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Broome’s prospective cannabis player sets the stage for major U.S. operation – Press & Sun-Bulletin

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Smiths Falls, Ontario openly embraces its “Cannabis Capitol’ label, five years after Canopy Growth, the world’s largest marijuana processor set up shop in this community. Jeff Platsky, jplatsky@gannett.com | @JeffPlatsky

The Canadian company set to establish a Broome County cannabis operation made a major acquisition on Thursday that sets the stage for it to emerge as a major player in the recreational marijuana market stateside.

But the pending acquisition of one of the United States’ largest pot cultivators and distributors has one major condition: It is predicated on the marijuana becoming legal at the federal level, and that may take years.

Canopy Growth this week acquired the rights to buy Acreage Holdings Inc., which supplies marijuana in areas where recreational pot is now legal — California, Massachusetts and Maine, among others.

“Today we announce a complex transaction with a simple objective,” said Bruce Linton, chairman and co-CEO of Canopy Growth. “Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists.” 

The deal is valued at $3.4 billion (U.S. $). Canopy is the largest recreational marijuana cultivator, processor and marketer in Canada, where pot became legal last October.

Canopy Growth announced in January that it will spend up to $150 million to establish a cannabis processing plant at a still unannounced location in Broome County. For now, the local plant, when opened, will manufacture products using industrial hemp, the non-psychoactive form of the cannabis plant. 

More: A factory made this small town ‘Canada’s Cannabis Capital.’ Could Binghamton do the same?

Industrial hemp uses are varied. Plant fibers can be used for new and lighter forms of building and insulation material and livestock bedding. Hemp-derived oils can be used in salad dressings, nutritional supplements, beauty products and animal feed. Some even speculate the product can be used in new pharmacological products to treat illnesses, but more research needs to be done.

Marketing and processing of industrial hemp became legal in the United States late last year with the passage of the newly minted farm bill.

Canopy Growth is based in Smith Falls, Ontario, about 50 miles south of Ottawa. The company says it aims to be the number one hemp company in the world, providing medical and recreational cannabis and other products worldwide.

Bloomberg reported that Canopy is likely using the $4 billion it received from a Constellation Brands investment to pull off the eye-popping acquisition.

“When the right is exercised having access to Canopy Growth’s deep resources will enable us to innovate, develop and distribute quality cannabis brands across the U.S. and continue expanding our U.S. footprint,” said Kevin Murphy, Acreage Holdings chairman, CEO and president.

Canopy Growth was up nearly 4%, $1.63, on the New York stock Exchange $44.68 at the close. Acreage Holding was up 17 cents, 1%, to $22.51.

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