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The US Hemp Market: Not So Straightforward for Cannabis Companies

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Background

The cannabis sector (MJ) has been of top interest among investors around the world. Canada has become the first G7 country to legalize cannabis for recreational purposes, and others may follow.

As shown in the chart above, the ETFMG Alternative Harvest ETF (MJ) has continued to drift lower. With the United States open to hemp, developments may be in store for companies such as Canopy Growth (WEED), Tilray (TLRY), Cronos Group (CRON), and HEXO (HEXO).

Basically, hemp is just another raw material that can be used to make edibles, animal food, cosmetics, paper products, clothes, canvas, and more—there is nothing novel about it. So why is the United States legalizing hemp just now?

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Why the United States is legalizing hemp

As was the case for Canada’s legalization of recreational cannabis, the rationale for legalizing industrial hemp is based on its economic benefits. With investor-funded research and development that won’t trip the regulatory line, hemp could benefit the government in the form of tax, and businesses in the form of wide-margin novel products. What novel products can we get from hemp? Read on to know more.

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