Canadian marijuana operator purchases Green Roads CBD to enter US market

The Valens Co., a Canadian marijuana product manufacturer, announced Tuesday that it will acquire Florida hemp-CBD manufacturer Green Roads CBD.

The deal includes $40 million up front, including $25.4 million in Valens Co. common shares and up to $14.6 million in cash, plus up to an additional $20 million in earnout payments if earnings goals are met after the transaction.

A privately owned hemp-derived CBD company co-founded by Laura Fuentes and Arby Barroso, 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.

With its acquisition of Green Roads, Valens enters the U.S. market and strengthens its capabilities to supply products in global markets with its expanded product offering, Valens CEO Tyler Robson said in a statement.

Based in Kelowna, British Columbia, Valens expects the acquisition will be profitable for the organization 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.