Perrigo Company plc is entering the cannabidiol (CBD) market through a strategic investment in and long-term supply agreement with Kazmira LLC, a leading supplier of hemp-based CBD products in Watkins, Colorado.
The fast-growing CBD market is emerging organically in response to changing consumer preferences for natural remedies. It aligns with Perrigo's vision "to make lives better by bringing quality, affordable self-care products that consumers trust everywhere they are sold."
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, in accordance with current Good Manufacturing Practices (cGMP), to produce THC-free CBD from industrial hemp that meets Perrigo's high standards for reliability and consistency. 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 five core growth pillars, and THC-free CBD products fit perfectly into our self-care strategy,” said Perrigo President and CEO Murray S. Kessler. “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."
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.
"We are proud to launch a strategic relationship with Perrigo, the industry leader in delivering safe and effective OTC self-care products,” said Kazmira Co-CEOs Dr. Priyanka Sharma and Pulak Sharma. “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."
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