In this market news, Canopy Growth Corporation (TSX:WEED), one of the Canadian marijuana stocks, said it has been awarded a New York State hemp license
SmallCapPower | January 17, 2019: Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), one of the Canadian cannabis stocks, Monday announced that it has been awarded a license by New York State to process and produce hemp. Following the support of key state and federal government officials in New York, Canopy Growth will invest between US$100 million and US$150 million to establish the Hemp Industrial Park. New York operations will produce tons of hemp extract annually. Following the closure of a US$4 billion investment by Constellation Brands (the New York-based beverage alcohol giant), the Hemp Industrial Estate project displays another example of the strategic advantage Canopy Growth has garnered. Canopy Growth will establish within the Hemp Industrial Park large-scale production capabilities focused on hemp extraction and product manufacturing within the United States.
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Canopy Growth Corporation Chairman and Co-CEO Bruce Linton said, “Canopy Growth was founded to drive innovation within the cannabis and hemp industries. In New York we see an opportunity to create products that improve people’s lives. In the process, we will create jobs in an exciting, highly profitable new industry. I applaud the political leadership at the federal and state level that has allowed today’s announcement to become reality.”
Canopy Growth is evaluating a number of sites in the Southern Tier of New York, which will become one of its first extraction and processing facilities outside Canada. The Company intends to announce the specific location within 100 days. Canopy Growth will be the anchor business in the broader Hemp Industrial Park, where third parties can join an innovative hemp ecosystem focused on every potential application of the hemp crop, from fiber, to seed, to cannabinoids. The Company plans to source hemp exclusively from American farmers for its American operations and believes the Farm Bill has the power to create a thriving new industry. The move should bring significant employment to the region as well as long-term economic benefits to its communities.
Post the announcement, shares of Canopy Growth Corp climbed more than 11% to close at a market capitalization of C$19.3 billion with a price-to-book multiple of 8.0x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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