CanaFarma Corp., one of at least a half dozen New York companies that launched recently in the CBD field, is in the midst of going public on the Canadian Securities Exchange. It is projecting $45 million in revenue by the end of this year.
CBD, which is short for the non-intoxicating compound cannabidiol, is made from hemp, which is essentially the same plant that produces marijuana. In 2018, the U.S. Farm Bill legalized the cultivation and sale of hemp as long as it contained only trace amounts of tetrahydrocannabinol, or THC, the chemical that gets cannabis users high.
Founded last March, CanaFarma began selling its signature product, a hemp oil-infused chewing gum called Yooforic, in June. By October it was doing $750,000 a month in sales—entirely online—according to CEO David Lonsdale. He said the company was now planning its expansion into brick-and-mortar retail sales. It also produces a hemp oil tincture and is working on a skin cream.
CBD companies have gotten around the regulations by not making medical claims for their products. CanaFarma has played it safe by describing its gum as a hemp-oil infusion.
The confusion over regulations has played havoc with some New York based CBD businesses, but it has not stopped their growth.
The regulatory environment “is a little bit blurry at the moment,” Lonsdale said. “But we’re bound and determined to be one of the major companies in this industry. We have the financing and we think we’ve got the strategy.”
A veteran of Dun & Bradstreet and other blue-chip firms, Lonsdale has run his own boutique investment company for the past decade. As part of going public, CanaFarma has merged with a British Columbia-based company, KYC Technology.
Although CanaFarma appears to be the first New York based CBD company to go public in Canada, other companies in the sector have used the Canadian exchange because of more liberal laws north of the border governing cannabis-related products.
CanaFarma also has the means to produce CBD products literally from the ground up: It is a part-owner of Simple Solutions, which operates a 55-acre organic hemp farm in Duchess County. Lonsdale is looking into partnering with extraction and processing facilities in New Jersey.