Mile High Labs acquired a 400,000 square foot pharmaceutical manufacturing facility of Sandoz Inc., a division of Novartis (Switzerland), in Broomfield, Colorado, with a view to meet the rising global consumer demand for CBD (Cannabidiol) in the form of tinctures, lotions, and gummies.
MarketsandMarkets™ View Point:
Mile High Labs is one of the largest CBD manufacturers; it provides bulk CBD to the world’s Consumer Packaged Goods (CPG) brands. The acquisition of this manufacturing facility would help Mile High Labs to establish a global center for advanced training, research, and production of CBD-based products. After the legalization of hemp production in the US, there has been a surge in demand for hemp-based products. Furthermore, the increased awareness among consumers about the health benefits of CBD has been propelling its market growth. This large production facility with advanced extraction technology would provide high-quality and consistent CBD to all the consumers. However, the stringent regulation on the use of CBD hemp products in different countries is the major hurdle for the growth of CBD – said Swati Singh (Senior Research Associate at MarketsandMarkets™)
Impact of Acquisition:
Mile High Labs provides CBD isolates, THC-free distillates, water-soluble liquids, and bulk tinctures to other industries. It has an extensive network of hemp cultivators for the processing of CBD extract. Currently, it has a presence in the US, the UK, and Asia Pacific, and this new production facility would surely facilitate the global supply of CBD. The Colorado Department of Agriculture has launched a Colorado Hemp Advancement and Management Plan (CHAMP) to support and promote the growth of the hemp industry, which supports the aim of Mile High Labs to provide a global center for CBD extraction in Colorado. The demand for CBD hemp products has been increasing rapidly, and manufacturers across the world are well-positioned to be the successful early movers and leaders in the rising era of CBD growth, which would bring other global players into this market, thereby increasing competition. Based on recent legislative developments, the demand for its products has increased considerably on a global scale. With this recent acquisition, the company would be able to provide a high-quality and consistent CBD supply to its consumers – said Mr. Amarnath Rajendran, (Associate Manager- Food, Beverage, Animal Nutrition, and Agriculture at MarketsandMarkets™)
The figure given below showcases the current market opportunity in the industrial hemp market. The increasing legalization for the cultivation of industrial hemp and increased usage of hemp seed and CBD hemp oils in different industries are the major drivers of this market.
FIGURE 1 INDUSTRIAL HEMP MARKET SIZE, 2019 VS. 2025 (USD BILLION)
e – Estimated; p – Projected
Source: Related Research Publications, Government Publications, Company Press Releases, Company Annual Reports, Company Websites, Company Publications, and MarketsandMarkets™ Analysis
Impact on Top Competitors:
Some of the major competitors in the industrial hemp market include Hempco (Canada), Ecofibre (Australia), Hemp Inc. (US), GenCanna (US), HempFlax BV (Netherlands), Konoplex Group (Russia), Hemp Oil Canada (Canada), BAFA (Germany), Hemp Poland (Poland), Dun Agro (Netherlands), Colorado Hemp Works (US), Canah International (Romania), South Hemp Tecno (Italy), Plains Industrial Hemp Processing (Canada), and MH Medical Hemp (Germany). This acquisition would help the company gain a larger market share of CBD hemp-based products. The company closed an investment of more than USD 100 million in the previous year from a series of funding, which would be used for the expansion of production facilities. Mile High Labs industrial-scale laboratories are trusted by global players for the quality and consistency of CBD, which could offer significant competition to the other players in the industry.
The acquisition of the pharmaceutical processing facility in Colorado would aid the growth of Mile High Labs as one of the leading producers of CBD hemp products; it will also widen its footprint globally. The growing demand for CBD hemp oil, for the treatment and prevention of conditions like anxiety, depression, pain, and acne has resulted in increased usage of CBD in pharmaceutical products. Furthermore, its growing application in personal care products, health supplements, and in food & beverages is expected to drive the market for CBD. Thus, the acquisition of the facility at this time would help the company to capture the growing consumer needs and generate significant revenue.