Please ensure Javascript is enabled for purposes of website accessibility

Kentucky Hemp Producer GenCanna Files for Bankruptcy

By David Jagielski - Updated Feb 11, 2020 at 7:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The passing of the farm bill in 2018 has resulted in many companies vying for market share in the hemp industry.

GenCanna Global USA Inc., a leading hemp producer in Kentucky, has filed for Chapter 11 bankruptcy protection as the company has run into liquidity issues. GenCanna is looking to reorganize its business in order to help refinance debt or to sell the business.

Kentucky's been a hot spot for the hemp industry, with the state giving out 1,000 licenses for the 2019 crop. But one of the challenges for the industry is that the Food and Drug Administration (FDA) still does not allow food products to contain hemp-derived cannabidiol (CBD), which prevents hemp companies from being able to tap into a lot of the industry's potential growth.

Kentucky's Agriculture Commissioner Ryan Quarles highlights just how long growers have been waiting: "We're entering year No. 7 with hemp being grown legally in Kentucky, and yet the FDA has yet to act and tell the industry which way they're going to regulate hemp-derived products."

Cannabis hemp oil in containers on a table, with hemp seeds and cannabis leaves

Image source: Getty Images.

Companies are banking on lots of growth in the industry

Research company Brightfield Group anticipates that the hemp-derived CBD market may be worth $22 billion by 2022.

One company that's already benefiting from a lot of that growth is Charlotte's Web (CWBHF 0.92%). The hemp company has generated millions in sales over the past 12 months, and its products are located in more than 9,000 locations across the country.

Canopy Growth Corp (CGC -3.21%) is another company that's looking to get in on the hemp rush, with the cannabis giant securing a license to cultivate hemp in New York State. Hemp is one way that Canadian-based Canopy Growth and its peers are able to penetrate the U.S. market, where marijuana remains illegal at the federal level.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Canopy Growth Stock Quote
Canopy Growth
CGC
$5.73 (-3.21%) $0.19
Charlotte's Web Holdings, Inc. Stock Quote
Charlotte's Web Holdings, Inc.
CWBHF
$0.50 (0.92%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
345%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.