Constellation-backed cannabis maker plans New York move

Canadian cannabis firm Canopy Growth, which is part owned by Constellation Brands, is readying to expand its production operations to the US with the build of a ‘hemp industrial park’ in New York.

The new “large-scale” site – one of Canopy’s first processing facilities outside of Canada – will focus on hemp extraction and product manufacturing. It will be built at a cost of between US$100 million and US$150m.

The project has been enabled by Constellation Brands’ additional US$4 billion investment in Canopy, which was completed in November. The US drinks company first acquired a minority stake in Canopy for US$191m in 2017, when it announced its intention to create cannabis-infused beverages.

Canopy’s move to New York also follows governor Andrew Cuomo’s Hemp Research Pilot Programme and the recent passage of the updated Farm Bill, which legalised commercial production of hemp.

The cannabis firm said the bill gives it a “path to market hemp-based cannabinoid products in America”.

Bruce Linton, group chairman and co-CEO, said: “Canopy Growth was founded to drive innovation within the cannabis and hemp industries. In New York we see an opportunity to create products that improve people’s lives.

“In the process, we will create jobs in an exciting, highly profitable new industry. I applaud the political leadership at the federal and state level that has allowed today’s announcement to become reality.”

Canopy will announce the specific location of its new facility – which will be capable of producing tonnes of hemp extract annually – within the next 100 days, but confirmed it is evaluating sites in the Southern Tier of the state.

Other third parties will be able to join the ‘hemp industrial park’, described as an “innovative hemp ecosystem focused on every potential application of the hemp crop, from fibre, to seed, to cannabinoids”, that is, THC, CBD and CBN.

Canopy will exclusively source hemp from American farmers for its New York operation. The group has been granted a license by the state of New York to process hemp for various uses.

The legal environment for cannabis in the US has become increasingly favourable in recent years and 10 states now permit recreational consumption, while a number of others – including New York – are taking steps towards legalisation.

Recreational cannabis consumption remains banned at a federal level, but just last week, an Oregon congressman tabled a new bill that would see the drug regulated in the same way as alcohol across the US.

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Author: Amy Hopkins {authorlink}