Hemp food giant Manitoba Harvest to be acquired by Tilray, plans summer launch of broad spectrum hemp extracts with CBD

Best known for its hemp hearts, oil, protein powders, milks and granola, which are sold in 16,000 stores across the US and Canada, Manitoba Harvest​​ also has plans to launch a line of CBD containing broad spectrum hemp extracts and a line of bars under its Hemp Yeah! Brand, CEO Bill Chiasson told FoodNavigator-USA.

"Our purpose is to transform people's lives through the power of hemp, and for the last year or so we've been building the capability to launch a line of broad spectrum hemp extracts containing CBD this summer, and Tilray's tech know-how with cannabinoids will definitely help us develop that business. Tilray has a wealth of experience we can tap into.​

"We'll start with tinctures and sprays containing MCT oil and hemp extract, and softgels featuring hempseed oil and hemp extract."​

Asked about the legal issues surrounding CBD (cannabidiol), which the FDA says is not a legal food/supplement ingredient because it was first investigated as a drug, he said that the company had deliberately steered clear of CBD isolates for this reason, but also because its consumers say they want a broad spectrum extract.

"Our consumers tell us that they like the entourage effect of a broad spectrum extract which includes terpenes, but we will actually call out the CBD part of it on the label."​

What does CBD actually do for you?

So what claims, if any, will Manitoba Harvest make on pack about its hemp extracts?

None at all, stressed Chiasson, "We'll tell the consumer exactly what we are providing them, and we'll let the consumer decide whether that is what they need."​

Asked whether the hype had got ahead of the science when it comes to CBD, he said: "More work needs to be done, but we're focused on providing the highest quality, well understood, simple to use products possible."​

'The closer we can get to form factors that people are familiar with, hemp will be easier for people to consume'

As for the hemp food business, he said, "All parts of the business are showing growth. There is a hemp mania going on in the US as more people become aware of the density of nutrition in hemp seeds. We'll be introducing a hemp wellness bar nationally this summer and we're exploring opportunities to expand our hemp milk ​[which is currently only available in Canada] as well.​

"The granola, the bars, and the milk substitute provide more opportunities for people to enjoy hemp that maybe don't know what to do with hemp hearts. The closer we can get to form factors that people are familiar with, hemp will be easier for people to consume."​

“Tilray is a pioneering cannabis company, and we are acquiring Manitoba Harvest, the world’s largest hemp food manufacturer and a leader in the natural foods industry. In short, we’re combining critical expertise in a rapid-growth space. Those of us that have recognized the power of cannabis and hemp to transform consumer health for ages are enthusiastic about this evolution. After years of hard work, we’re seeing accelerated legitimization of the plant in which we so firmly believe.​

“Partnering with established leaders such as Manitoba Harvest will help us get closer to a world that fully accepts what we already know: there are nutritional benefits of hemp and CBD.”​

Brendan Kennedy, president and CEO, Tilray​

The deal

The acquisition – expected to close in 30 days – will expand Tilray’s product portfolio into the natural foods category, while Manitoba Harvest will benefit from Tilray’s expertise in working with cannabinoids, including cannabidiol (CBD), said Tilray in a press release. The senior management team at Manitoba Harvest will stay on.

“By leveraging Manitoba Harvest’s established distribution network, Tilray plans to accelerate its expansion into the US and Canadian markets, where legal, for CBD products. Manitoba Harvest also brings to Tilray an experienced team and manufacturing capabilities, including the addition of two high quality BRC AA+ certified manufacturing facilities as well as significant sales and distribution capabilities.”​

*Tilray​​ will pay C$277.5m at closing, comprising C$150m in cash and C$127.5m in Tilray shares. Six months after closing, Tilray will pay C$92.5m, comprising C$50m in cash and C$42.5m in Tilray shares. Tilray will issue an additional C$49m in Tilray Shares based on Manitoba Harvest achieving certain performance milestones in 2019, such amount to be reduced to the extent that some or all of the milestones are not achieved.