Canopy Growth was up 8.18% at $41.40 a share Monday after the company said it has received a license from New York state to process and produce hemp, a source of the popular ingredient cannabidiol, or CBD.
The Canadian marijuana producer intends to invest $100 million to $150 million in an operation site in the southern tier of New York, a part of its plan to establish a Hemp Industrial Park that can achieve large-scale production capabilities focused on hemp extraction and product manufacturing within the US. The New York site will become Canopy's first extraction and processing facility outside Canada, according to the company.
"Canopy Growth was founded to drive innovation within the cannabis and hemp industries," said Chairman Bruce Linton in a press release. "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 's investment was supported by a recent deal with Constellation Brands, the maker of Corona beer based in New York, the company said. In November, Constellation closed its deal to invest $4 billion in Canopy.
Canopy's entering into the US market comes one month after President Donald Trump signed the US Farm Bill into law, legalizing hemp. The US CBD market currently generates $418 million in sales and is expected to be worth $1.6 billion by 2021, Vivien Azer, an analyst at Cowen, said in December.
Canopy Growth shares were up 32% in the past year.
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