TerrAscend Corp. (OTCQX: TRSSF) has signed an agreement to acquire all of the assets of Grander Distribution, which is engaged in the production and distribution of hemp-derived wellness products.
The purchase price was $13 million, which is an equal combination of cash and stock, with the potential for additional consideration of up to $10 million based on revenue targets of $35 million in 2019 and $50 million in 2020.
The transaction is expected to close by January 15, 2019, subject to standard closing requirements.
“With the passing of the 2018 US Farm Bill, and the closing of this transaction, TerrAscend will be well positioned to take advantage of the substantial hemp-derived product opportunity,” Matthew Johnson, president TerrAscend Corp., and TerrAscend USA, said in a statement.
Vast Opportunities in U.S. Hemp Market
Hemp is now legal in the U.S., thanks to the passing of the 2018 US Farm Bill by President Trump on December 20.
The bill removes industrial hemp (hemp or hemp products containing less than 0.3% tetrahydrocannabinol or THC) from the Controlled Substances Act. The U.S. Department of Agriculture, as well as participating states, will now supervise the cultivation and use of industrial hemp.
The legalization of hemp-derived CBD could triple the overall hemp market to $2.5 billion by 2022, with $1.3 billion of those sales from hemp-derived CBD products, The Associated Press reported, citing cannabis market research firm New Frontier Data.
“The immediate impact of the Farm Bill will likely be greater confidence among large retailers to carry CBD products. We are anticipating our distribution channels will see significant growth during the coming months leading to exponentially higher sales the first half of 2019. The signing of the bill is also expected to result in a greater influx of capital, with investors becoming more comfortable aligning themselves with the industry,” Steven Saxton, the founder and CEO of Green Gorilla, a manufacturer and brand of CBD products, said in statement.