Perrigo Co. plc plans to enter the CBD market through a strategic investment and a long-term agreement with a Colorado supplier.
Under a deal announced today, Perrigo plans to make a $50 million investment for a 20-percent stake investment in Kazmira LLC. Perrigo will pay Kazmira $15 million when the deal closes, and the balance within 18 months.
The two companies said they will collaborate to bolster the Watkin, Colo.-based Kazmira’s facilities and laboratories under a long-term supply agreement to produce CBD products from industrial hemp that “meets Perrigo’s high standards for reliability and consistency.”
CBD, or cannabidiol, is derived from cannabis plants and doesn’t have psychoactive properties like THC. CBD is commonly used to manage anxiety and insomnia.
“Science-based natural products are one of Perrigo’s five core growth pillars and THC-free CBD products fit perfectly into our self-care strategy,” Perrigo President and CEO Murray Kessler said in a statement. “Until now, this emerging industry has lacked the regulatory expertise necessary to bring a trusted supply of CBD to market. Some have even described it as the wild, wild west. We believe that Kazmira’s deep understanding of CBD science, combined with Perrigo’s regulatory expertise and investment, allows us to lead the industry through the next phase of development of rigorous quality standards and proactive engagement with regulators.”
Perrigo said it intends to sell CBD products in a number of global markets. Kazmira will become the exclusive supplier for the U.S. store-brand market.
Kessler called the deal with Kazmira “a great opportunity to enhance profitable growth for our shareholders over the long-term.”
“Consumers and retail customers want CBD products and we believe they deserve a reliable source of broad-spectrum, THC-free CBD they can depend on,” he said. “Whether it is the specific concentration of CBD or a THC-free claim, consumers must be able to trust statements made on the label of a product and we believe Perrigo can provide this to the marketplace.”
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