Canopy Growth, Aurora Cannabis, Cronos Group Leaving US CBD Market: Distressed Asset Opportunity?

Once bullish on the US hemp-derived CBD market, Canadian cannabis companies like Canopy Growth Corp. CGC, Aurora Cannabis Inc. ACB, and Cronos Group CRON are now retreating due to oversupply, regulatory ambiguity and the sluggish pace of US federal cannabis legalization.

Strategic Shifts In Response To Evolving CBD Landscape

• Canopy abandoned its New York hemp farming plans and Aurora shut down its subsidiary, Reliva.
• Cronos exited the US hemp CBD space to focus on the potential THC market.
• This shift highlights a move from vertical integration to an "asset-light model" of branding and outsourcing.

FDA Uncertainty Halts US Hemp CBD: Distressed Asset Opportunities?

The US hemp-derived CBD market has slowed down, with the FDA's lack of clear guidelines further hindering growth.

The current sale of Hemp CBD assets at a fraction of their original cost indicates notably reduced valuations, attracting a surge of interest from individuals actively seeking distressed asset opportunities in the market.

Amidst declining valuations, companies remaining in the sector might capitalize on distressed asset sales.

"Valuations are an order of magnitude lower, and there’s a lot of people that are out there right now that are shopping for distressed assets," Bethany Gomez, managing director of cannabis analytics, told Solomon Israel of MJBizDaily.

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Photo: Mohamed Hassan via Pixabay.