Marijuana Producer Aurora Cannabis to Enter U.S. in a Few Months: CCO

Aurora Cannabis Inc. (ACB) is exploring ways to break into the multi-billion dollar U.S. CBD market.

In an interview with Business Insider, the Canada-based company’s chief corporate officer, Cam Battley, revealed that Aurora, one of the world's largest publicly traded cultivators of marijuana, will outline its expansion plans soon.

"We'll be unveiling our hemp-derived CBD strategy to enter the U.S. market over the next few months," he said. Battley refrained from providing further information, so investors might have to wait for Aurora’s second-quarter earnings announcement, due Feb. 11, for more specific details.

CBD, short for cannabidiol, is one of the many compounds found in cannabis plants. CBD oil has been heralded for its health benefits and is said to help cure a range of conditions, including anxiety, eczema, depression, insomnia and pain. Those advantages, together with the fact that it doesn’t get people high, has led the substance to appear in food and beverages and be talked up by analysts as a major growth market.

Vivien Azer, an analyst at investment bank Cowen, predicted that CBD could become a $1.6 billion industry in the U.S. alone over the next year. Meanwhile, cannabis industry intelligence firm, Brightfield Group, reckons the U.S. hemp-derived CBD market could be worth as much as $22 billion by 2022.

The buzz surrounding CBD makes Aurora’s expansion plans unsurprising. But one major caveat remains: federally CBD oil remains illegal in the U.S.

Marijuana has now been made legal in 33 states in some form. However, the U.S. Drug Enforcement Administration classifies CBD as a Schedule I drug. That remains the case, even after President Donald Trump legalized hemp, a source of CBD, at the end of last year.

After the Farm Bill was passed, the Food and Drug Administration issued a statement saying that CBD is still illegal to add to food or health products without its approval. That warning has clouded the legality of the popular oil and caused many Canadian cultivators of the substance to refrain from selling it south of the border.

Canopy Growth Corporation (CGC), another marijuana producer, announced on Monday that it has been granted a license by New York State to process and produce hemp. 

Other than announcing its intention to break into the huge U.S. CBD market, Aurora also revealed on Monday that it had bought yet another business.

The company announced that it will acquire all issued and outstanding shares of British Columbia-based Whistler Medical Marijuana for about $175 million. 

In a statement, Aurora’s CEO Terry Booth discussed the benefits of acquiring Whistler, one of Canada's most recognized brands and the first licensed producer in the country to obtain organic certification. 

"This transaction adds an iconic, organic certified BC-based brand with exceptional traction and a significant price premium in both the medical and retail markets," said Booth. "We intend to accelerate the completion of Whistler's Pemberton expansion project, and leverage our domestic and international distribution channels to increase market reach for their exceptional products."