Canopy Growth: Officially Licensed to Grow Hemp in New York State
The tides are changing for the hemp industry in the United States, particularly in the State of New York. Senator Charles E. Schumer (NY-D) was instrumental in pushing forward legislation within the 2018 Farm Bill, which made the farming of industrial hemp legal. After State approval for a hemp license in January of 2019, the leafy chickens have come to roost in the Southern Tier of New York. Canopy Growth Company (Canopy) is making sizable investments in New York'
s hemp industry. As a company, Canopy focuses on various aspects of the marijuana and hemp industry. In New York, Canopy will venture into hemp industry growth through investments in production and research of extraction and product manufacturing capabilities within the State. Thus far, they have been exceedingly successful in their goal. Canopy Growth has numerous subsidiaries operating in Canada. In November of 2018, they also received a $4 billion investment from Constellation Brands, a Fortune 500 company that also produces Corona and Modelo. The massive capital Canopy has accrued them substantial economic clout, especially in a burgeoning space. In October of 2018, Canopy acquired Ebbu, a Colorado-based hemp innovator, for $25 million in cash and 6.2 million in Canopy shares valuing the latter at around $450 million. The markets have also been reacting positively to Canopy’s recent developments. On the date of the license approval, the company stock jumped 11% in the market. Further, Canopy is net positive in NYSE and TSX markets.
Investing in New York
To establish New York’s hemp industrial farming market, Canopy plans to invest US $100 to $150 million in opening a Hemp Industrial Park. The park aims to be an anchor point where third parties can join fellow innovators. Participants will work with all aspects of the plant, from seeds to fibers to cannabinoids. Onlookers view this development not only as positive for the industry but for jobs in general. After all, hemp is considered a viable alternative for farmers in the context of America’s ongoing trade war. Farmers of New York may be particularly enthusiastic, as Canopy states it will source all its hemp supplies from American farmers. What the park will bring is not yet known. We do know that research on this scale has yet to occur in the blossoming hemp industry. As participants begin to emerge in this experiment, investors and onlookers alike will surely have more to say about what happens next. Canopy will select a location for New York’s Hemp Industrial Park by April or May of this year.