TORONTO – Canadian cannabis company Cronos has just agreed to a major deal that will provide them with a path into the U.S. market.
Cronos has agreed to purchase Redwood Holdings Group LLC, the parent company of prominent U.S.-based CBD maker Lord Jones. Lord Jones’ CBD line includes tinctures, topicals, edibles, and gel capsules.
The deal is worth $300 million in total through a combination of $225 million in cash and the remaining $75 million compensated through stock in four of Cronos’ subsidiary companies, according to Bloomberg. Shares of Cronos rose 7 percent on Friday after the deal was announced.
Cindy Capobianco and husband Robert Rosenheck founded Lord Jones in 2015. They will join Cronos and help the company navigate the U.S. CBD market.
“The inspiration for our company was simple, we wanted to create a brand we wished we could buy as adult consumers,” Rosenheck said in a release. “We chose Cronos Group because they share our vision and values and will help us continue our mission. We are incredibly proud of our team and grateful to our customers who are responsible for our success. Cindy and I look forward to working with Cronos Group to further extend the love and enthusiasm for our products.”
Cronos Chief Executive Officer Mike Gorenstein echoed the sentiment, saying the company planned to maintain the brand vision Lord Jones has built over the years.
“Our goal is to preserve the integrity of all Rob and Cindy have created, while also learning from them and leveraging Cronos Group’s resources to capitalize on the significant demand for skincare and other consumer products derived from hemp,” Gorenstein said.
The deal comes as Lord Jones’ visibility has been rising steadily. Lord Jones is one of the few CBD companies available on the shelves of national retailers including Sephora.
The Cronos acquisition of Redwood is expected to be completed before the end of fiscal quarter three.