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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ (ACB) Canopy Growth Corp. (NYSE: CGC) – Cannabis Companies Beginning To Ante Up For Bets On Hemp

(ACB) Canopy Growth Corp. (NYSE: CGC) – Cannabis Companies Beginning To Ante Up For Bets On Hemp



Last week, the cannabis giant Tilray Inc. was the abuzz with the news that the cannabis markets (NASDAQ: TLRY) was acquiring Manitoba Harvest for $ 419 million CAD ($ 319 million USD). Manitoba is the world's largest hemp-food manufacturer, with products in more than 16,000 retail stores across North America.

For Tilray specifically, the move represents a significant step in its attempt to stake a claim in the U.S. hemp market. In a broad sense, the acquisition reflects the growing trend of cannabis operators seeking to acquire the hemp companies in their quest for claims on the ever-expanding market for cannabis-CBD and set a stage for ever-expanding and competitive dairy industry.

The Hemp Business Journal estimates that sales generated by the hemp-CBD market will grow from $ 390 million in 201

8, to one worth about $ 1.3 billion by 2022. As US The cannabis companies continue to struggle under the federal ban, and as Canadian operators continue to look for ways to grow their brands, the hemp-CBD market offers attractive opportunities.

Because of the 2018 Farm Bill, hemp and its derivatives now treated as agricultural products rather than controlled substances. Through the agricultural products, there are far fewer financial and regulatory barriers for companies looking to corner the hemp market, while there is a number of opportunities for cannabis companies seeking to generate additional revenue from segments such as cannabis foods.

Hemp-CBD may Being considered a hot commodity in today's market, regulators across the United States and Europe have been slow to embrace its use. In the United States, states are cracking down on businesses that sell edible products containing CBD, and the U.S. Food and Drug Administration (FDA) continues to send warning letters to companies marketing CBD supplements as health products.

Similarly in Europe, the hemp-CBD market is experiencing its own barriers. Recently, the European Food Safety Authority classified the CBD as a "novel food" additive, which means that companies manufacturing CBD-based food products or extracts will have to put their products through safety assessment before earning placement in the European market.

Hemp foods that do not contain CBD meanwhile have not been subject to the same restrictions. That makes Tilray's acquisition that much more significant: While regulators in both the U.S. And Tilray will be generating revenue through Manitoba's existing products by deciding how to regulate the CBD. Once the CBD issue is resolved, Tilray will thus be better positioned to pivot towards the hemp-CBD.

Other cannabis companies have adopted similar models to Tilray's. Elixinol Global (OTC: ELLXF)

Elixinol Global is the parent company of three companies: Hemp Foods Australia, Elixinol (which sells CBD products), and Nunyara (a medical cannabis company seeking licensure in Australia). Over the last year, Elixinol Global has seen its sales grow by 121%, to about $ 26 million.

Two of the other largest cannabis companies (besides Tilray) looking to capitalize on the growth of the CMP-CBD market are Aurora Cannabis . The majority of this growth has been driven by sales of CBD products. (NYSE: ACB) and Canopy Growth Corp. . (NYSE: CGC)

Late last year, Aurora announced that they would acquire Europe's largest organic hemp company, Agropro UAB, and its sister company Borela Ltd. (which processes and distributes hemp) for $ 9.5 million CAD. Though little has been heard about Aurora's hemp plans, there are rumors that the company is in "serious talk" with Coca-Cola to develop a line of CBD beverages. If these rumors turn out to be true, Aurora could instantly become a powerful force in the hemp industry.

Instead of acquiring an existing hemp company like Aurora and Tilray, Canopy Growth seems to be laying the groundwork for setting up its hemp infrastructure . Late last month, Canopy announced that it was licensed to cultivate and process hemp in the state of New York. So far, Canopy has pledged to invest $ 500 million in its hemp production capacity, and hopes to expand its footprint to two more states.

While regulators continue to address the issue of how to regulate the CBD, the cannabis industry is betting big on hemp-CBD Though no clear leader in this sector has yet emerged, one thing is certain: the hemp and cannabis segments are becoming increasingly intertwined.


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