CBD maker Elixinol Global has agreed to acquire CannaCare Health GmbH of Germany in a deal pegged at €9 million. Elixinol said it will pay €3 million in cash and €6 million in stock for the Hamburg-based CBD maker. Under a sweetener in the agreement, that total price could rise to €24 million if CannaCare meets agreed business goals.
The companies said the deal will give access across Germany, Austria and Switzerland for Elixinol branded products; and opportunities for CannaCare’s CANOBO brand CBD in the UK market through Elixinol’s existing customer relationships.
“The combination of CannaCare with Elixinol’s UK business is expected to create a pan-European business of scale, well positioned to capitalize on a burgeoning European CBD market,” the companies said in a statement.
Founded in 2018 by major shareholder and media entrepreneur Frank Otto, CannaCare, makes 20 products under the CANOBO brand – oils, sprays and skincare products. The company has distribution in as many as 4,500 retail outlets in Germany including major chains Rossmann, Mueller and Budnikowski, as well as individual pharmacies.
“The compatibility of the businesses will give yet another boost to CANOBO on its trajectory to become the leading German brand in the fast growing CBD market,” said Otto, who is to join the Elixinol board of directors as a non-executive director.
CannaCare’s current management team is to continue to operate the business. Michael Oplesch becomes a consultant to CannaCare and member of CannaCare’s Advisory Board.
U.S. cannabis researchers Brightfield Group have identified Europe as the world’s second largest CBD market after the USA, and forecast 400% growth over the next five years to reach $2.3 billion in 2025.
Germany’s CBD market, the second largest European market after the UK, is projected to account for about 25% of the European total, or $600 million, in the same time frame, Brightfield Group has projected.
Elixinol, with headquarters in Colorado, USA and Sydney, Australia, trades on the Australian Stock Exchange.