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International Tobacco Company Moves Into CBD Oil

CBD OilAlliance One International, a global contractor, processor and supplier of tobacco, is jumping into the legal cannabis and CBD Oil businesses.

The company announced last week it was taking controlling stakes in Canada’s Island Garden, a licensed cannabis company, and Goldleaf Pharm, which has applied for a Canadian license.

Alliance One also said it was also buying a 40 percent stake in Criticality, a North Carolina company participating in a pilot program to extract CBD Oil from industrial hemp as part of a state pilot program. Alliance One has the option to increase ownership in that company to 50 percent in March 2020.

According to North Carolina Business News Wire:

The Morrisville, North Carolina-based company believes these new products generally have higher margin potential than their core business and will play well to the company’s strengths.

“We intend to broaden our business portfolio over the next three to four years by focusing on consumer-driven agricultural products, with increased operating margins when compared to our historical leaf processing business,” said CEO Peter Sikkel in a statement. “Consistent with our commitment to growth and incremental to our core leaf earnings, our goal is to generate a significantly increasing portion of our profit from new, higher-margin businesses by 2020.”

Alliance One’s shares rose $3.70 to $16.80 in premarket trading on Friday morning.

January 2018, Alliance One subsidiary Canadian Cultivated Products Ltd. acquired a 75 percent stake in Canada’s Island Garden Inc. and an 80 percent stake in Goldleaf Pharm Inc.

Island Garden is one of only 35 companies fully licensed to produce and sell medicinal cannabis in Canada and has a 20,000-square-foot indoor growing facility in Charlottetown, Prince Edward Island

Goldleaf is currently completing construction of a 20,000-square-foot indoor growing facility with further expansion planned for an additional 710,000 square feet of production over a three-year period.

The investment in Canadian companies makes Alliance One International the second publicly-traded U.S. firm to bet on Canada’s legal cannabis market. Last year, Constellation Brands spent C$245 million on Canopy Growth.

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