(This story has been updated to correctly state the purchase price of Ebbu.)
As CBD’s popularity continues to surge, companies that invest in data, research and branding as key differentiators will be better positioned for long-term success, Canopy Growth CEO Bruce Linton said at a cannabis conference in Toronto.
“Water’s free, and you can make a lot of money packaging and branding it. So, I think with CBD, if you package, brand and do the same thing, people are going to buy it because you get a result,” he said.
“I think you’re going to see a massive shakeout on the people who actually put value-added outcomes through the research, and (consumers) can actually get what you want.”
Linton was among industry leaders participating at the Cannabis Conference hosted by GMP Securities.
Canopy – Canada’s leading marijuana cultivator – has taken steps in recent months to diversify its business into hemp-based medical, adult-use and industrial products.
In November, Canopy acquired Colorado-based hemp company Ebbu for 320 million Canadian dollars ($230 million) in cash and shares. Another CA$100 million is conditional on scientific-related milestones.
Canopy also announced plans late last year to invest up to $150 million in New York state to produce and process hemp.
The U.S. passed the Farm Bill on Dec. 20, 2018, to legalize the cultivation of hemp, including production of CBD and other cannabinoids – but not THC.
Linton predicted hemp prices will be driven down in time and adding value will be essential to profitability.
“We’re driving the data, so I think you’re going to find the cost per milligram of CBD is super cheap. Everybody is going to grow it,” he said.
“There’s going to be too much hemp, and we’re going to get it cheap.”
Canopy is conducting clinical trials of CBD-based anti-anxiety treatment for pets and expects to publicly announce products in the first half of 2019.
Matt Lamers can be reached at email@example.com