Perrigo enters CBD market as GrowGeneration buys H2O Hydroponics assets
In this week's "Rising High," The Fly's recurring series focused on cannabis stock news, The Fly looks back at an earnings report, a supply agreement and acquisitions.
PERRIGO INVESTS $50M in KAZMIRA: Perrigo Company (PRGO) announced Wednesday that it is entering the cannabidiol market through a strategic investment in and long-term supply agreement with Kazmira, a supplier of hemp-based CBD products free of tetrahydrocannabinol. Perrigo's minority equity investment initiates the first phase of the partnership where the two companies will collaborate to scale-up Kazmira's facilities and laboratories to produce THC-free CBD from industrial hemp that meets Perrigo's standards for reliability and consistency. In the second phase of the partnership, Perrigo will work to launch THC-free hemp-based CBD products in a number of global markets, while leveraging its supply agreement with Kazmira, which is exclusive for the U.S. store brand market. In addition to the the supply agreement, Perrigo will acquire an approximate 20% equity stake in Kazmira for $50M with $15M paid upon close of the transaction and the balance within 18 months.
GROWGENERATION PURCHASE H20 HYDROPONICS ASSETS: GrowGeneration (GRWG) announced Wednesday it has purchased the assets of H2O Hydroponics, a hydroponic garden center in Lansing, MI. Following the asset purchase, the company will open a new location in Lansing, which will serve as a retail operation and a fulfillment center, supporting the company's online and direct-to-farm deliveries. CEO Darren Lampert said, "H2O Hydroponics is the largest hydroponic store in Lansing, MI. with 2019 sales of approximately $4M. We are consolidating our current West Lansing location, with H2O, and relocating into a newly built 15,000 square foot super hydroponic garden center, that we expect will generate over $7M in sales. With this acquisition, we continue to increase our footprint and strengthened our supply chain in the Michigan market."
VALENS ENTERS MANUFACTURING DEAL WITH HIGH12: The Valens Company (VLNCF) announced Monday a custom manufacturing agreement with High12 to develop a line of vape products for the launch of its brand Daize. Under the terms of the High12 agreement, The Valens Company and High12 will partner for a two-year term with successive one-year renewal options. Further, the parties have collaborated to develop a customized collection of products in partnership with The Blinc Group to align with the Daize brand identity. The procurement of customized hardware and the development and manufacturing of the Daize brand portfolio is expected to begin immediately. The High12 agreement will follow a royalty payment structure based on a set of outlined quarterly targets. The Valens Company and High12 expect to initially launch these products in Q3 in Alberta, British Columbia and Ontario.
AUXLY JV PARTNER RECEIVES LICENSE: Auxly Cannabis Group (CBWTF) announced Monday that its joint venture partner Sunens Farms has secured a standard cultivation license from Health Canada for the first phase of its greenhouse facility in Leamington, Ontario. The Sunens facility is operational and the team will immediately begin cultivating cannabis within the licensed area. This license allows Sunens to commence bulk sales of cannabis following harvest without additional regulatory approvals. Cannabis harvested from the facility will support the production of Auxly's branded derivative cannabis products manufactured at the company's Dosecann. The company anticipates that the additional license amendments for the remaining phases will be submitted throughout the course of 2020, and upon receipt of such amendments, the entire cultivation footprint for the project will be licensed.
DELTA 9 ACQUIRES OCEANIC SHARES: Delta 9 Cannabis (VRNDF) announced Monday that it has entered into a definitive agreement with Oceanic Releaf and Taylor Giovannini to acquire a 5% interest in the common stock of Oceanic in exchange for certain consulting and training services to Oceanic. Delta 9 also entered into an agreement with the Province of Newfoundland and Labrador, Newfoundland and Labrador Liquor Corporation and Oceanic pursuant to which Delta 9 will supply cannabis and cannabis-related products in that Province. Consideration for the common shares acquired by Delta 9 in the capital stock of Oceanic will be paid by way of the provision of certain consulting and training services to Oceanic over a term of one year pursuant to a strategic cooperation agreement.
OTHER CANNABIS STOCKS: Other publicly-traded companies in the space include Akerna (KERN), Aleafia (ALEAF), Aphria (APHA), Aurora Cannabis (ACB), Biome Grow (BIOIF), CannTrust (CTST), Canopy Growth (CGC), Canopy Rivers (CNPOF), Cresco Labs (CRLBF), Cronos Group (CRON), CV Sciences (CVSI), Delta 9, DionyMed Brands (DYMEF), Elixinol Global (ELLXF), FluroTech (FLURF), General Cannabis (CANN), Green Thumb Industries (GTBIF), Harborside (HSDEF), HEXO (HEXO), Hemp Inc. (HEMP), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), ICC International Cannabis (WLDCF), Khiron Life Sciences (KHRNF), Liberty Health Sciences (LHSIF), MediPharm Labs (MEDIF), MedMen (MMNFF), Mjardin (MJARF), Neptune Wellness Solutions (NEPT), Organigram (OGI), Origin House (ORHOF), Planet 13 (PLNHF), Real Brands (RLBD), Sproutly (SRUTF), Sunniva (SNNVF), Supreme Cannabis (SPRWF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Vireo Health (VREOF), Wayland Group (MRRCF), WeedMD (WDDMF), Westleaf (WSLFF), Wildflower Brands (WLDFF), YSS Corp. (YSSCF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).