The approval of the U.S. farm bill could result in a $22 billion cannabis market by 2022
On September 30, the 2014 Farm Bill in the U.S. expired. A replacement bill, steered by Senate Majority Leader Mitch McConnell, was introduced that could go a long way to opening the marijuana market in the U.S. It could also tear down borders, allowing companies such as Canada’s Aurora Cannabis and Canopy Growth to enter the U.S. market and grab a piece of what is expected to be a $22-billion industry by the year 2022.
It should be pointed out that the Farm Bill will not actually legalize marijuana in the U.S. What it does, however, is to legalize hemp and changes the wording of the Controlled Substance Act to state that marijuana and hemp are two separate, individual products.
Canopy and Aurora won’t be able to start importing marijuana, obviously, but they are expected to make significant acquisitions in the market. Both are in an excellent position to set up mergers or buy-outs, or to purchase large stakes in U.S.-based hemp companies.
The Farm Bill isn’t completely ready to move forward – yet. The House and Senate both are debating cost estimates with the Congressional Budget Office and there is still some political juggling to be done. However, the U.S. is closer now than it has been before to legalize marijuana and, if not approved before the end of the year, most certainly the bill and additional legislation will be approved in 2019. Once the green light is given, we can expect a number of large companies to grab a significant share of the hemp market.