Charlotte’s Web Holdings Inc. (Boulder, CO) and Abacus Health Products Inc. (Toronto, Canada), a leader in over-the-counter topical products that combine active pharmaceutical ingredients with hemp extract, have entered into an agreement in which Charlotte’s Web will acquire all the issued and outstanding subordinate voting shares of Abacus. Under the terms of the agreement, shareholders of Abacus will receive 0.85 of a common share of Charlotte’s Web for each Abacus share held.
This acquisition combines Charlotte’s Web and Abacus into the world’s largest vertically integrated hemp-derived CBD company. The combined entity is anticipated to represent about 34.7% of U.S. cannabidiol (CBD) sales in the food, drug, and mass market channel (F/M/D), with combined sales of $29.1 million in the third quarter of 2019. The acquisition will expand the Charlotte’s Web product portfolio to include topicals and enables Abacus to utilize Charlotte’s Web’s hemp extract across its product portfolio as well as low-cost vertical supply chain.
"The complementary strengths of our relative market positions made this merger a logical strategic move," said Deanie Elsner, CEO of Charlotte's Web, in a press release. "With this acquisition we strengthen the business to reflect the evolution of the category. Because most of Abacus's products are positioned in adjacent categories, our combined distribution reach has limited shelf overlap. Together we are the most developed CBD company across every channel and segment and positioned to accelerate our growth and extend our market share. Furthermore, it enables us to drive more scale production through our vertically integrated infrastructure."
"Abacus is one of the largest suppliers and distributors in the United States of topical products infused with hemp extract to the F/D/M and healthcare practitioner markets,” stated Perry Antelman, CEO of Abacus, in a press release. “By joining with Charlotte's Web, we have the opportunity to maximize our growth by leveraging the company's leading brand, vertical integration, infrastructure, expertise, financial position and capital markets presence, and position the combined company to deliver benefits for our stakeholders over the long-term."