Tilray is buying Manitoba Harvest, the world’s largest hemp foods manufacturer, for $317 million from Compass Diversified Holdings, eyeing the growing CBD food and drink market in the U.S.
The acquisition, announced Wednesday, gives Tilray access to the U.S. CBD market — and traditional retail spaces — starting with a line of CBD tinctures, sprays and soft gel caps, expected to launch this summer.
Tilray will issue another $37 million (C$49 million) in shares to Manitoba Harvest based on certain financial milestones in 2019.
Tilray, based in Canada, is one of the world’s largest manufacturers of medical cannabis. It was the first cannabis company with an initial public offering in the U.S. and began trading on the Nasdaq in July. The company is planning to open processing facilities in the U.S., since transporting CBD across the U.S.-Canada border is illegal.
CBD became legal in the U.S. when the farm bill was signed in December, but still remains illegal to sell in food and drink in the U.S. Some cities, including New York City, have been cracking down on CBD in food and drink sold in bars, cafes and restaurants. Products like tinctures, sprays and soft gel caps are perfectly legal throughout the U.S.
In Canada, hemp-derived CBD can only be cultivated by a licensed cannabis grower and is only sold in oils. Recreational cannabis was legalized in Canada in October.
Marijuana and CBD are both clearly becoming big business, even with the legalization lines still blurry.
Manitoba Harvest has been in business for over 20 years and is a leader in the natural foods industry. Its products are available in about 13,000 U.S. stores and 3,600 in Canada, including Amazon, Walmart and others. Products include Hemp Yeah! granola, bars and protein powder, hemp hearts and hemp oil. Hemp hearts, which are shelled hemp seeds, can be sprinkled on oatmeal, yogurt or eaten as a snack.
Hemp itself does not have the same effects as CBD, but is high in protein, amino acids and fatty acids, including omega-6 Gamma Linolenic Acid (GLA), helping with cholesterol, inflammation, skin and hair health, balancing hormones, and general heart health, according to Manitoba’s website.