Organigram, the Canadian cannabis group, has struck a deal in the cannabis-drinks market with a move for Collective Project.
Nasdaq-listed Organigram said it would pay an initial C$6.2m (US$4.4m) for Collective Project, a business based in Ontario but which sells in Canada and the US.
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“In an environment where consumers are shifting away from alcohol, brands that deliver on an enjoyable experience without the negative effects of alcohol will be poised to win in this alternative beverage category that is growing at a rapid rate in the US,” Organigram chief strategy officer Paolo De Luca said.
Collective Project, based in Hamilton, produces cannabis and hemp-derived infused sparkling juices, teas and sodas.
The company markets its drinks in Canada and in ten US states. Its US stockists include Top Ten Liquors in Minnesota and Total Wines in the states of North Carolina, South Carolina and Indiana.
Organigram is buying the Collective Project business from Collective Arts, which will retain its alcohol assets. Collective Arts sells beer in both markets.
De Luca added: “We believe that Collective Project’s portfolio of cannabis and hemp-derived THC beverages are differentiated, among the best-tasting products in the market today, and are sure to please consumers looking for a satisfying beverage alternative in both the US and Canada.”
Under the terms of the deal, Organigram said it could pay a total of C$24m once “potential milestone payments and potential earnout payments” are included.
Organigram said it expects Collective Project’s drinks will be available in four more US states by the end of the year.
“The acquisition of Collective Project marks yet another strategic milestone towards Organigram’s global leadership ambitions. Not only does this acquisition represent our first commercial entry into the fast-growing hemp-derived THC beverage market in the US, it also fast-tracks our entry into the cannabis beverage category in Canada, a category that we believe is on the cusp of growth at home as well,” Organigram CEO Beena Goldenberg added.
