Tilray Signs LOI To Buy American Hemp-Derived CBD
Tilray, Inc. (NASDAQ:TLRY) has announced its entry into a binding letter of intent with LiveWell Canada Inc. Under the terms of the LOI, Tilray will buy hemp-derive CBD isolate sources in Canada and the United States.
The CBD isolate that Tilray plans to buy from LiveWell Canada will be used for Tilray's wellness and medical products in Canada and the U.S. Regulations in Canada allow hemp-derived CBD if it satisfies certain quality requirements, Tilray said in a statement.
The products will be distributed by Tilray's subsidiaries Tilray Canada and High Park Farms.
Learn, connect or raise money at the leading event for connecting cannabis companies to investors.
Why It's Important
Tilray and LiveWell Canada signed the letter of intent after the Congress passed the 2018 Farm Bill, which is awaiting President Donald Trump's signature.
The Farm Bill includes a provision that legalizes hemp on a federal level and removes it from the Schedule 1 of the Controlled Substances Act. In turn, this legalizes hemp-derived CBD, which opens opportunities for CBD companies to sell their products across the U.S.
In its press release, Tilray said the Farm Bill offers it an opportunity to enter the hemp-derived CBD industry and take advantage of a market with an estimated value of $22 billion.
"Tilray has the expertise, team and supply in place to pursue this opportunity and looks forward to potentially expanding its product offerings to include hemp-derived CBD in U.S."
The first shipment of CBD isolate is expected in February, Tilray said, adding that both companies will ensure the product is in-line with quality standards.
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.