By Chloe Aiello
Green Growth Brands has no plans to stop its takeover bid for Canadian marijuana producer Aphria. Just days after the marijuana-derived beauty and wellness company announced it will sell its products at select DSW shoe stores nationwide, Green Growth CEO Peter Horvath said the company is dead set on getting a foothold in the Canadian market ー because in cannabis, consolidation is the new rule.
"Welcome to cannabis. It's all about acquisition, and M&A, and consolidation," Horvath told Cheddar on Monday. "Consolidation is imminent. Everyone's been talking about it for years in this industry, and we will be part of it."
Green Growth Brands ($GGB) is a Columbus, Ohio-based beauty and wellness brands company with big ambitions. The company looks to capitalize on its team's decades of experience with retail brands, like American Eagle Outfitters ($AEO), DSW ($DSW), and Victoria's Secret ($LB), to build consumer packaged goods cannabis brands. In November, the company went public on the CSE through a merger with Xanthic Biopharma.
Late last month, Green Growth began its pursuit of Aphria. Aphria rejected an initial $2.1 billion bid in late December, saying it undervalued the company, Bloomberg reported. But Horvath said the company isn't ready to give up on the Canadian market access and cultivation capabilities Aphria has to offer.
"We are getting ready to formally file our bid. We are looking for opportunities to connect with management, because obviously the best way to combine businesses and leverage the benefits both sides could bring is to have a friendly bid. But right now I think we are moving forward, so we'll see how it goes," Horvath said.
His comments come on the heels of news Green Growth will sell its CBD products in 96 DSW stores nationwide. The decision followed a successful test launch in 10 DSW shoe stores late last year.
Horvath attributed the initial deal to Green Growth's connections to DSW ー the Schottenstein family, which owns DSW, invested in Green Growth Brands, and Horvath previously served as president of the company. He acknowledged that the success of the the partnership appeared unlikely ーuntil the product started selling.
"Look, we are putting product that goes on your face and body in a shoe store ー doesn't make much sense. The reality is this product that we put in the store in the test ... it outperformed our expectations by three times," Horvath said. "I think both the management at DSW, as well as us, we wanted to jump on it and move fast. I'd say it's an accident that we're there, but it's going to be a happy accident."
Green Growth Brands would like to see its products expand beyond its initial 96-store DSW agreement. The company is also planning to disseminate its products to as many as 300 mall kiosks nationwide by the end of 2019.
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