Perrigo Gets Into The CBD Business

Perrigo Company PLC (NYSE: PRGO), one of the world’s largest producers of over-the-counter self-care products, is entering the CBD business.

Perrigo will acquire an equity stake of roughly 20% in Kazmira for $50 million. $15 million will be paid upon the closing of the transaction, with the balance due within an 18-month period.

The company announced this move will be enabled by a strategic minority investment and long-term supply deal with hemp-based CBD producer Kazmira LLC.

Further Bettering Lives

By partnering with the Watkins, Colorado-based company, Perrigo believes it can further its mission “to make lives better by bringing quality, affordable self-care products that consumers trust everywhere they are sold,” a press release explained.

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According to a company spokesperson, this partnership focuses on:

• Large scale production and supply of current Good Manufacturing Processes (cGMP) compliant, THC-free CBD.
• Utilizing the THC-free, hemp-based CBD supply for Perrigo to launch products globally.
• Leveraging the exclusive supply agreement 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,” said Perrigo’s CEO and president Murray Kessler in a press release. “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.”

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Perrigo, which has a market cap of about $7.4 billion, currently provides more than 1,900 over-the-counter products sold under 130 different customer store brand labels at major retailers like Walmart Inc (NYSE: WMT), CVS Health Corp (NYSE: CVS), Amazon.com, Inc. (NASDAQ: AMZN), and more.

Lead image by Ilona Szentivanyi. Copyright: Benzinga.