Two Pot Companies With Hemp Exposure
Hemp is quickly rocketing into the mainstream. It has the potential to disrupt industries such as cosmetics, energy, advanced materials, fibre and textiles, health and wellness, and food and protein production. It is a source of cannabidiol (CBD), a non-psychoactive cannabinoid which in its own right has become a popular trend in the food and cosmetics industries. In Canada, where cannabis was legalized federally last October, CBD products will start becoming available starting this fall.
The United States Congress legalized hemp, defined as cannabis sativa with less than 0.3% THC in its flowers, last year and since then companies have been scrambling to add hemp and CBD products to their lineups. Some of these companies looking to invest in hemp are cannabis companies. Hemp is a natural fit for companies already producing cannabis. The plants are very similar genetically, with many strains of cannabis containing both THC and CBD, and their outlaw status means both industries are burgeoning. Here are two cannabis companies who are also invested in the hemp industry to consider for your portfolio.
Canopy Growth Corp. (TSE:WEED)
Canopy Growth Corp. (formerly known as Tweed) has created a solid, capable and spirited hemp division over the last three years and is one of the leading diversified hemp and cannabis companies. Canopy was ahead of the curve when it comes to hemp, having bought Green Hemp Industries’ assets and intellectual property back in 2017. In 2018 Canopy’s hemp operations took up 4,500 acres and had an expected yield of 7000 kilograms of cannabidiol. The company has secured a hemp license in New York state and plans to expand operations there by creating a Hemp Industrial Park which would provide American farmers a destination for their hemp crops and connect them with researchers and entrepreneurs who can help turn their hemp into new products, services and industries.
Canopy plans to invest between $100-$150 million in its New York hemp operations. In March of this year Canopy announced it was acquiring AgriNextUSA, a Pennsylvania based hemp company. Hemp pioneer, CEO of AgriNextUSA and Chairman of the National Hemp Association Geoff Whaling will join Canopy as a strategic adviser. The company operates ten licensed cannabis production sites with over 4.3 million square feet of production capacity between them.
Cannabis producer Tilray recently announced it was acquiring Manitoba-based hemp-food manufacturer Manitoba Harvest for up to $316 million USD. This move allows Tilray to tap into Manitoba Harvest’s extensive distribution network in the United States and their upcoming line of CBD products. Manitoba Harvest sells hemp-based protein powder, granola, milk and other food products at over 13,000 points of sale locations across the United States (including Walmart, Costco, CVS, Kroger Co. and online at Amazon).
CEO of Manitoba Harvest Bill Chiasson has said “retailers are seeing hemp mania, it’s one of the fastest-growing products right now…all of them are looking at bringing on products that contain CBD into their portfolio and every one of them has come to us and said they see us a natural partner.” The company has two manufacturing facilities and its Canadian farmers jointly grow up to 30,000 acres of hemp. Tilray CEO Brendan Kennedy has been quoted saying he’s excited about Manitoba Harvest’s “trusted brand with a multi-national supply chain” and that he believes the supply chain to be a “valuable asset as [Tilray] looks to the future of the cannabis industry.”
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