Two cannabidiol (CBD)-based companies are joining forces to become the strongest competitor in the US market. One of the leaders in the CBD industry, Charlotte’s Web Hemp (CNQ: CWEB , announced Monday that it is acquiring another company dedicated to making CBD-based products, Abacus Health Products. This deal involves Abacus shareholders receiving 0.85 shares of Charlotte’s Web stock for each Abacus share they owned, with the total sale worth almost $69 million. Combined, the two companies expect to have 34.7% of the US CBD market share.
Abacus Health sells topical products available for purchase over the counter. These products contain, besides CDB, other active pharmaceutical products. Its products are currently for sale in at least 12,000 locations, more than the 11,000 retail stores across the country in which Charlotte’s Web products are available. This fusion means that, accounting for overlap, this new merger company will have a presence in at least 15,000 locations. On top of that, Abacus Health has access to 16,500 health-care practitioners.
“Because most of Abacus’s products are positioned in adjacent categories, our combined distribution reach has limited shelf overlap,” notes Deanie Elsner, CEO of Charlotte’s Web. “Together we are the most developed CBD company across every channel and segment and positioned to accelerate our growth and extend our market share.”
The acquisition is still in progress, and so far, it has received approval from both board of directors, but it is still awaiting approval from Abacus Health shareholders. The goal is to finish the process at some point during the second quarter.
The news was well-received by investors, and Charlotte’s Web stock was up 8% yesterday, a great figure after a year of the downfall the cannabis industry experienced. Charlotte’s Web offers high-quality hemp extracts from plants with naturally occurring CBD. They have many presentations such as oils, CBD capsules, its popular gummies and much more.