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Canadian sappa industry leaders invest in US cannabis

22/01/2019 | hempmarket
heading_title

The Farm Bill provides opportunities for the development of the CBD market for products derived from hemp raw materials grown in the U.S., which is estimated to earn companies specializing in this activity for at least $ 6.1 billion in the next few years. It can be stated that cannabis is slowly but surely entering the US national regulated market, and if Canadian cannabis companies are actively involved in this process, they create strategic backlogs for long-term operation in the market of the most profitable crop. 

Canadian companies specializing in the legal production of medical cannabis invest significant resources in various businesses related to the U.S. cannabis industry.

• Canopy Growth, a therapeutic cannabis manufacturer based in Ontario, Canada (raised $3.8 billion from New York's Constellation Brands) has announced that it intends to invest heavily in the US cannabis market. Canopy management informed that the company already has a license to grow cannabis in New York State and that the Canadian firm will spend about $200 million to build a cannabis processing plant in Binghamton, New York State. In addition, Canopy invested $9 million in the Canadian company Greenhouse Juice Co., which is to develop a line of drinks with cannabidiol in order to further participate in the sales of these products in both Canada and the United States.

• Tilray, another British Columbia therapeutic cannabis manufacturer, has announced plans to purchase cannabidiol isolate (CBD) from Canadian hemp company LiveWell Canada to accelerate the distribution of CBD products across the North American continent.

• British Columbia Village Farms International, a greenhouse-growing tomato, pepper and cucumber company, has announced plans to enter the U.S. hemp market and list its shares on the Nasdaq stock exchange (the U.S. high-tech stock exchange).

• Another British Columbia company, True Leaf Pet, which specializes in hemp-based animal treats using CBD, has hired former head of the U.S. pet retailer Petco to lobby for the promotion of cat and dog food in the U.S.

American hemp producers' reaction to Canadian market activity

It should be noted that representatives of American companies specializing in the cultivation and processing of both low-drug and therapeutic cannabis closely follow the movements in the U.S. cannabis market by Canadian companies. In particular, according to Rick Weissman, President of High Falls Extracts and High Falls Agriculture, which grows and processes cannabis in New York State. It's only a matter of time before the market hears about other companies from Canada or other economically developed countries that will invest significant financial resources in the development of the U.S. hemp industry.

In 2018, Mr. Weisman grew only 1.6 hectares of hemp, and the Canopy plans to grow several million dollars. That's why the American hemp grower is worried about developing its hemp business, which is close to the Canadian hemp giant. In order to stay in the emerging U.S. hemp market, companies such as smallholder farmers, Mr. Weisman, need to be as creative as possible and adapt quickly to the rapidly changing realities of the market. In addition to small American companies, they will need to find their own specialty, so that they will remain competitive.

According to Rick Weisman, on the one hand, major Canadian players entering the US cannabis market will reduce prices for cannabis, but they will have to create a processing infrastructure that will limit the limits of price reduction. On the other hand, CBD is growing so rapidly that even the entry of large Canadian cannabis companies into the market cannot significantly reduce the price of non-drug cannabinoids. Among other things, as supply increases, the U.S. has seen a rapid increase in demand for cannabis products.

Association Commentary on Ukrainian Technical Hemp

After amendments to U.S. legislation to allow legal cultivation of industrial industrial cannabis crops at the federal level, Canadian cannabis companies received a legal mechanism to strengthen their position in the world's richest market. This regulation, already signed by the President of the United States, provides opportunities for Canadian cannabis companies to legally grow, process, and locate potential consumers of cannabis products in the United States. Adoption of the amendments to the Farm Bill provides opportunities for the development of the CBD market for products derived from cannabis raw materials grown in the U.S., which is estimated to earn companies specializing in this type of activity for at least $ 6.1 billion in the next few years. It can be stated that cannabis is slowly but surely entering the US national regulated market, and if Canadian cannabis companies are actively involved in this process, they create strategic reserves for long-term operation in the market of the most profitable crop.