MariMed, GenCanna Global Form Hemp Partnership
A new company is set to join the growing hemp market. MariMed Inc (OTC:MRMD) has agreed to invest $30 million in GenCanna Global as part of a strategic partnership.
MariMed develops and operates cannabis facilities and branded product lines in several U.S. states. The company said the new supply agreement and partnership with GenCanna give MariMed exposure to the hemp segment, expanding its portfolio in the cannabis industry. GenCanna is a vertically integrated agriculture-technology company that focuses on producing CBD-rich hemp.
Why It Is Important
Cannabis remains federally illegal in the U.S., and CBD is classified as a Schedule I substance.
That could potentially change with the the Agriculture Improvement Act of 2018, also known as the Farm Bill, which would remove hemp from the Controlled Substances Act, making it a commodity and legalizing CBD derived from hemp.
As of now, 19 states allow the cultivation of hemp and 23 percent of the plants are used for production of CBD, along with other uses in food, textiles and personal products.
The industrial hemp segment represents a tiny fraction of the cannabis industry in the U.S.; the passage of a Farm Bill with a provision legalizing hemp would make growing the plant easier.
Grand View Research projects that the global industrial hemp market could reach $10 billion by 2025, while the Brightfield Group estimates that the hemp CBD market could be worth $22 billion by 2022, according to MariMed.
The investment and partnership with GenCanna allows MariMed to take advantage of this expanding market not just in the U.S, but internationally, the company said.
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