As the United States continues to grapple with cannabis legalization on the federal level, a number of companies in Canada are positioning themselves to succeed on a global scale. But few have managed to spread their roots like the Ontario-based Canopy Growth Corporation. Already known for its high quality ganja brand Tweed, the company has been eyeing a market that stretches far beyond the Great White North.
Earlier this week, Canopy Growth announced that it had acquired a license in New York state to produce and process hemp. With the assistance of Gov. Andrew Cuomo and Sen. Chuck Schumer (NY-D), the Canadian cannabis entity is planning to build a large-scale operation for hemp extraction and product manufacturing within the United States.
The license was granted just weeks after Gov. Cuomo presented his plan to legalize recreational cannabis across New York in 2019; and a month after hemp production was federally legalized in the United States via the 2018 Farm Bill– a measure that Sen. Schumer was instrumental in getting to pass.
Canopy Growth Attempts to Corner U.S. Hemp Market
Originally founded in 2013, Canopy Growth has been fortunate enough to have a few years to build a solid foundation while tethering itself to the bustling Canadian market. Other companies from the tippy-top of North America, such as Aurora Cannabis and Tilray, have also been gaining a foothold in prospective markets outside of their country.
With Canopy Growth’s foray into the United States’ newly reinvigorated hemp market, the company is planning to invest somewhere between $100 million and $150 million into its New York-based operations.
The company is looking at a number of different sites located throughout the Southern Tier of New York. Pending board approval of the prospective production site, the facility is situated to become one of the first extraction and processing centers outside of Canada, and will be capable of producing “tons of hemp” on an annual basis.
“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,” said Sen. Schumer said in a press release.
According to Canopy Growth, the New York operation will use hemp that’s sourced exclusively from American farmers. The company also hopes to utilize their market presence and industry experience to bring hemp-based cannabinoid products to the forefront of the U.S. market.
The news also helped the company’s immediate value on the stock market, as shares (NYSE: CGC) jumped a whopping 11 percent after the announcement was made.
Will Canadian Companies Rule the Cannabis Realm?
While the New York hemp production center will be a focal point for Canopy Growth, the company has also been pollinating both Europe and the Middle East with its sticky green fingers.
For instance, Canopy Growth has a German subsidiary, called Spektrum Cannabis GmbH, that’s supplying high-quality medical cannabis to patients in Germany, Czech Republic, and nearly a dozen other countries. In the first quarter of 2018, the European offshoot accounted for 14 percent of Canopy’s total sales.
Even more telling is the $4 billion investment that Constellation Brands (the alcoholic beverage giant) made to Canopy Growth last year. The massive influx of funding is intended to improve Canopy’s ability to build or acquire assets in nearly 30 countries that are developing a medical cannabis program, and will also be used to bolster its place in the edibles market.
As the United States and other countries slowly work towards developing a sound medical and recreational cannabis system, Canadian companies like Canopy Growth and Aurora Cannabis have already acquired the financial backing, know-how, and high-quality product to essentially open up shop instantly anywhere in the world
How this will impact local businesses looking to enter the market remains to be seen, but one thing you might notice in the near future is a maple leaf on the packaging of your legal pot products.
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