Canadian marijuana company Canopy Growth announced its plans to invest up to $150 million to establish its first production facility in the U.S.
Following the passage of the 2018 Farm Bill allowing for the commercial production of hemp, the company has been granted a license by New York State to produce and process the crop, opening the door for the company to begin plans on a Hemp Industrial Park to be located in Binghamton, in the Southern Tier region of New York.
Founded in 2013 and traded in Toronto under the ticker WEED, Canopy is the largest publicly-traded cannabis company in the world. Since the beginning, the company has built a strong IP portfolio, launched targeted R&D programs for both human and animal health, driven innovation in the legal marijuana space, and has accelerated its market leadership position. This drive has seen the company and its subsidiaries – Tweed and Spectrum Cannabis – establish a respected presence in 11 global markets.
“In New York we see an opportunity to create products that improve people’s lives,” said Bruce Linton, co-CEO and chairman of Canopy Growth. “In the process, we will create jobs in an exciting, highly profitable new industry.”
From Constellation
Canopy Growth refers this move into the U.S. as a direct strategic result of the game-changing $4 billion invested in the company in mid-August 2018 by global alcohol giant Constellation Brands.
“Our business can now make the strategic investments required to accelerate our market position globally,” said Bruce Linton, chairman and Co-CEO, Canopy Growth. “Constellation’s concentration of global cannabis activities exclusively through Canopy, coupled with the investment and its expert capabilities in brand-building, marketing, consumer insights and M&A will be a huge benefit as we look to expand our portfolio in Canada, the United States and emerging cannabis markets around the globe.”
Constellation made its first foray into the legal marijuana sector in October 2017, when the group acquired a 10 percent stake in Canopy Growth for $191 million with the goal of developing non-alcoholic, cannabis-infused beverages as part of the company’s “long term strategy to identify, meet and stay ahead of evolving consumer trends and market dynamics…” This subjectively huge deal (at the time) marked the first time an alcohol company had decided to enter the legal marijuana space.
“Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space,” Constellation Brands CEO Rob Sands said in a statement at the time.
To New York
The final amount being invested by Canopy in New York will depend on board approval of a specific site, and will range anywhere between $100 million and $150 million. The Hemp Industrial Park project will include large-scale production capabilities focused on product manufacturing, and resulting in tons of hemp extract per year.
“I fought so hard to strip the burdensome federal regulations from industrial hemp in our Industrial Hemp Farming Act of 2018, which was recently included in the Farm Bill, because I knew how much it could mean to the Southern Tier, and this investment proves it,” said Senator Charles E. Schumer. “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.”
Canopy is currently in the process of vetting possible building sites, and a choice is expected to be announced within 100 days. Once the site is established, Canopy will source its hemp from U.S. farmers and will act as the anchor business at the location. However, third party businesses can join the innovative vertically integrated hemp ecosystem from cropping, to seed, to fiber, to cannabinoids.
~ Lynda Kiernan