Perrigo Co., a global supplier and manufacturer of private label over-the-counter pharmaceuticals which has its operational headquarters in Allegan, southeast of Holland, today announced it is entering the cannabidiol (“CBD”) market.
The deal entails a strategic investment and long-term supply agreement with Kazmira, a leading supplier of hemp-based CBD products free of tetrahydrocannabinol (“THC-free”) based in Colorado.
In recent years, the fast-growing and rapidly evolving CBD market has emerged in response to changing consumer preferences for natural remedies.
In addition to the supply agreement, Perrigo will acquire an approximate 20 percent equity stake in Kazmira for $50 million, with $15 million paid upon close of the transaction and the balance within 18 months.
Perrigo’s minority equity investment initiates the first phase of the partnership where the two companies will collaborate to scale-up Kazmira’s facilities and laboratories, to produce THC-free CBD from industrial hemp.
In the second phase of the partnership, Perrigo will work to launch THC-free hemp-based CBD products in a number of global markets, while leveraging its supply agreement with Kazmira, which is exclusive for the U.S. store brand market.
“Science-based natural products are one of Perrigo’s 5 core growth pillars, and THC-free CBD products fit perfectly into our self-care strategy,” says Murray S. 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.”
“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.”
Kazmira Co-CEOs Dr. Priyanka Sharma and Pulak Sharma said they were “proud to launch a strategic relationship with Perrigo, the industry leader in delivering safe and effective OTC self-care products. 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.”
Perrigo, founded in Allegan in 1887, has its legal headquarters in Dublin, Ireland, to avoid paying U.S. taxes.
