Business
Canadian cannabis companies back off from US hemp CBD market
Back in the regulated marijuana industry’s more heady days, a U.S. hemp-derived CBD subsidiary seemed like the must-have accessory for any Canadian cannabis company worth its bud.
Canopy Growth Corp. owned a hemp farm in Springfield, New York, and planned to build a $150 million industrial park in Kirkwood, New York, to produce hemp products.
Aurora Cannabis bought Reliva – a Massachusetts-based producer of hemp-derived CBD products – in a $40 million deal that included potential earnouts.
And Cronos Group spent hundreds of millions of dollars to acquire the Lord Jones hemp CBD brand.
The purchases came after the passage of the 2018 U.S. Farm Bill that legalized low-THC hemp, including hemp-derived CBD.
That legislation generated optimism about a new, multibillion-dollar market for hemp-derived products.
Now, after investor exuberance about the cannabis sector has largely worn off, several Canadian marijuana companies have retreated in one way or another from the hemp-derived CBD market south of the 49th parallel:
- Canopy announced in 2020 that it would stop farming hemp in New York in the face of “an abundance of hemp,” although it continued producing and selling hemp-derived CBD products. The Kirkwood project was abandoned, local media reported.
- Cronos announced in June it was exiting the U.S. hemp CBD market and relaunching Lord Jones in Canada.
- This month, Aurora said it was closing Reliva.
- Green Roads, a Florida CBD manufacturer acquired by Canadian cannabis manufacturer The Valens Co. – which was subsequently acquired by Canadian producer SNDL — filed for bankruptcy earlier this year and was acquired by Global Widget, parent company of Hemp Bombs.
The Canadian pullback from hemp CBD in the U.S. partly reflects the diminished fortunes of once-high-flying Canadian cannabis licensed producers.
It also reflects a general lull in the American hemp-derived CBD market, given the U.S. government’s continuing struggle over how to regulate products containing CBD.
“It’s a very, very difficult market in the U.S. right now,” said Bethany Gomez, managing director of Chicago-based cannabis analytics firm Brightfield Group.
Brightfield Group data shows the U.S. CBD market peaked in 2021 at roughly $4.7 billion in sales before contracting to $4.4 billion in 2022, with another decline expected in 2023.
Canadian ambitions
When big Canadian cannabis companies originally invested in U.S. hemp-derived CBD assets, they were well-capitalized and eager to expand their operations around the world.
“And around 2020, it was starting to become clear that there’s only so much that these cannabis companies can grow within the country of Canada – Canada’s only so big, and there’s only so much cannabis that can be consumed there,” Gomez explained.
Canadian licensed producers (LPs) invested heavily in international markets, but Gomez said the U.S. was “the golden prize.”
As publicly traded companies in the U.S., those LPs couldn’t deal with a substance that’s federally illegal.
The American hemp-derived CBD market seemed like a way “to get a foothold there without violating federal law,” Gomez said.
“They could play in the CBD space and then eventually take that presence in CBD into the (high-THC) cannabis space. ”
For Canadian firms, operating in the U.S. CBD space was meant to be “an opportunity to plant the seed of a brand early on (and) get that into the mainstream,” said Beau Whitney, chief economist of Portland, Oregon-based hemp and marijuana data and analysis firm Whitney Economics.
“And then, as the adult-use market opens up, you’ve already got a brand established – and then you just convert over to your adult-use product line.”
American hemp CBD headwinds
So far, the plan to leverage U.S. hemp CBD assets to get a leg up on adult-use cannabis in the event of federal legalization hasn’t played out as expected.
“Fast forward to 2023 – there’s no movement at all on federal legalization for cannabis,” Brightfield’s Gomez said.
“There’s very little optimism in federal legalization toward cannabis, there’s no movement from the (U.S. Food and Drug Administration) on (regulation) of CBD, and that market has really hit a standstill.
“And there’s not a lot of promise, in the near term, of cannabis taking off, or having a type of triggering event that would allow them to really tap the U.S. cannabis market.”
In the meantime, the cannabis industry faces an ongoing “capital crunch,” Gomez added – and investors aren’t willing to wait for businesses to become profitable given the uncertainty of federal legalization.
“There’s this pressure to get rid of anything that is not profitable. … Cash is king, and people are starting to run low on cash in many areas.”
Cronos, for example, said it was exiting its American hemp CBD operations “to improve its cash flow in the near term and position itself to directly enter the U.S. THC market” when regulations permit.
Cannabis economist Whitney said Canadian LPs are “pulling back (and) focusing in on their core business” as well as cutting fixed costs in both the U.S. and Canada.
Whitney noted another challenge for companies operating in U.S. hemp CBD: State-level uncertainty amid a lack of federal regulatory guidance.
“And so this is also a risk-mitigation play,” he said, citing shifting state regulations regarding hemp-derived cannabinoids.
Despite the pullback, Canadian cannabis companies haven’t entirely abandoned the U.S. hemp market.
Canopy Growth still sells Martha Stewart and This Works CBD products in the U.S.
Tilray Brands’ Canada-based wellness brand, Manitoba Harvest, operates in the U.S., although Brightfield’s Gomez noted the Tilray subsidiary is more focused on hemp foods than CBD products.
Village Farms International, the parent company of Canadian LP Pure Sunfarms, also owns hemp CBD company Balanced Health Botanicals, although Village Farms isn’t strictly Canadian.
Evolving business practices
The continuing Canadian pullback from U.S. hemp CBD comes as overall hemp production has declined, with U.S. Department of Agriculture data showing a nearly 50% decline in planted hemp acreage between 2021 and 2022.
For hemp CBD, “the amount of licensed acres in the United States right now is less than what it was before the 2018 Farm Bill,” economist Whitney said.
“And so, the number of cultivators have been dramatically reduced for cultivation of hemp with the intention of cannabinoid use, or cannabinoid productization.”
Meanwhile, Whitney sees an evolution in the way some companies approach the cannabis market, citing as an example Canopy’s move toward an “asset-light model” with third-party sourcing.
Whitney expects companies will “develop that very same model for hemp and hemp-derived products.”
By way of analogy, Whitney offered ketchup.
Canadian LPs and U.S. multistate marijuana operators alike have “tried to be experts in the equivalent of growing tomatoes, of processing tomatoes, of making ketchup and distributing that ketchup,” he said.
But ketchup kings such as Heinz or Hunt’s “don’t do that with their ketchup,” he continued: They contract out to tomato growers and processors, then brand and sell the ketchup themselves.
“I think that’s the very same model that we’re starting to see evolve for cannabis, for the LPs out of Canada, and for some of the MSO brands in the United States,” he said.
“Now it’s starting to come into a branding play and an outsourcing play, (a) contract-manufacturing play, much more so than a vertical-integration play – even though, with the Trump tax cuts a few years ago, it was favorable to develop a vertically integrated model.”
The retreat of some companies from the American hemp CBD sector might benefit those who remain, suggested Brightfield’s Gomez.
Hemp CBD assets are “being sold at a fraction of the cost that these companies paid for them,” she said, “which indicates that 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.”
Source: https://mjbizdaily.com/canadian-cannabis-companies-back-off-from-us-hemp-cbd-market/
Business
Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light
Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).
The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.
India’s Indigenous LEO Satellite Vision
Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.
The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.
According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.
The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.
Regulatory Process Moves Forward
Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.
The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.
Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.
Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.
Broadband, Mobile Connectivity, and Strategic Applications
Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.
The company also intends to establish 20 to 22 ground stations across India to support network operations.
Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.
Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.
Major Step for India’s Space and Telecom Sectors
Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.
The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.
Business
Alleged Crores Pharma Scam Mastermind Arrested from Surat
After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.
Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.
Fake Business Deals and Dishonoured Cheques Used in Fraud
Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.
In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”
Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.
Multiple Identities and Repeated Fraud Pattern
Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.
Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.
Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.
Multi-State Surveillance Leads to Arrest in Surat
A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.
Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.
Growing Threat of Corporate Identity Fraud
The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.
Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.
Experts Urge Stronger Due Diligence in High-Value Transactions
Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.
Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
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