Canopy Growth Corporation (NYSE: CGC)(TSX: WEED) received a license by the state of New York to grow and process hemp. The permit would the company establish large-scale production facilities that would focus on hemp extraction and product manufacturing within the U.S. Both state and federal regulators, including Sen. Chuck Schumer and Gov. Andrew Cuomo, played a role in what has now become a major deal for the area.
The company plans to invest between $100 million and $150 million on future New York facilities, which would be Canopy’s first extraction and processing plants outside Canada. Although they are still evaluating a number of potential sites in the Southern Tier of the state, the company expects to have a decision made within the next 100 days.
“Canopy Growth will establish within the Hemp Industrial Park large-scale production capabilities focused on hemp extraction and product manufacturing within the United States,” said Co-CEO Bruce Linton. “Canopy Growth was founded to drive innovation within the cannabis and hemp industries. In New York we see an opportunity to create products that improve people’s lives. In the process, we will create jobs in an exciting, highly profitable new industry. I applaud the political leadership at the federal and state level that has allowed today’s announcement to become reality.”
Canopy will source hemp exclusively from American farmers for these new facilities once they are built. It would also bring Canopy closer to Constellation Brands, a major brewing company that made a $4 billion investment in Canopy earlier last year and still retains a 37 percent stake in the company.
“Canopy Growth’s $100-$150 million investment in the Southern Tier is a true win-win for Canopy Growth, who will be positioned at the forefront of Upstate New York’s industrial hemp revolution, and for the Southern Tier’s economy and farmers, which will receive a major shot in the arm in new good-paying jobs,” added Senator Chuck Schumer. “I’m so pleased that Canopy Growth is joining my efforts to make the Southern Tier the Silicon Valley of industrial hemp production and research and will keep pushing to see industrial hemp become a true cash crop in the region.”
Back in 2018, the U.S. government passed the 2018 Farm Bill which designated hemp as an agricultural product, as opposed to an illegal commodity. As such, it has become a federally legal source of cannabidiol (CBD) for CBD-infused products and the hemp market quickly became a major area of interest for cannabis companies across the continent.
In response to the news, Canopy Growth shares surged 11 percent today. Ending today’s trading session at a share price of $56.45, today marks the highest the stock has been in over two months.
Canopy Growth 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. Canopy Growth offers the world’s only medically approved vaporizers through the Company’s subsidiary, Storz & Bickel GMbH & Co. KG.
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 15 countries across five continents. – Canopy Growth Corp
