Nasdaq-Listed Canadian Cultivator Enters U.S. CBD Market In $75M Deal

Canadian cultivator Village Farms International announced Monday it had acquired hemp-derived CBD company Balanced Health Botanicals in a $75 million deal. The acquisition – worth $30 million cash and an estimated $45 million stock – is a full takeover of the Denver-based CBD company and marks the publicly traded British Columbia-based cultivator’s entry into the U.S. market.

Balanced Health Botanicals, best known for its e-commerce platform CBDistillery and CBD skin-care brand Bota, does not sell marijuana products containing significant levels of THC. But Village Farms also owns Pure Sunfarms, a profitable cannabis producer in Canada.

Village Farms CEO Michael DeGiglio said the company eventually hopes to also expand into legal cannabis in the U.S.

“As a well-established, profitable leader in the U.S. retail CBD market, Balanced Health is the right opportunity, at the right time,” DeGiglio said. “Balanced Health provides a prudent means by which to invest in our cannabis strategy, offering immediate accretion to profitability, meaningful upside potential and multiple additional strategic opportunities.”

A release from the two companies said the CBDistillery website handles 30,000 monthly orders from “a significant repeat customer base.” DeGiglio said Village Farms has already completed the deal, and that Balanced Health’s profits will begin showing up immediately on his company’s balance sheet.

Village Farms expects Balanced Health to contribute over $30 million in sales during the coming year. The company is publicly traded on both the Nasdaq and the Toronto Stock Exchange.

Balanced Health CEO Chase Terwilliger said his team of 54 employees is “ecstatic” to join forces with the Canadian buyer, citing the opportunity to jointly expand its customer base. Despite its relatively small size, Balanced Health was named one of the top five CBD producers in the U.S. by market share, according to cannabis data firm Brightfield Group.

Brightfield credited Balanced Health’s digital-first investment strategy, CBDistillery website, #CBDMOVEMENT campaign and several other online initiatives that the brand spearheaded to align with a “more mainstream, frequent user.”

“Village Farms is a highly complementary match for Balanced Health, with a strong alignment of vision and values,” Terwilliger said. “We look forward to unparalleled collaboration, and a shared objective to be the leader in every market in which we participate.”