Canopy Wants Hemp Operations in 7 States Within 12 Months

(Bloomberg) -- Canopy Growth Corp. intends to open hemp processing facilities in seven states within the next 12 months but is otherwise done with the U.S. until its acquisition of Acreage Holdings Inc. can close.

To date, Canopy has only tentatively dipped a toe into the U.S. cannabis market because marijuana is federally illegal and it doesn’t want to jeopardize its listing on the New York Stock Exchange. It’s building a plant in Kirkwood, New York for extraction and processing of hemp-derived CBD, which was legalized in December, and has a complex arrangement with Acreage that will see it acquire the company if cannabis becomes federally permissible. Until then, Acreage can access Canopy’s brands and intellectual property and can issue up to 58 million shares to do acquisitions.

Chief Executive Officer Bruce Linton expects to have hemp operations that are “either built out or being built out” in seven states by this time next year, but is otherwise uninterested in doing further U.S. deals until the Acreage acquisition can close.

In fact, if small operators approach Canopy about being acquired, they’ll be redirected to Acreage, Linton said.

“If some little guy wanted to do a single deal with us we could do it, but our preference is not to do that, it’s to say, ‘You should go talk to Acreage,”’ Linton said on the sidelines of a cannabis conference in Toronto. “ We say, the reason you approached us is you want access to our currency, our IP, and guess who has it? Acreage.”’

©2019 Bloomberg L.P.

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