Redwood manufactures, markets and distributes hemp-derived cannabidiol (CBD) infused skincare and other consumer products online and through retail and hospitality partner channels in the United States under the brand, Lord Jones. Redwood’s products use pure hemp oil that contains natural phytocannabinoids and terpenes found in the plant.
Redwood was co-founded in 2017 by Robert Rosenheck and Cindy Capobianco. Following the close of the transaction, Rosenheck and Capobianco will join Cronos Group and continue to lead the development of the Redwood platform with the support of the current team, brand names and operating locations remaining in place.
“Rob and Cindy have built a differentiated, best-in-class platform with hemp-based CBD formulations that stand for quality and consistency. Our goal is to preserve the integrity of all Rob and Cindy have created, while also learning from them and leveraging Cronos Group’s resources to capitalize on the significant demand for skincare and other consumer products derived from hemp. Leading the industry forward responsibly and being a part of the conversation with industry stakeholders remains a top priority for Cronos Group in this evolving area,” said Mike Gorenstein, Cronos Group’s chairman, president and CEO.
“The inspiration for our company was simple, we wanted to create a brand we wished we could buy as adult consumers,” said Rosenheck. “We chose Cronos Group because they share our vision and values and will help us continue our mission. We are incredibly proud of our team and grateful to our customers who are responsible for our success. Cindy and I look forward to working with Cronos Group to further extend the love and enthusiasm for our products.”
Under the terms of the agreement, Cronos Group will acquire Redwood for approximately $300 million, net of Redwood’s estimated cash and debt and subject to a customary working capital adjustment as described in the agreement. $225 million of the total consideration (subject to the foregoing adjustments) will be paid in cash with the balance paid in newly issued Cronos Group common shares. Cronos Group will fund the cash portion of the transaction with cash on hand.
The transaction is expected to close in the third quarter of 2019, subject to customary closing conditions and regulatory approvals.