The Canadian cannabis giant Canopy Growth has made its first entrance into the US market with its wellness brand 'First & Free.'
Canopy Growth — the world's largest legal cannabis company, worth roughly $6.4 billion — has made its first official entrance into the US market through it's new CBD brand 'First & Free.'
The First & Free website offers a portfolio of hemp-derived CBD products ranging up to 50mg including oil drops and softgels, with creams "coming soon."
Canopy's new CBD line will be available in the 31 U.S. states where CBD products are legal for sale, and the company reports it has filled 40 provisional patents and conducted 11 therapeutic trials.
The opening of the company's new brand comes after an announcement made in early 2019, when CGC delighted investors with the news that it was going to invest between USD$100-$150 million to establish a hemp industrial park just outside of New York City.
The market liked this move and the Canopy Growth stock price really climbed. This was one of the few times that Canopy has demonstrated slow, methodical, well thought out, growth. No rash and overvalued purchases. This is because hemp is part and parcel with creating CBD products, as they are almost always hemp-derived due to the plant's lower THC content.
While it remains unclear as to whether First & Free products are made of Canopy's own hemp harvest, the company is certainly positioning itself to dominate the CBD space in the US. This is a highly lucrative endeavour, as the industry is slated to experience exponential growth in the coming years. Brightfield Group, for example, estimates that the US CBD industry will be valued at an enormous $22 Billion by 2022.
Though many may be surprised that this is Canopy's entrance into the US, given how dominant the company has been in Canada. One reason for this is that in April of 2019, CGC acquired Acreage Holdings, a US Multi-State Operator (MSO). Although, technically, they didn't actually buy Acreage Holdings, but rather paid USD$300 million for the "right" to acquire Acreage for a whopping USD$3.4 billion within a 7 year period.
While we believe that the price tag on Acreage may have been far too high, the move does represent Canopy's desire to gain a foothold in the US cannabis industry. The reason behind the slow-burning acquisition, however, according to Canopy's former CEO Bruce Linton, is to wait until the company can "efficiently and effectively enter the U.S. cannabis market once federally permissible."
This means that Canopy has put a 7-year prediction on when the US will federally legalize cannabis. Until then, Canopy will only be producing hemp-derived CBD products, as industrial hemp is legal, thanks to the passage of the Farm Bill in 2018.
Though the company's foray into the US CBD market also comes at an uncertain time for the industry, as the FDA's principal deputy commissioner, Dr. Amy Abernethy, recently stated that the agency's experts "remain concerned that some people wrongly think that the myriad of CBD products on the market, many of which are illegal, have been evaluated by the FDA and determined to be safe, or that trying CBD 'can't hurt."
While this isn't an explicit confirmation that the FDA perceives CBD to be dangerous, it's certainly not a glowing review either. On top of this, 15 companies have been notified that they have exaggerated or entirely fabricated the benefits of their CBD product, without any concrete evidence to prove it.
This may stifle upcoming CBD sales, though false advertising isn't a new phenomenon when it comes to CBD either. in July this year, New York had to go as far as banning CBD edibles in their entirety within the state due to misleading claims about the benefits of the products. The effects of the FDA's comments are yet to be seen.
To learn more about Canopy Growth, visit their company HQ here.
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