HempFusion Wellness inks deal to buy pioneering CBD brand Apothecanna

HempFusion Wellness Inc (TSE:CBD.U) (OTCQX:CBDHF) (FRA:8OO) announced an agreement to acquire a 100% interest in APCNA Holdings LLC, also known as Apothecanna, for an initial consideration of US$15 million payable in cash, HempFusion common shares, or a combination of both to be decided by HempFusion.

The company said Apothecanna, which is focused on the premium recovery, pharmacy, and spa segments with its all-natural CBD products, was the first cannabis-powered body care and topicals brand to expand nationally and obtain a Federal Trademark.

“We are incredibly excited to enter into this agreement with Apothecanna, which, on closing, will have an immediate impact on HempFusion’s revenue while significantly bolstering our distribution and eCommerce platforms,” HempFusion Wellness CEO Jason Mitchell said in a statement.

READ: HempFusion utilizing the power of whole-food hemp nutrition

“We look forward to working to close the transaction as soon as possible,” Mitchell added.

The company noted that Apothecanna generated revenue of over US$4 million in 2020, which HempFusion said will double its historical revenue with significant expansion planned for 2021 and beyond, making the deal immediately accretive upon closing.

As well, HempFusion said the acquisition will give it access to Apothecanna’s distribution network of about 1,800 retail stores, which includes CVS pharmacies.

It added that Apothecanna was the top-selling topical at the Ontario Cannabis Store in 2020.  

HempFusion has also agreed to pay up to an additional US$10 million to the sellers in cash, HempFusion shares or a combination of both should Apothecanna achieve certain revenue targets (with a minimum revenue threshold of US$6 million) within 12 months of closing.

Any shares issued by HempFusion will be valued at a deemed price per share of about US$1.19.

HempFusion also reported voting results from its annual general meeting, saying its shareholders approved the election of all director nominees.

HempFusion distributes its family of brands, including HempFusion, Probulin Probiotics, Biome Research, and HF Labs, to around 4,000 retail locations across all 50 states of the US and select international locations.

In addition, HempFusion’s wholly-owned subsidiary Probulin Probiotics is one of the fastest-growing probiotics companies in the US, according to data technology company SPINS. The subsidiary offers the unique MAKtrek 3-D system that ensures more probiotics arrive alive.

Contact Sean at [email protected]

Story by ProactiveInvestors