Cannabis giant Tilray is expanding into the natural foods category with the acquisition of hemp foods company Manitoba Harvest for 419 million Canadian dollars ($319 million) in cash and stock in an effort to capitalize on cannabidiol-infused products in North America.
The acquisition will accelerate British Columbia-based Tilray’s expansion into the U.S. and Canadian markets for CBD products, Tilray said in a news release.
Manitoba Harvest, based in Winnipeg, already sells hemp food products in more than 16,000 stores in the United States and Canada and plans to launch a line of CBD products this summer.
Under the terms of the agreement, Tilray will acquire Manitoba Harvest from the Compass Group and other shareholders for CA$277.5 million at closing, which will be comprised of CA$150 million in cash and another CA$127.5 million in Tilray shares.
After six months, Tilray will pay another CA$92.5 million – CA$50 million in cash and CA$42.5 million in stock.
Tilray says it will issue CA$49 million in shares based on Manitoba Harvest achieving performance milestones this year.
The two companies will work together to develop new CBD wellness products and hemp-based consumer foods.
Manitoba Harvest will operate as a wholly owned subsidiary of Tilray after the deal closes, which is expected within the next 30 days.
It’s the second significant acquisition in Canada by the multinational Tilray since going public on the Nasdaq exchange last year.
Tuesday, Tilray completed its acquisition of Natura Naturals Holdings, the parent company of an Ontario licensed cultivator, for up to CA$70 million.
Tilray said it delivered CA$35 million at closing, including CA$15 million in cash and CA$20 million in Tilray stock. Another CA$35 million of Tilray stock may be payable upon Natura reaching certain quarterly production milestones.
Tilray currently operates three facilities in Canada and one in Portugal.
The Natura facility will operate as High Park Gardens.
Tilray’s shares trade on the Nasdaq as TLRY.