The largest privately owned CBD company in the United States is expected to be taken over by a Canadian buyer, starting in June. South Florida-based Green Roads announced the $40 million sale of its company to British Columbia-based cannabis producer Valens this week, which could be worth up to $20 million more if the new buyer hits certain earnings targets.
“Since its inception, Green Roads has led with a ‘people first’ philosophy, producing what we view as the highest quality products while putting consumer protection and education at the forefront,” said Dale Baker, Green Roads’ president and COO. “This transaction allows us to further this mission and grow our community by reaching new markets, consumers and partners both north of the border and globally.
The $40 million deal gives Green Roads $25.4 million in Valens stock and up to $14.6 million in cash, according to a release. The two companies made a combined $94.5 million revenue in 2020.
A producer of hemp-derived CBD products, Green Roads makes a variety of oils, topicals, personal care and pet products as well as food and drink items like hemp-flower coffee and CBD gummies. The company sells its brands online and in over 7,000 retail stores across the country. Green Roads is one of a small number of American CBD companies with their own cGMP facilities, where they make their products.
Valens, which calls itself “one of the largest players in the supply chain,” launched in 2014. The company went public on the Toronto Stock Exchange in September 2017 and now has about 150 employees. But it had yet to tap into the U.S. market until this week.
Valens CEO Tyler Robson said in a statement the company studied over 100 U.S.-based CBD companies before finally deciding on making an offer to Green Roads. Robson called the two companies’ shared values and business strategies “an undeniable combination that we believe will disrupt the industry.”
“The acquisition of Green Roads represents only the first step in our U.S. expansion strategy as we expect to continue to unlock complementary, revenue-generating opportunities while we forge our presence and build our reputation in the world’s largest cannabinoid market,” he said.
On Wednesday, just one day after news of the sale went public, Valens announced it had submitted an initial application to list on the U.S.-based Nasdaq exchange. If accepted, the company would have access to tens of millions of dollars in additional capital.
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