Friends – the hemp bonanza just hit second gear. Within the past 24 hours, we learn that:
Canopy is investing over UIS$100mm in hemp extraction in New York (link)
So two of the largest Canadian Cannabis companies are now making inroads into the US, taking advantage of their head start, bringing along cheaper capital and branding firepower, and partnering with national CPG companies who have the scale to quickly bring product to market in places this industry never dreamed of (well, I did dream of a CBD knish truck). At the same time, the FDA is doing what it said it would, clarifying (limiting?) the scope of the hemp opportunity (and destroying my dream). Now that hemp is legal, and professional/institutional capital is flooding into the market, the industry will quickly start to rationalize.
I’ve speculated that hemp will be a test case for what happens when Cannabis becomes federally legal. True, the Cannabis market today is very different from the pre-legalized hemp market (speculative capital, national scope, larger brands, consumer-based, maturing(-ish) markets). Nonetheless, we can see how hemp-based CBD is quickly becoming a mainstream product (or, at least, there is a lot of money betting that it will be).
Written by: Marc Hauser