iAnthus Capital Holdings Inc., a Vancouver, Canada based marijuana-centric and cannabis cultivation company has recently announced that its wholly-owned subsidiary has reportedly entered into a letter of intent to acquire CBD for life, which is a cannabis brand based in Arizona. The acquisition is reportedly in line with the company's goal of extending their cannabis footprint not just in Canada, but also in its Western counterparts.
In a release regarding the new company acquisition, Beth Stavola, who's the co-founder of CBD For Life, "We're excited to bring CBD For Life into the iAnthus family - our CBD brand will provide iAnthus with even greater reach and a wider consumer base, particularly in states that have yet to implement full-scale cannabis programs."
The brand CBD For Life had its inception in February 2016 in Arizona, and saw its first foray into the public market not long after, reaching wide success in the state's marijuana market. As a matter of fact, the brand's CBD-infused pain management and beauty products are all met with varying degrees of success, with most of it being featured in a wide range of online and print publications. This includes giants like Forbes, Cosmopolitan, Allure, Women's Health, Shape, and even Marie Claire.
Presently, the company's numerous products are available directly to consumers through its online service, with the company also distributing throughout 750 retail locations. Furthermore, the company is also actively on-boarding around 25 new locations on a weekly basis and even has a dedicated sales channel working with retailers from the national market.
The acquisition
In return for 2,529,863 common shares of iAnthus, the company is reportedly expecting that it will acquire 100 percent of CBD For Life's equity interests. Based on a fixed share price of US$5.41 (the closing price of ITHUF shares on the OTCQX as of March 15, 2019), the stock consideration equates to US$13.7 million. Once the transaction closes, iAnthus also expects to repay the outstanding debt, as well as the related accrued interest for CBD. Per a release from the company, the amount is approximately around $2 million in cash.
Per industry experts in the space, back in 2018, retail sales for CBD consumer products estimated to have been between US$600 million and US$2 billion. However, that number is projected to reach around $16 billion by the year 2025, due to an increasing number of CBD companies operating in the space.
