Hemp legalization in the United States is something that is poised to revolutionize the cannabis industry. With a new potential source of CBD outside of cannabis itself, many large producers are competing to acquire licenses to grow the crop in various states. Canopy Growth Corporation (TSX: WEED)(NYSE: CGC) is planning to invest up to $500 million in hemp over the coming years, according to an interview with Co-CEO Bruce Linton.
The Canadian cannabis company had announced earlier that they were going to invest up to $150 million in the state of New York to grow and produce hemp after securing a license in January. However, Bruce Linton spoke in a Yahoo Finance interview where he revealed the company was going to expand into Rhode Island and a few other U.S. states.
“We’ll do it state by state right now, because what has to happen is the state needs to regulate what is permissible for CBD,” said Linton. “So we’ll probably have three or four states that have big populations and progressive leadership who want to have hemp become part of their actual job creation industrial platform.”
Canopy’s decision to build a hemp processing facility in New York marked the company’s first major push into operating outside of Canada. Hemp, a sister plant to marijuana, is known to have higher concentrations of CBD, meaning that cannabis companies have an alternative source of the compound used in medicinal creams, lotions, beverages, and edibles.
“When you think hemp, you should think about the protein, you should think about the fiber, and you should think about the CBD,” Linton added. “And so when you start covering all those categories, it doesn’t take too long until you can see, ‘Wow there is a lot of potential yield on this.’ And so putting the money in means that you’re actually creating an intent to be there for long enough to do the science and get the reward.”
Back in 2018, Canopy bought Colorado-based hemp research company ebbu for $330 million, acquiring over 40 separate cannabis-patents in the process. The company continues to pursue a strategy of acquisitions, especially in the United States, alongside many other Canadian companies looking to expand into their southern neighbor now that the 2018 Farm Act has entered effect.
“CBD is important, but it’s really associated with sort of [an aspect of] health and wellness,” he said. “THC is a really powerful part of a total solution, so if you take away THC and say [the focus] can only be CBD, I think you’re robbing the opportunity to manage other symptoms like sleep, like pain. It’s not unthinkable that this little thing called Canopy, before it has its eight or ninth birthday, could actually be two or three times more valuable than it is today.”
Canopy Growth made other announcements today, including a $30 million additional investment into Canopy Rivers Inc (TSXV: RIV). However, the markets didn’t respond much to these announcements, with share prices increasing only two percent.
Canopy Growth Corp Company Profile
Canopy Growth (TSX: WEED) (NYSE:CGC) 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 12 countries across five continents. – Canopy
