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What Legalizing Hemp Could Offer US Markets

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Dec. 27 2018, Updated 3:30 p.m. ET

The novelty of hemp

Whereas marijuana’s THC (tetrahydrocannabinol) and CBD (cannabidiol), its primary instigators of psychoactive effects, make US regulators nervous, hemp’s THC and CBD have low potency and don’t offer the same effects.

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Challenges for cannabis companies

Despite the low potency of those chemicals in hemp, companies (HMMJ) such as Canopy Growth (WEED), Aurora Cannabis (ACB), Aphria (APHA), and Cronos Group (CRON) are working to develop derivative products that mirror mainstream cannabis products. The biggest challenge they face may be developing hemp-derivative products with proven uses. Therefore, while farming and commercializing hemp will initially see strong momentum, there will also be interest in researching and developing hemp products with psychoactive chemicals.

Canopy Growth plans to do this R&D (research and development) with its recent acquisition, ebbu, which focuses on THC- and CBD-based product R&D. As indicated on its website, the company boasts over 1,500 cannabis-related inventions and 40 patents, making ebbu an attractive buy for Canopy. Canopy Growth stock continued to weaken this month, as shown in the chart above. Read on to know what Canopy had to say about ebbu.

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