The world’s largest cannabis company by market cap, Canopy Growth Corporation (CGC), on Thursday said it was acquiring US-based hemp company AgriNextUSA, in a move to accelerate its entry into the United States.
The deal, the terms of which were not disclosed, comes at a time when the US federal government is opening up to the regulated use of hemp through the implementation of Farm Bill in December last year. Canopy Growth said the acquisition will not have any material impact on its current cash position.
The hemp industry is estimated to grow at a CAGR of 18.4% between 2018 and 2022. And according to Hemp Business Journal, hemp-derived CBD industry will be valued at around $1.3 billion by 2022, compared to just $390 million in 2018.
AgriNextUSA is headed by CEO Geoff Whaling, who is also the President of Canopy Hemp Developments LLC, a unit of Canopy Growth Corporation. He is also the Board Chairman of National Hemp Association.
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Canopy CEO Bruce Linton said, “The United States is the next stop on Canopy Growth’s desired path to becoming a leading, revenue-generating company focused on all aspects of cannabinoids and their potential. Our significant investments, acquisitions, and compilation of talented leaders such as Geoff will position us for swift expansion throughout the United States.”
CGC shares saw modest gains during the pre-market trading hours.
It may be noted that Canopy Growth has vowed to pump in $100-150 million in a hemp operation to produce high-quality CBD products. The Smiths Falls, Canada-based firm is also on track to build the first Hemp Industrial Park in New York.
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“Hemp has the potential to become a multibillion-dollar industry that will boost the American economy for generations to come,” Geoff Whaling said. “By working with Canopy Growth, we will turn our vision into a reality, one that helps American farmers, small and medium-sized business owners, and the next cohort of innovators who see the extraordinary potential that hemp has to offer.”