Canopy Growth Corporation (TSX:WEED), one of the Canadian marijuana stocks, said recently that it has acquired AgriNextUSA
SmallCapPower | March 26, 2019: Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), one of the Canadian cannabis stocks, Thursday announced that it has acquired AgriNextUSA, a hemp company based in Pennsylvania. AgriNextUSA CEO Geoff Whaling, a hemp pioneer and a foremost advocate in the U.S. hemp sector, will join Canopy Growth USA as a strategic adviser, Hemp and CBD. Financial terms of this cash deal have not yet been disclosed.
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Canopy Growth CEO and Chairman Bruce Linton stated, “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. By collaborating with a pioneer like Geoff, who has been involved with our team since our earliest days in 2013, we will aim to turn hemp supplied by American farmers into a wide range of products.”
Post the 2018 Farm Bill, the cultivation of hemp as a source of cannabidiol (CBD), one of the compounds found in cannabis, is legally permitted in the U.S. Earlier in January 2019, Canopy was granted a license by the state of New York to process and produce hemp. Further through this acquisition, AgriNextUSA and Canopy Growth would create Hemp Industrial Parks in New York State, providing American farmers a destination for their hemp crops and connecting them with the researchers, entrepreneurs and innovators that can turn their hemp into new products and industries.
AgriNextUSA CEO Geoff Whaling, who is also Chairman of the National Hemp Association, said, “Hemp has the potential to become a multi-billion-dollar industry that will boost the American economy for generations to come. 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.”
Canopy Growth Corp plans to invest between $100 million and $150 million at its New York hemp operations, which are expected to create significant employment and the production of high-quality CBD products.
Canopy Growth is one of the leading diversified cannabis and hemp companies, offering a variety of cannabis in different forms such as dried, oil and Softgel capsule. The Company, through its subsidiary Storz & Bickel GMbH & Co. KG, also offers medically-approved vaporizers. Year to date, Canopy Growth stock has surged ~61% to its current price of C$59.14. Canopy Growth stock trades at a market capitalization of C$21 billion with a price-to-book multiple of 2.8x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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