How do you know CBD and hemp oil have gone mainstream? Perhaps when lifestyle guru Martha Stewart embraces them. Stewart has joined forces with Canopy Growth, a major Canadian cannabis company, to help with cannabis product development for people and pets. This partnership includes Sequential Brands Group, which licenses and markets Martha Stewart brands, among many others.
Initial products with which Stewart plans involvement include animal items, which she calls “sensible products for people’s beloved pets.” Currently, the 77-year-old icon is co-hosting a cooking show with cannabis advocate – and rapper, Snoop Dogg. He gained notoriety last year for smoking weed in front of the White House. Canopy also has a licensing agreement with Snoop Dogg for his medical marijuana “Leafs by Snoop.”
First Name Basis
There are celebrities whose reputation excludes the need for a last name – Madonna, Cher & Adele – and then there are those whose first names are automatic identifiers. Think Barbra, Angelina, and Meryl. According to Canopy Growth Chairman, CEO and co-founder Bruce Linton, Martha is another person instantly recognizable by her first name. The same holds true for Snoop.
There is no question, however, that this name recognition boosts Canopy Growth’s competitive advantage among consumers.
Canopy Growth and the Cannabis Market
CBD and hemp oil do not contain THC, the psychoactive ingredient that causes a high in cannabis users. CBD and hemp oil contain sport anti-inflammatory properties for pain relief and are touted as a natural alternative to opioids and prescription sleep medications. While that’s the area of the company with which Stewart is focusing, Canopy Growth is looking to enter the U.S. cannabis market per se very soon.
Since Canada legalized recreational cannabis in October 2018, Canopy Growth’s net revenue rose 282 percent over the previous year. It has partnered with U.S. company Constellation Brands, an alcoholic beverage giant, which made a $4 billion investment in Canopy Growth last August. Constellation Brands owns approximately 37 percent of the Canadian company.
Right now, Canopy Growth can’t enter the U.S. marijuana market due to stock exchange rules prohibiting listed companies from participating in enterprises that aren’t federally legal. However, a bipartisan bill introduced last year, the Strengthening the Tenth Amendment Through Entrusting States (“STATES”) Act, could change that.
The act would acknowledge cannabis legalization in those states that have made it legal, prohibiting federal interference. The New York Stock Exchange and other stock exchanges should recognize the legality of cannabis in these states and allow related company listings, or so proponents claim. There is a good possibility that Congress will vote on the STATES Act this year or in 2020. Right now, 32 states have legalized the use of medical marijuana and 11 states, plus Washington, D.C., have legalized recreational cannabis.
Investing in Hemp
To position itself for selling cannabis in the U.S., Canopy Growth is planning to invest as much as a half billion dollars in the hemp market. Entrance into the US hemp market, while potentially lucrative, is widely viewed as Canopy Growth’s plan to position itself for entry into the cannabis market per se. As Martha would say, “That’s a good thing.”