As CBD M&A Activity Soars, Indus Holdings Inc. Acquires Cannabis Beauty Brand Humble Flower Co.
In the latest example that the cannabis beauty segment is blazing, Indus Holdings Inc. has acquired THC and CBD topical brand Humble Flower Co.
The acquisition comes as cannabis beauty brands are jockeying for position in a crowded field. Well-heeled brands supported by a vertically-integrated infrastructure that can weather fluctuating supply and regulatory issues have strong potential to rise to the top. Last year, Indus revealed it amassed $46 million in series B funding and, according to financial filing on April 23, the company allotted roughly 10 million Canadian dollars or nearly $8 million for future acquisitions. Salinas, Calif.-based Indus started trading on the Canadian Stock Exchange on April 30. Terms of its deal with Humble Flower weren’t disclosed.
“The acquisition comes at the perfect time for us because we are growing and a company like Indus can help us reach a wider audience that can benefit from Humble Flower products,” says Thea Wayne, who founded Humble Flower with her Humboldt State University classmate Jordan Darian. “We’ve been doing it all as a two-woman operation and having Indus as a partner allows us to focus on what we do best—product development, branding and sales. With Indus’ support, we can grow faster and continue our path to becoming a household name and national brand.”
Humble Flower began three years ago with cannabis topical products and, six months ago, extended into CBD merchandise. Its THC products are Relief Balm, Muscle Balm, Body & Face Oil and Soothing Lotion in scented and unscented varieties, and its CBD products are Relief Balm, Body & Face Oil and Soothing Lotion, also in scented and unscented varieties. The products’ prices run from $49.50 to $60, and they are available at 50 dispensaries, and several spas and boutiques. Additional THC and CBD products are expected this year, and Humble Flower is in discussions to put its items in large retail chains.
“With Indus’ support, we can grow faster and continue our path to becoming a household name and national brand.”
“We are different from other brands in many ways. Our commitment to quality really sets us apart,” says Wayne. “We do not compromise on packaging or ingredients. We go the extra mile to be organic, vegan and cruelty-free with sustainable packaging. We thoughtfully design our products and ethically source all ingredients. We put a lot of care and effort into everything we do.”
Now, Humble Flower’s parent company sets it apart, too, in a CBD landscape littered with small brands with limited capital. Indus’ diverse array of cannabis business activities includes cultivation, extraction, manufacturing, sales, marketing and distribution. Among its owned and licensed brands specializing in everything from vape pens to cannabis beverages are Altai, Moon, Original Pot Co., Beboe, Orchid Essentials, Acme Elixirs, Dixie, TerpX, House Weed, Mirth Provisions and Flavor Extracts. For the nine months ended Sept. 30, 2018, Indus’ sales hit 10.95 million Canadian dollars or $8.1 million.
Asked about what Indus looks for in acquisitions, Robert Weakley, co-founder, director, president and CEO of Indus, and former CEO of Coastal Luxury Management, says, “People and brands that are able to bring something to a customer segment that is underserved or has just been discovered. Those of us in the industry already know the healing benefits of CBD. It’s a matter of identifying who this helps, taking that message to consumers, and building a broader platform to market that message.”
“Those of us in the industry already know the healing benefits of CBD. It’s a matter of identifying who this helps, taking that message to consumers, and building a broader platform to market that message.”
The CBD category is getting broader by the second. In a survey of 2,500 adults, Cowen & Co. discovered 6.9% use CBD. The firm estimates 10% of adults will use the non-psychoactive cannabis ingredient by 2025, when the CBD market is anticipated to be valued at $16 billion. Retailers are jumping into the CBD category with a vengeance. CVS, Walgreens, Neiman Marcus, Ulta Beauty, Sephora, Credo and Barneys New York are a few that have moved into the CBD arena.
As the CBD market grows, consolidation is percolating through it. Last month, American Premium Water Corp. bought nascent CBD pain relief player Plant + Body Essentials, and iAnthus Capital Holdings picked up CBD For Life, a leading brand with a presence in 750 stores across the United States. In December, Level Brands Inc. purchased Cure Based Development, the company behind the brand cbdMD, which is available in some 700 retail locations.
No doubt, almost five-year-old Indus will remain an active participant in the M&A scene. Weakley says, “We’re a forward-thinking company, and we’ve always been on the lookout for the next hill to conquer.”