Canadian firm buys hemp operator CFH Ltd. for $14M

LONGMONT — Vancouver, Canada-based Simply Better Brands Corp. (TSX Venture: SBBC) has inked a letter of intent to acquire Longmont hemp research, extractor and manufacturer CFH Ltd. in a stock deal worth $14.3 million. 

When founder Jim Ott launched CFH nearly a decade ago, “our whole mission was to create products that really help people with their health,” he told BizWest in late 2021 when CFH launched a beverage line. “So from there we worked backward to create a really vertically integrated company.”

Ott and his team “started to do a bunch of R&D on the genetics side and on crop production” and eventually built a farm and research facility near Denver International Airport. The company’s administration, manufacturing, packaging and warehousing functions are performed in Longmont where most members of the team of about 35 work. 

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The company makes tinctures, topicals, softgels and gummies that are sold both as private label and CFH-branded products.

SBBC has its own line of CBD products called PureKana and the company hopes the CFH acquisition will help nurture that growing brand. 

The first quarter of this year, “the PureKana brand grew over 300% versus [the same period a] year ago,” SBBC CEO Kathy Casey said in a prepared statement. “To support this growth, it is critical we enhance our research and manufacturing capability. As we looked to expand, we were so impressed with CFH’s team and capability. Its commitment to quality, proprietary research, and mission to improve the quality of people’s lives is synonymous with our journey. We are excited to collaborate on next generation wellness together.”

According to financial documents, CFH had about $6.9 million in sales last year.

In March, SBBC issued guidance indicating that revenues for 2022 are expected to be between $32 million and $35 million, a roughly 200% increase over 2021 sales. 

“SBBC has demonstrated tremendous marketing expertise and sales growth with its diversified growth portfolio of health and wellness brands. Its mission of enhancing the health and well-being of its loyal consumers is completely aligned with CFH’s values,” Ott said in a prepared statement. “There are numerous synergies and efficiencies that will come from utilizing CFH’s science expertise and vertical supply. The partnership will provide significant industry and revenue diversification for all shareholders of CFH. I could not be more pleased to become part of the SBBC family of companies and the exciting growth strategies it has in place.”