Valens enters U.S. CBD market with Green Roads acquisition
Canadian cannabis company Valens is entering the U.S. CBD market with the acquisition of CBD product maker Green Roads and its manufacturing subsidiary. The Kelowna, British Columbia-based company is putting up $40 million in cash and stock upfront for Green Roads, with an additional $20 million milestone payment available once the business achieves certain financial milestones.
With the acquisition, the Valens gains an established manufacturing and distribution platform, as well as Green Roads’ leadership team, which has deep knowledge of the cannabis CPG market in the United States. Green Roads currently is one of the largest CBD brands in the United States by market share. The company said the acquisition also would help strengthen its position in Canada, bringing Green Roads products to the country and unlocking new revenue.
“The combination of Valens and Green Roads makes for an unbeatable team, diversified distribution network, and unparalleled product development and manufacturing platform, which we expect will provide us the footprint to become one of the biggest players in the global cannabis health and wellness market,” said Tyler Robson, CEO, co-founder and chair of Valens. “Stay tuned for updates on anticipated synergies as we move forward as a stronger, combined company."
In addition to gaining ground in two countries, Valens said buying Green Roads also would grow its global exposure, with the companies offering their products in 11 countries collectively, with late-stage discussions being held about entering Latin America, the Asia-Pacific region and Europe.
Valens said it is expecting to invest some $10 million into Green Roads to capitalize on anticipated growth in the U.S. CBD market and develop Green Roads’ leading e-commerce platform while expanding its retail distribution and funding sales and marketing resources.
"The combination of Green Roads and Valens creates a truly global company with a clear leadership position both within the US CBD market and Canada's domestic cannabis market,” said Dale Baker, president and CEO of Green Roads. “With this larger platform, we look forward to launching Green Roads products in Canada in the second half of 2021 and leveraging our own manufacturing facilities to export CBD products internationally. Valens and Greens Roads have a shared ethos of keeping our customers at the heart of our strategic decision-making and offer complementary products that foster brand loyalty and drive high margins. With our enhanced platform, we look forward to accelerating our global expansion plans and bringing our growing portfolio of products to an even broader customer base.”