HempFusion grows retail footprint, capabilities with 2 acquisitions

The company’s acquisitions of Apothecanna and Sagely Naturals expands its distribution footprint to more than 15,000 stores, brings in new capabilities and adds established talent to its roster.
David Salazar
Managing Editor
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HempFusion Wellness has made two acquisitions in as many weeks, growing its product portfolio and retail footprint. Last week, the Denver-based company acquired cannabis body care and topical company Apothecanna, and on Tuesday it acquired Sagely Enterprises, maker of Sagely Naturals, which has mass distribution in more than 14,000 U.S. retailers. 

a close up of a bottle

With the $15 million Apothecanna acquisition, HempFusion gains significant CBD topical distribution to 1,800 stores — including at CVS Pharmacy and 7th Sense — as well as significant market share in the Canadian marketplace via an existing strategic business relationship. Apothecanna also brings the company significant e-commerce revenues, which comprise roughly 50% of Apothecanna’s revenues. 

With more than $4 million in sales in 2020, the Apothecanna acquisition will be immediately accretive to HempFusion when it closes. The company also brings with it more distribution channels, a robust e-commerce platform and topical product efficiencies with the near-term opportunity for expansion into ingestible products. Besides the stock-and-cash consideration, Apothecanna is eligible for as much as $10 million milestone payment if the company can achieve certain revenue targets within 12 months of closing. 

a close up of a bottle

HempFusion’s acquisition of Sagely Naturals will see the company paying $25 million upfront, including $2 million cash and $23 million in HempFusion common shares. Sagely Naturals was started in 2015 and is the nation’s largest female-founded CBD wellness brand with distribution at CVS Pharmacy, Rite Aid, Albertsons banners, Sprouts Farmers Market, Nordstrom and several independent regional grocers and natural food stores. The brand has 23% market share in the drug channel and 13.8% share in the U.S. multi-outlet channel, per IRI data. 

Besides its sales prowess, Sagely Naturals counts among its consumers and investors celebrities that include Cameron Diaz, Zoe Saldana and Molly Sims. Sagely Naturals had $4.2 million in revenue in 2020 and employs a c-suite HempFusion said would bring expertise in marketing, innovation and relationships to the company.  HempFusion said the company also has potential to expand further into ingestibles and its suite of complementary products offers significant cross-platform opportunities in their respective distribution channels. 

“Upon closing, the acquisition of Sagely Naturals immediately adds significant value to shareholders. By more than tripling our 2020 revenue (when combined with the closing of Apothecanna), expanding to over 15,000 stores, expanding our distribution strategy to six channels, combining some of the top executive talent in the industry, and bringing together over 75 incredible and best-selling SKUs, HempFusion is in its strongest position to date,” said Jason Mitchell, co-founder and CEO of HempFusion. “We expect the combined proforma entity to achieve substantial growth over our historical financials and cement our leadership position in the CBD industry while setting the stage for tremendous growth in 2021 and 2022.”