Many companies are jumping on the opportunity to bring CBD products to the United States in light of the recently passed Hemp Farming Act of 2018. The bill, which now makes hemp a legitimate agriculture commodity, would allow companies to sell cannabis-like products derived from hemp instead of weed to the market and give them a legal option of expanding into areas otherwise deemed illegal.
Canopy Growth Corp (TSX: WEED), the worlds largest cannabis company, praised the U.S. government for this legislation and added that they would be entering the market soon.
“Canopy Growth commends the United States government for passing the Farm Bill, a transformative piece of legislation that will create jobs and meaningful economic impact across the United States,” said Co-CEO Bruce Linton. “Canopy Growth will participate in the American market now that there is a clear federally-permissible path to the market. Consistent with the spirit of the Farm Bill, Canopy Growth will participate in ways that support American farmers.”
Although the press release doesn’t go into much more detail regarding the time frame for entering the U.S. market, it did mention that more information would be shared in 2019. Overall, shares rallied 4.7 percent in the after-hours trading following the announcement.
The farm bill will spend around $878 billion over a period of five-years across agricultural, nutrition and other federal programs while at the same time loosening certain restrictions on marijuana. The bill passed through both the House and the Senate, before getting signed today into effect by President Trump.
Earlier this year, Canopy Growth made a massive $4 billion investment in Constellation Brands, and back in November announced it was acquiring Ebbu, a prominent hemp R&D company. Both these strategic decisions are now being cited as factors that will help the companies transition into the states. “Thanks to a deep hemp-specific portfolio of intellectual property acquired from Colorado-based ebbu Inc. and a landmark investment of USD $4 billion from Constellation Brands, management believes it is well-positioned to enter the US market quickly,” added Canopy Growth.
Some Canadian cannabis companies find the prospect of entering into America appealing, not just for the larger market, but in response to the frustrations regarding the Canadian governments handling of distributing marijuana to its citizens.
With significant shortages, companies have blamed provincial and federal governments, while regulators have cast the blame on the producers themselves. Regardless of which is correct, market sentiment in the Canadian cannabis sector has been bearish overall, and diversifying into a more bearish market can be quite desirable to these firms.
Canopy Growth Corp Company Profile
Canopy Growth is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time.
The Company has operations in 13 countries across five continents. The Company is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public’s understanding of cannabis, and through its wholly owned subsidiary, Canopy Health Innovations, has devoted millions of dollars toward cutting edge, commercializable research and IP development. – Canopy Growth Corp