Perrigo has struck a deal that will see it partnering with CBD suppler Kazmira to ultimately bring store-brand CBD products to market.
The partnership includes Perrigo making a strategic investment in Kazmira alongside an exclusive supply agreement, each of which constitutes a separate phase of the partnership. In the first phase, Perrigo’s minority investment will go toward building up Kazmira’s facilities and laboratories in compliance with good manufacturing practices to produce THC-free CBD from industrial hemp. The second phase will see Perrigo developing CBD products for the global market and leveraging the supply agreement for the U.S. store brand market.
"Science-based natural products are one of Perrigo's five core growth pillars and THC-free CBD products fit perfectly into our self-care strategy,” said Murray Kessler, president and CEO of Perrigo. “Until now, this emerging industry has lacked the regulatory expertise necessary to bring a trusted supply of CBD to market. Some have even described it as the wild, wild west. We believe that Kazmira's deep understanding of CBD science, combined with Perrigo's regulatory expertise and investment, allows us to lead the industry through the next phase of development of rigorous quality standards and proactive engagement with regulators."
Kessler said that Perrigo saw an opportunity to be a reliable source for CBD products. “Whether it is the specific concentration of CBD or a THC-free claim, consumers must be able to trust statements made on the label of a product and we believe Perrigo can provide this to the marketplace,” he said. “We are excited to partner with the team at Kazmira, who share our passion for developing a science-based, regulatory approach to unlock the full potential of this emerging industry. This collaboration offers a great opportunity to enhance profitable growth for our shareholders over the long-term."
Perrigo’s $50 million minority investment represents a roughly 20% stake in Kazmira. As part of the agreement, $15 million will be paid when the deal closes, with the balance set to be paid within 18 months.
"We are proud to launch a strategic relationship with Perrigo, the industry leader in delivering safe and effective OTC self-care products,” Kazmira co-CEOs Priyanka Sharma and Pulak Sharma said in a statement. “As we continue to grow our business, we look forward to leveraging Perrigo's regulatory and manufacturing expertise in concert with Kazmira's proprietary technology for large-scale biomass processing and our established reputation for producing and marketing the highest quality THC-free CBD products."