Market Overview

The Latest USDA Report Shows Similar State Of CBD Affairs In Canada, US

Share:
The Latest USDA Report Shows Similar State Of CBD Affairs In Canada, US
Read more about our latest Cannabis News! CANNABIS HOME

On Aug. 30, the U.S. Department of Agriculture published a report on the legal hemp market in Canada, which details some of the regulatory challenges that producers of CBD products face in both countries.

CBD, or cannabidiol, is the non-psychoactive compound of cannabis and can be derived from both marijuana and hemp. It was legalized in the U.S. via the 2018 Farm Bill.

In Canada, CBD is regulated under the Cannabis Act, which means there are only three highly stringent ways of obtaining CBD products in this country, and the sale of natural health products containing CBD is strictly forbidden.

The new USDA report states that the Canadian hemp and natural products industries “continue to advocate for a different regulatory regime for CBD-containing products.”

Over in the U.S., the confusion surrounding this compound’s legality as it’s related to the still illegal-at-the-federal-level marijuana represents a significant obstacle to companies trying to cash in on the CBD frenzy.

Click here for more information about the upcoming Benzinga Cannabis Capital Conference Oct. 22-23 in Chicago.

Though the Farm Bill declared hemp and cannabidiol extracts containing less than 0.3% THC legal, the USDA has been taking a while to develop hemp growing regulations. As a result, hemp growers have had problems importing hemp seeds from Canada and prompted the agency to confirm such imports are legal.

Even the Drug Enforcement Administration is showing signs of loosening its stance on cannabis, although the Food and Drug Administration still preserves its authority to regulate foods and other products containing cannabis or cannabis-derived compounds.

Despise all the hurdles, the already booming CBD industry is projected to surpass $20 billion by 2024 in the U.S., according to BDS Analytics and Arcview Market Research, as CBD products make the shift from dispensaries to general retail stores.

In Canada, sales of CBD exceeded expectations of cannabis producers, leading to widespread shortages across the country.

The Green Rush Getting Greener

The market for CBD-infused drinks is shaping up to become the industry’s next cash cow.

The world’s largest brewer, Anheuser-Busch InBev (NYSE: BUD), last year teamed up with Canadian pot producer Tilray Inc (NASDAQ: TLRY) last year in a $100-million joint venture to research CBD and THC-infused drinks.

Tilray recently posted a larger-than-expected loss in its earnings report for the second quarter, fueled in part by its CBD food venture in acquiring Manitoba Harvest. However, as the Canadian cannabis industry tackles supply shortages and awaits the launch of new pot-based products with the legalization of edibles in October, investors still remain bullish on Tilray.

Liquor producer Constellation Brands’ (NYSE: STZ) multibillion-dollar investment in Canopy Growth Corp. (NYSE: CGC) is set to reveal its first results as edibles kick off in Canada later this year, although more tangible effects of the legalization are expected in 2020, when most products will become available.

Aurora Cannabis (NYSE: ACB), another major player in the cannabis and CBD sector, will release its quarterly update later in September. The company’s stock had a volatile year but is still up over 12% year to date. Investors will be looking closely at its quarterly loss and revenue growth.

The Canadian cannabis giant gained a foothold in the U.S. market after it announced it completed its acquisition of Hempco Food and Fiber, producer of hemp-based foods, fiber and nutraceuticals.

Read more about our latest Cannabis News! CANNABIS HOME

Posted-In: Canada CBDCannabis Government News Regulations Legal Markets Best of Benzinga

 

Related Articles (BUD + ACB)

View Comments and Join the Discussion!

Cannabis Movers

Sign up for our secret cannabis newsletter!
Never miss out on the breaking news in the Cannabis Industry!

Target Tells Suppliers To Eat Higher Tariff-Related Costs

Najarian Brothers See Unusual Options Activity In Tapestry, Altice