Creso Pharma is entering the US CBD market by acquiring Sierra Sage Herbs (SSH) in an all-scrip deal worth US$21m upfront, subject to shareholder approval.
Founded in 2008, SSH is a consumer packaged goods company focused on plant-based and CBD products under the Green Goo, Southern Butter and Goodgoo brands. It services the CBD, first aid, beauty, sexual wellness, women’s health and pet categories and has more than 90,000 distribution points and 150,000 customers across the US.
SSH grew sales from $4.7m in CY18 to more than $8m in CY20. Although revenue fell back to $5.7m in CY21, Creso said it has “a favourable outlook on CY22 sales”. It has agreed future milestone payments subject to SSH achieving sales of up to $10m in CY22 and up to $20m in CY23.
The company’s co-founder and CEO Jodi Scott will join the Creso board as executive director and president of US operations.
Creso said it plans to launch its existing CBD products through SSH’s established channels in the US as well as entering the functional mushroom sector, a market anticipated to be worth $19.3bn by 2030.
Group CEO and managing director William Lay described the acquisition as a major milestone for the company, marking its entry into the US CBD market.
He said SSH had relationships with key retailers and a large direct-to-consumer base which Creso plans to “aggressively leverage… by introducing them to [our] existing product suite for human health, animal health and sports and recovery”.
SSH CEO and co-founder Jodi Scott added: “This partnership with Creso will set the stage for accelerated growth across multiple categories. Together, we will be able to expand portfolios and make synergistic acquisitions in even more meaningful ways.”
