Perrigo Enters CBD Business With $50 Mln Strategic Investment In Kazmira

(RTTNews) - Perrigo Co. plc, a producer of over-the-counter health and wellness products, plans to enter the cannabidiol or CBD market through a strategic investment in and long-term supply deal with Kazmira LLC.

Watkins, Colorado-based Kazmira is an industrial scale producer of tetrahydrocannabinol or THC-free, broad-spectrum CBD oil and THC-free CBD isolate from American-grown ground industrial hemp.

The primary ingredient in marijuana is THC, a psychoactive compound that induces the "high" and hallucinogenic effect in the user. CBD is also derived from cannabis plants and does not have psychoactive properties like THC. CBD is believed to relieve or ease symptoms related to health problems.

In addition to the supply agreement, Perrigo will acquire a nearly 20 percent equity stake in Kazmira for $50 million, with $15 million to be paid upon close of the transaction and the balance to be paid within eighteen months.

Perrigo's minority equity investment in Kazmira will start the first phase of their partnership where the two companies will collaborate to scale-up Kazmira's facilities and laboratories, in accordance with current Good Manufacturing Practices or cGMP 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 several 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. 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," said Perrigo CEO and President Murray Kessler.