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Vertically integrated cannabis company Acreage Holdings, Inc. (CSE:ACRG) (OTC:ACRGF) and Medterra CBD, LLC are joining forces to develop a CBD-based collection of products.
The move follows the recent sale of Acreage's Florida operations to Red White & Bloom Brands, Inc. (CSE:RWB) (OTCQX:RWBYF) for $60 million.
The JV Deal: Under the joint venture between Acreage and Medterra, Five Farms CBD, LLC., Medterra's subsidiary - opted to develop CBD products under Acreage's brand, The Botanist.
Acreage agreed to license The Botanist brand to Five Farms, which will produce as well as market and sell CBD products under The Botanist brand via Medterra's e-commerce platform.
What It Means For Acreage: The partnership between Acreage's subsidiary Universal Hemp, LLC and Medterra allows Acreage to utilize Medterra's innovation pipeline, high-quality CBD, and e-commerce platform to distribute CBD products nationwide. Medterra is one of the largest CBD companies in the industry.
Botanist CBD products are expected to hit the shelves in the second half of 2021.
"Incorporating Acreage's The Botanist brand, under Five Farms will allow us to innovate for their target demographic and rapidly expand the brand's national footprint - it's an evolution for both industries and the future of CBD and cannabis companies," J.P. Larsen, co-founder of Medterra and president of Five Farms, said Monday.
Acreage CEO Peter Caldini commented that "this asset-lite approach to entering the U.S. CBD market with Medterra" will position the New York-based company to “realize a low-risk, high-margin revenue stream."
The combination of The Botanist and Medterra's fastest-growing line, Five Farms, "ensures the broadest consumer distribution through their industry-leading e-commerce platform, as well as the most efficient 'go-to-market' strategy," Caldini added.
Acreage's industry peers have been pursuing opportunities within the CBD market as well.
The Valens Company Inc. (TSX:VLNS) (OTCQX:VLNCF) announced last Tuesday that it was poised to acquire the U.S.-based, privately owned CBD company Green Roads and its manufacturing subsidiary for $40 million in cash and stock.
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