Hemp had been outlawed for decades until Congress passed the 2018 Farm Bill. The legislation made an important distinction between hemp and marijuana, defining hemp as cannabis with less than 0.3% THC, the main psychoactive chemical in marijuana. States and tribes interested in growing hemp were required to create and submit their hemp programs to the U.S. Department of Agriculture (USDA) for approval.
Within a year, the market for hemp was booming, mainly driven by the demand for hemp-derived cannabidiol. However, it’s become quite clear that the hemp supply chain is riddled with issues. According to George Weiblen, a professor at the University of Minnesota who has been studying cannabis from 2002, there are huge challenges to producing industrial hemp to meet the demand.
“It’s not as simple as growing tomatoes. It’s just not. The possibility of failure to produce quality cannabis extracts is huge,” he says.
However, things may change moving forward after three titans of the North American hemp industry decided to join forces and build out the U.S. hemp supply chain.
They comprise of Geoff Whaling, the Pennsylvania-based Chairman of the National Hemp Association credited with launching the first Hemp Industrial Park in the Southern Tier of New York State; Bruce Linton, the founder and former CEO of Canopy Growth, the largest cannabis company in the world and Tim Saunders former Vice President and Chief Financial Officer at Canopy Growth.
The three announced the formation of new hemp company Collective Growth Corp. The company received preliminary approval from the Securities and Exchange Commission to raise $150 million through an IPO on the NASDAQ market starting on March 17.
Linton will be the co-founder, CEO, and Chairman of the board, Whaling will be co-founder and President while Saunders will be Collective Growth’s Chief Financial Officer (CFO).
If the IPO is successful, says Linton, Collective Growth Corp will likely use the money on US-based decortication (fiber extraction) and processing facilities. “We are going to develop a supply chain that uses the entirety of the plant for high value.”
In January, the National Hemp Association partnered with New Holland Agriculture, a farm machinery giant, to help provide processing infrastructure to farmers. “We’re telling them that if they grow it, we’ll come to process it,” says National Hemp Association chairman Whaling.
“It is an absolutely essential next step if we’re going to rekindle the hemp industry to reach the potential of being a great competitive commodity group. Unless we get the infrastructure in place and do it on a commercial scale within the next 12 to 16 months, I’m afraid interest by farmers and end-users will start to wane.”
Experts strongly assert that the intentions of Collective Growth Corp tie in well with the interest of all stakeholders, such as Champignon Brands Inc. (CSE: SHRM), since the sustainability of the hemp industry benefits everyone.
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