Three titans of the North American hemp industry announced Monday that they had joined forces to build out the U.S. hemp supply chain.
Geoff Whaling is the Pennsylvania-based chairman of the National Hemp Association who is credited with launching the first Hemp Industrial Park in the Southern Tier of New York State.
Bruce Linton is the founder and former CEO of Canopy Growth Corp. (CGC), the world’s largest cannabis company and the first marijuana firm to be listed on the New York Stock Exchange.
Tim Saunders was Canopy Growth’s executive vice president and chief financial officer.
The trio — all Canadian-born — announced the formation of Collective Growth and said the new company had received preliminary approval from the Securities and Exchange Commission to raise $150 million in an IPO on March 17 on the NASDAQ market.
The funds raised by Collective Growth will be used to build decortication (fiber extraction) and processing facilities in the United States.
Both Whaling and Linton played a significant role in getting industrial hemp legalized in the U.S. in 2018.
Though farmers embraced hemp enthusiastically after it was legalized, many found that there was no market for their crops because there were very few places to have it processed into a marketable good.
Whaling’s nonprofit National Hemp Association partnered in January with New Holland Agriculture, the farm machinery giant, to assure farmers that there will be a market for their industrial products and the infrastructure to support it.
“We’re telling them that if they grow it, we will come” to process it, Whaling said. “It is an absolutely essential next step if we’re going to rekindle the hemp industry to reach the potential of being a great competitive commodity crop.”
Whaling said there’s no time to waste.
“Unless we get the infrastructure in place, and do it on a commercial scale within the next 12 to 16 months, I’m afraid interest by farmers and end users will start to wane,” Whaling said.
Linton said he was fired in June 2019 from Canopy after the beer and liquor giant Constellation Brands spent $4 billion for a 38 percent stake in the company. When the Canopy stock slumped on weaker-than-expected Canadian sales, the new board ejected Linton.
Whaling, who served as a strategic adviser to Canopy Growth, has had a long relationship with Linton that dates to the company’s founding in 2013.
According to analyst Zephus Ltd., Collective Growth was formed as a special purpose acquisition company (SPAC). The cash shell intends to sell 15 million units, of which 262,500 are earmarked for financial services company Cantor Fitzgerald.