power over cultivation, with each jurisdiction having their own programs for monitoring hemp agriculture. Additionally, the bill does not legalize all CBD products, rather just those that have CBD derived from industrial hemp.
“Tilray has the expertise, team and supply in place to pursue this opportunity and looks forward to potentially expanding its product offerings to include hemp-derived CBD in the U.S,” read an official press release, according to Yahoo Finance.
In contrast to the news announcement, shares of Tilray saw a massive selloff in today’s trading session, with prices plunging 12.3 percent, down to $65.89.
Tilray is a global pioneer in the research, cultivation, production and distribution of medical cannabis and cannabinoids. Tilray was the first licensed producer of medical cannabis in the world to have its facility Good Manufacturing Practices (GMP) certified in accordance with European Medicine Agency (EMA) standards.
The company currently serves tens of thousands of patients, physicians, pharmacies, governments, hospitals, and researchers in eight countries spanning four continents through its affiliated entities in Australia and New Zealand (Tilray Australia New Zealand Pty Ltd), Canada (Tilray Canada Ltd), Germany (Tilray Deutschland GmbH), and Portugal (Tilray Portugal Unipessoal Lda). –Tilray
LiveWell Inc Company Profile
LiveWell is an innovative Canadian hemp and cannabis company focused on advanced research on CBD and other cannabinoids, as well as developing, marketing and distributing consumer health and wellness products. –LiveWell