Canadian cannabis company Canopy Growth has been granted a license to produce and process hemp in New York. This quickly following the US farm bill, which legalized the production of hemp in the US. Canopy shares are rising on the Nasdaq and inspiring rallies in other so-called “pot stocks.”
Canopy Growth Corp now plans to spend up to $150 million to build the production facility in New York:
Thanks to the work of key state and federal government officials from the State of New York, Canopy Growth is proud to outline its commitment to invest in New York in order to establish a Hemp Industrial Park.
Canopy also thanked New York Governor Andrew M. Cuomo for his contribution to the Hemp Research Pilot Program and Senator Charles Schumer for his part in passing the US Farm Bill.
The farm bill removed industrial hemp from the list of federally controlled substances, creating a legal market for cannabidiol (CBD). It also opened the US market for Canadian cannabis companies like Canopy Growth. CBD looks set to become a common health product ingredient in North America and potentially globally.
The New York facility for Canopy will focus on hemp extraction and production. Canopy says it will “create jobs in an exciting, highly profitable new industry.”
Democratic Senator Schumer hopes to make the US “Southern Tier” the Silicon Valley of hemp production and a “true cash crop” adding:
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.
Brightfield Group predicts the value of the CBD and CBD-derived product marketplace to reach $20 billion by 2022. Investors already appear enthralled by the prospect of cannabis-related stocks in what constitutes a completely new sector.
Canopy’s share price has risen since the approval of the US farm bill, further jumping today on the news of the New York licence. At the time of writing, its share price has risen from $36.86 to $42.49, up 11.08% with no sign of slowing.
The performance is also inspiring the wider market with Aurora Cannabis up over 6% and Tilray up over 4% on the Nasdaq.
Despite the boost from, and for, pot stocks, the Nasdaq lost 0.94% for the day after news of contracting imports and exports in China decimated premarket trading.
Featured Image from Shutterstock. Price Charts from TradingView.
Last modified: May 20, 2020 12:58 PM UTC