Canadian cannabis company CannTrust Holdings Inc. said Wednesday it is establishing a U.S. operation in a joint venture with Elk Grove Farming Co. LlC, a farming company with operations in California, to secure low-cost hemp with a high CBD content. CBD, or cannabidiol, is the non-intoxicating ingredient in cannabis that is widely held to have wellness properties. The two companies will own 50% of the venture with Elk Grove providing access to more than 3,000 acres of farmland for hemp production. "The opportunity in the U.S. for CannTrust is to become a trusted supplier of consistent, standardized and high-quality hemp-derived CBD formulations at scale," the company said in a statement. The company will process, formulate and sell hemp-derived CBD product in U.S. markets that allow it and expects to start cultivation in 2020. Hemp was legalized in the 2018 Farm Bill, although CBD remains under the regulatory purview of the U.S. Food and Drug Administration, which is working to establish rules before it can be added to food or drinks. CannTrust shares rose 2.3% in premarket trade, and have gained 2.2% in 2019 through Tuesday, while the S&P 500 has gained 16%.