(A version of this story first appeared on Hemp Industry Daily.)

Valens Co. has agreed to purchase Florida hemp-CBD manufacturer Green Roads in a $40 million deal that will allow the Canadian marijuana company to enter the United States cannabinoid market.

The $40 million up-front purchase price includes $25.4 million in Valens Co. common shares and up to $14.6 million in cash.

Green Roads can receive up to an additional $20 million in earnout payments if financial goals are met after the transaction.

In a news release, British Columbia-based Valens said the purchase also allows it to enter the U.S. marijuana market if and when the federal government legalizes MJ.

“Additionally, Green Roads is strategically located in Florida, which has a robust state-legal medical cannabis program,” Valens noted.

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A privately owned hemp-derived CBD company, Green Roads makes consumer products including oils, topicals, personal care products, pet products and ingestibles such as hemp flower coffee and a line of functional gummies.

Its brands are sold online and in more than 7,000 retail stores nationwide.

Additionally, Green Roads provides B2B manufacturing services for several of its partners in two cGMP-compliant Florida facilities.

Valens expects the acquisition will be profitable for the company this year. With the potential earnout, the deal is valued at more than four times expected EBITDA for 2022.

The acquisition, expected to close in June, awaits approval from the Toronto Stock Exchange, where Valens trades as VLNS.