Canopy Growth Corp CGC's foray into the U.S. hemp industry is speeding up with another acquisition. One of the largest cannabis companies in the world said Thursday that acquired hemp company AgriNextUSA.
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The terms of the transaction and its value were not disclosed, though Canopy said the cash purchase was not material to its current cash position.
Following the acquisition, Geoff Whaling — AgriNextUSA CEO and chairman of the National Hemp Association — will be appointed to Canopy Growth's U.S. division as strategic adviser for hemp and CBD. Whaling has been working closely with Canopy since 2013.
Why It's Important
Following the legalization of hemp in the 2018 Farm Bill, the plant is expected to become a multibillion-dollar industry in the U.S. and potentially top cannabis given the much wider range of applications in industries such as advanced materials, food, cosmetics, health and wellness.
Canopy's was an early entrant into the hemp market.
Canopy said it expects the acquisition of AgriNextUSA to put it on track for a fast expansion in the U.S. Recently, the company said it would build the first hemp industrial park in the New York state after receiving a license to produce and process hemp.
Canopy plans to invest between $100 million and $150 million in the operation, although co-CEO and Chairman Bruce Linton said in an interview that the amount could be expanded to up to $500 million.
AgriNextUSA's vision is to build hemp industrial parks similar to the one Canopy announced in New York. The parks will work with farmers, giving them access to a single regional destination for their hemp crops and connecting them with researchers and entrepreneurs that can turn hemp into new and innovative products.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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