The Canadian cannabis producer building an industrial park for hemp processing in New York state would get a hefty property tax break under a new plan hatched by a local economic development group.
The Broome Industrial Development Agency said Canopy Growth will receive a standard 15-year payment-in-lieu-of-taxes deal that will reduce taxes on the 48-acre property by more than $1.7 million over the life of the agreement.
The proposed deal would equate to a 39% reduction in property taxes for the company over the first five years of the 15-year term of the agreement, according to the Binghamton Press & Sun Bulletin, which first reported the deal.
In July, Canopy Growth began work on the 308,000-square-foot facility, which it purchased from vacuum cleaner manufacturer Shop-Vac for $9.5 million. The company is set to invest more than $100 million in renovations.
The new industrial park, which was originally set to open this fall, was Canopy Growth’s first announced move into the hemp sector and its first official step into the United States.
Canopy plans to extract and process hemp into CBD oils, topicals and consumables.
According to the application for the tax break, Canopy Growth said its initial ramp-up could take longer because of substantial renovation on the former vacuum cleaner factory. But Canopy said it expects to employ up to 75 people within three years.
In June, Canopy Growth said it will open hemp processing facilities in seven U.S. states in the next year.
The company is currently involved in at least two lawsuits with U.S. farms it contracted to grow hemp, in California and four other states, including New York.
Canopy trades on the New York Stock Exchange as CGC and the Toronto Stock Exchange as WEED.
Company officials told investors Thursday in a quarterly earnings call that its U.S. hemp expansion plans remain on track.
Details about the tax break deal are available here.
