San Diego, CA—Consumer wellness company CV Sciences, Inc., specializing in hemp extracts and other science-backed, natural ingredients and products, has entered into a definitive purchase agreement to acquire manufacturer and distributor of premium cannabinoid products, Extract Labs, Inc. The deal, which is subject to customary conditions precedent, is expected to finalize during the first quarter of 2025.
About the deal
Acquisition of the GMP-certified, FDA-registered company is expected to in-source the production of certain key products and increase sales of the brand's high-end cannabinoid products, which range from gummies to topicals and tinctures and are sold through an assortment of sales channels from B2B to B2C.
"We are thrilled that Extract Labs and its employees are joining CV Sciences as another milestone in our transition to a thriving health and wellness company. The acquisition synergies are expected to increase our revenue and customer base, allow us to leverage our key assets, optimize operations and processes, and drive long-term growth and shareholder value. Extract Labs is a stand-alone profitable business and our plan is to increase its existing revenue base and further leverage its existing capacity," shared Joseph Dowling, Chief Executive Officer of CV Sciences. "In addition, we are planning to in-source the manufacturing of select +PlusCBD branded products providing an opportunity for meaningful cost savings. Extract Labs manufacturing capability will provide us with greater control over our supply chain and accelerate our new product development cycle."
Key specifics of the acquisition include:
- The total consideration for the acquisition of Extract Labs payable at closing, consists of a cash payment of $400,000 (the "Closing Payment"), less the amount of certain holdbacks and adjustments
- The issuance of shares of CV Sciences' common stock valued at $1,000,000 based on the sixty day volume weighted average price ("VWAP") of CV Sciences' common stock
- Extract Labs sellers will be eligible to receive up to $600,000 of additional shares of CV Sciences' common stock if Extract Labs satisfies certain revenue targets during the two 12-month periods following the closing date
Additional details regarding the acquisition are available through the company's website.
