22nd Century Acquires Manufacturer GVB Biopharma
22nd Century Group has acquired GVB Biopharma. As a contract development and manufacturing organization, GVB is believed to be one of the largest providers of hemp-derived active ingredients for the pharmaceutical and consumer goods industries worldwide based on total tonnage.
GVB’s strengths complement 22nd Century’s existing upstream and downstream value chains, which includes expertise in cannabinoid receptor science with CannaMetrix, plant research and proprietary genetics through its KeyGene partnership, breeding expertise with Extractas, and cultivation capabilities at Needle Rock Farms.
GVB expects 2022 revenue of approximately $48 million, a 58 percent increase year-over-year, gross margin in excess of 44 percent and positive cash flow. Upon closing, the transaction is expected to more than double 22nd Century’s revenue, be immediately accretive to adjusted EBITDA, and generate positive cash flow from the acquired assets in the near term.
“GVB represents a transformational acquisition for 22nd Century that will enable us to rapidly grow our hemp/cannabis franchise,” said James A. Mish, chief executive officer of 22nd Century Group, in a statement.
“GVB is one of the largest CBD suppliers globally, possessing innovative, vertically integrated cannabinoid product manufacturing technologies driving industry leading scale and cost efficiency. In addition to immediately expanding our hemp/cannabis franchise capabilities, GVB represents an opportunity to double our revenue and internalize a comprehensive contract manufacturing and extraction platform which can be used to directly and exclusively monetize our differentiated and proprietary hemp/cannabis plant genetics and intellectual property. We are enthusiastic to begin working with the highly regarded and very experienced management team at GVB.”
“We are excited to combine with 22nd Century group, pairing our production and manufacturing capabilities together with the best hemp/cannabis plant science in the world,” said Phillip Swindells, chief executive officer at GVB. “Since 2017, we have built a loyal customer base and continue to add new, rapidly growing customers as demand in our industry accelerates. We sold more than five billion doses of CBD in 2021, and we look forward to further scaling our business as a part of 22nd Century’s comprehensive platform.”
GVB operates three U.S. manufacturing facilities in Oregon and Nevada, including a 30,000-square-feet hemp ingredient manufacturing facility in Central Oregon, a 40,000 square-feet white-label, finished product manufacturing facility in Las Vegas, and an industrial-scale hemp extraction facility in Prineville, Oregon.
