New London-based CBD vehicle Tenacious Labs launched with a US acquisition today, joining the race for brands and product launches as the cannabinoid space heats up on both sides of the Atlantic.
CBD stands for cannabidiol - the non-psychoative compound in cannabis plants. It is used medicinally to treat conditions including insomnia. Bank of America Merrill Lynch has estimated its global consumer market is set to reach a value of around $39 billion by 2032.
Tenacious Labs, which is set to bring its first brands to market in the UK this summer, announced on Tuesday that it has bought Denver-based female wellbeing CBD product-maker, Press Pause.
Press Pause makes CBD capsules, bath bombs and balms. Its acquisition gives the company an established direct-to-consumer brand in the US, and it is to shortly launch the brand’s products in the UK. Tenacious Labs said that the move will "ignite its buy-and-build strategy to become the leading global consumer cannabinoids brand".
The company plans to launch other products this summer, including Walker & Morland, a CBD brand created to help those who suffer from chronic pain and anxiety; and Hoo Raa, a CBD product aimed at those looking to manage mood swings.
Tenacious Labs is owned by search fund Delarki, which has committed £9.5 million of investment to date into the company to “support its buy and build strategy”.
The business is headed up by chief executive Nicholas Morland and chief commercial officer Adrian Clarke, who is the chairman of Delarki.
Morland said: "Our first acquisition, this is a major milestone in our strategy of building and developing a global portfolio of consumer cannabinoid brands. It brings an established US brand to the UK as the market enters its next phase of growth and consolidation.
"Tenacious Labs is incredibly ambitious and we are working hard to identify and integrate exciting and emerging brands within the sector. We have a pipeline of acquisition opportunities ahead of us, and expect to announce further developments in the near future.”
The cannabinoid market has been heating up in recent months.
GW Pharmaceuticals, the Cambridge-based medicinal cannabis pioneer behind epilepsy treatment Epidolex, was snapped up by rival healthcare group Jazz in a £5.3billion deal.
Last month a David Beckham-backed firm, Cellular Goods, floated on the London Stock Exchange and saw its stock shoot up by 310% within 15 minutes of market open. The company makes ports pain relief and skincare products, and unlike other offerings its CBD is entirely synthetic, manufactured in laboratories.
Cellular Goods was the latest in a string of companies in the cannabis space to go public following a ruling by regulator the Financial Conduct Authority to allow such businesses to list on the main exchange.
MCG Pharma, which makes a cannabis-based treatment for epilepsy, and Israel-based firm Kanabo, which makes a vaping pen to dispense regulated doses of medical-grade cannabis extract for pain and sleep disorders, both floated in London in February.
Kanabo saw its share price triple in value on the first day of trading. Founder and CEO Avihu Tamir, 40, a former staffer for Accenture who launched the firm in 2016, has told the Standard that "there is a huge opportunity waiting to be seized for London to become a leader in medical cannabis in Europe".
Like Tenacious Labs, other smaller London-headquarted companies are currently raising money for acquisitions and CBD product launches in the UK.
South West Brands, an all-female led firm that says it is on a mission to become “The Hut Group of cannabis” is looking to raise another £5-£10 million for acquisitions and expansion after raising around £1 million from angels and institutional investors in January.
The company is headed up by former City banker Rebekah Hall, who launched Europe’s first CBD-infused soft drink, Botanic Lab, back in 2015. The drinks are now stocked in Waitrose and Harrods.