In yet another instance of Canadian companies setting their sights south towards the American Green Rush, cannabis company Tilray announced Feb. 20 that it agreed to acquire U.S.-based hemp food manufacturer Manitoba Harvest for $419 million.
This buy represents an apparent effort by Tilray to dip into the freshly legal American CBD marketplace, especially given Manitoba Harvest’s wide stateside distribution network — their hemp products, including granola, hemp milk and hemp hearts, are currently sold in grocery mega-chains like Whole Foods, Costco and Walmart.
The “Power of Hemp”
“Tilray’s acquisition of Manitoba Harvest is a milestone for the cannabis industry. It builds on the strategic partnerships we have formed with consumer brand industry leaders and demonstrates our track record of disrupting the global pharmaceutical, alcohol, CPG and functional food and beverage categories,” said Brendan Kennedy, Tilray president and CEO, in a press release regarding the sale. “We’re excited to work with Manitoba Harvest to develop and distribute a diverse portfolio of branded hemp-derived CBD food and wellness products in the U.S. and Canada.”
The same press release also teased a “line of CBD containing Broad Spectrum Hemp Extracts” set to launch this summer.
Manitoba Harvest CEO Bill Chiasson, who told Cheddar his company’s goal is “to help people transform their lives through the power of hemp,” shared Kennedy’s enthusiasm about the acquisition in a short interview two days after the buy was announced. “We really see that by being able to tap into the know-how, the expertise of Tilray, we’re going to be able to accelerate this to support our consumers even more,” Chiasson said, citing Tilray’s research and development and “technical resources” as some of the company’s major assets.
This acquisition is the latest in a line of buyouts of American cannabis businesses by Canadian companies, coming on the heels of a pair of deals between Bay Area dispensaries Harborside and Apothecarium to two Canadian companies, Lineage Grow Co. and TerrAscend.
Clarity in the Regulatory Environment
It’s no surprise to see big money players in the cannabis industry turning their eyes and (opening their wallets) towards THC’s less trippy cousin. CBD is purported to have a slew of health benefits, from decreasing anxiety to alleviating seizures, and its former gray-area legal status helped make it the additive du jour in coffee shops and restaurants across the U.S.
And after the 2018 Farm Bill rendered hemp federally legal in late December, the trendy cannabinoid became an even hotter commodity, and acquisitions like this one make it apparent that the global cannabis industry has taken note — despite some recent regulatory efforts from the FDA.
But it appears that the higher-ups at Manitoba Harvest, and by extension Tilray, are mostly unconcerned about how those regulations will impact their future CBD-related endeavors.
“Different states have their own regulations and we want to be very careful as we navigate through those, that we stay within the boundaries of the regulatory market that we’re in,” Chiasson told Cheddar. “I do think that the regulatory environment is gaining a greater clarity and will continue to do that over the years.”
And based on the fact that members of Congress have already expressed skepticism about the FDA’s recent crackdown, it looks likely that Chiasson and other CBD believers are right to be confident, at least when it comes to legality. Whether or not CBD is actually the cure-all some promise might be a different story.
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