Mile High Labs to take over Sandoz pharma facility in Broomfield

BROOMFIELD — Mile High Labs, a CBD company that has been growing like a weed in recent months, has purchased the former Sandoz Inc. pharmaceutical manufacturing facility in Broomfield.

The company calls the roughly $18.8 million acquisition of the 400,000-square-foot campus at 2555 W. Midway Blvd. the largest infrastructure purchase in the history of the CBD market.

“This is a really big development for our company,” Steve Mueller, Mile High Labs founder and chief technology officer, told BizWest Thursday. “Less than three years ago I was the only person at the company working in a 1,500-square-foot lab and now we’ve just bought a big pharmaceutical plant. It’s pretty amazing.”

The Sandoz facility’s real estate, laboratories and manufacturing equipment are included in the sale.

Mile High Labs will make private label products including tinctures, capsules, tablets, topicals and gummies at the fully operational Broomfield facility.

This is a new part of the CBD business for Mile High Labs, which specialized in wholesale CBD isolate ingredient manufacturing rather than finished products.

“For us it was really good value to be able to buy the property because we will be able to reuse a lot of the infrastructure,” Mueller said. “That gives us the ability to really jumpstart this finished product business that we’re launching now.”

Products made at the facility will be “delivered direct to some of the biggest brands and global companies around,” he said.

Mile High Labs is gradually moving employees and equipment into the Broomfield facility while Sandoz, which is now leasing back space from the CBD firm, winds down operations.

“There are certainly some things we need to do in there to get things ramped up, but we think we can begin producing product before the end of the year,” Mueller said.

Eventually, Mile High Labs’ administrative employees will move into the Broomfield facility, which will serve as the company’s headquarters.

Sandoz, an affiliate of Swiss pharmaceutical giant Novartis, announced the closure of its Broomfield operation in early 2018. Since then, the company has laid off employees in several waves. The total number of layoffs was expected to be around 450.

Novartis cited double-digit price erosion from consolidation and increased competition in the U.S. generic drug market as reasons for the closure.

Mile High Labs currently employs about 150 employees. Mueller said the Broomfield facility purchase will allow the firm to hire about 100 more by the end of the year, including some former Sandoz workers.

“Our plan is to continue to grow the company,” Mueller said.

Mile High Labs, one of the largest CBD manufacturers in the world, has been on a fundraising tear of late. In April the company announced it had closed on a $65 million term-loan facility from investment group MGG Capital. “It provides cash flow enough to buy up the mountains of hemp being grown around the country,” the company said at the time.

That term-loan facility closure came on the heels of a October 2018 Series A funding round that raised $35 million.

Mile High Labs was founded in 2016 and initially operated a production facility in Longmont. The company moved to a larger Loveland location the following year. Increased demand for CBD following the passage of the 2018 Farm Bill caused the company to look for an even larger facility.

“When we moved to Loveland I was looking at a 20,000-square foot facility. I thought it was probably way too big for us, but I decided to pull the trigger anyway,” Mueller said. “About three months later I realized it was way too small.”

When searching for a new production facility, Mueller said Mile High Labs made it a priority to remain local.

“Colorado is definitely the center of the CBD universe, and we think this new facility will be the center of CBD in Colorado,” he said. “We want to be in the middle of the action.”

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