By Chloe Aiello

Another Canadian marijuana giant is planning big moves in U.S. hemp through the acquisition of a Canadian health food company.

Tilray ($TLRY) announced this week it would buy Manitoba Harvest for about $318 million. Manitoba Harvest is perhaps best known for its hemp hearts and hemp oil, which the company sells online and in-store at more than 16,000 locations across North America. Its partners include major retailers, like Walmart ($WMRT), Costco ($COST), and Whole Foods.

The arrangement offers perks for both Manitoba, which aims to move from hemp foods into hemp extracts and CBD, and for Tilray, which wants a foothold in the U.S.' burgeoning hemp industry.

"Our mission and our purpose ... it's to help people transform their lives with the power of hemp. For the last 20 years, we've been doing this through the highest quality hemp food," Manitoba Harvest CEO Bill Chiasson told Cheddar. "We are looking at ... bringing to market a broad spectrum hemp extract that contains CBD into the market as well."

Chiasson said he knows his company's distribution network was a major impetus for the acquisition, which will give Tilray access to its vast distribution network, as well as a foothold in the health food industry. In exchange, Manitoba will have access to Tilray's operations expertise as it makes its first push into CBD-containing broad spectrum hemp extract this summer.

Tilray is just the latest Canadian cannabis giant to dip its toes in the U.S. hemp market, following the December passage of the Farm Bill, which legalized hemp as an industrial commodity. Canopy Growth ($CGC) in January announced it would invest up to $150 million to create a hemp hub in upstate New York. Aurora Cannabis ($ACB) also has plans to infiltrate the burgeoning U.S. hemp market.

All this momentum doesn't come without risk. Although the Farm Bill legalized hemp and its compounds, the Food and Drug Administration has prohibited the sale of these products as dietary supplements. Some cities, like New York, have taken that as a green light to start cracking down on CBD-infused edibles, beverages, and more.

Chiasson said Manitoba and Tilray are well acquainted with potential landmines that guard entry to the CBD market at such a delicate regulatory moment. That, in part, is why Manitoba is avoiding a CBD-specific product come summer.

"We are bringing the full spectrum hemp extract in there. So it has other cannabinoids in there, it has terpenes in there, and a lot of consumers would come back to us and say they are looking at something where they can have that broad entourage effect," Chiasson said.

But long term, Chiasson said he doesn't see regulatory hurdles posing a significant problem, and the company is prepared to "aggressively pursue" the CBD market.

For full interview click here.