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Canopy Growth To Enter U.S. Hemp Market

Canopy Growth Corp. (CGC, WEED.TO) is preparing to enter the U.S. hemp market following the passage of the U.S. 2018 Farm Bill, which legalizes hemp production in the U.S.

Canopy Growth said Wednesday that it started to add strategic hemp assets to its portfolio in 2016, focused on consumer-packaged goods. After realizing the market potential for hemp and future CBD products, the company began investing in field-scale operations in late 2017 in order to vertically integrate its hemp business to mirror its existing cannabis business.

"Canopy has been preparing for and investing in this opportunity for several years now, through strategic acquisitions, infrastructure expansion, and extensive internal research and development. With the door now open, we are moving fast to bring our considerable resources to establish the same market leadership position internationally that we have earned in the Canadian cannabis market," said Bruce Linton, Chairman & Co-CEO of Canopy Growth.

Canopy Growth said its hemp team worked throughout the year to develop proprietary and patent-pending technological solutions to optimize the speed and efficiency of harvest, post-harvest, and storage processes required to run field-scale hemp operations.

Canopy Growth's hemp division has harvested over 190 million sq. ft., or 4500 acres, of genetically engineered CBD-rich hemp in Saskatchewan. Once extracted, the company expects a yield of about 7,000 kilograms of hemp-derived CBD, repeatable annually.

The company noted that while there is currently no path to the U.S. market for CBD derived from Canadian-grown hemp, extracted product can be stored as inventory over the long term as regulatory paths are defined.

Canopy Growth acquired a portfolio of hemp-specific IP when it acquired Colorado-based ebbu Inc. in November 2018. ebbu has more than 40 cannabis-related patent applications filed representing over 1,500 inventions.

Canopy Growth said that with a substantial cash position, it is prepared to invest in the infrastructure required to bring multiple CBD products to market at scale.

Canopy Growth has developed broad product offerings specific to CBD across multiple verticals and will publicly unveil brands as well as product assortment in the first half of calendar 2019.

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