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HempFusion

HempFusion Wellness Inc. (TSX:CBD.U) (US:CBDHF) (FWB:8OO) (“HempFusion” or the “Company”), a leading health and wellness Company offering premium probiotic supplements and products containing.

CBD, is pleased to announce it has entered into a Purchase Agreement (as defined below) to acquire 100% interest in APCNA Holdings LLC (“Apothecanna”). Established in 2009, Apothecanna pioneered cannabis-powered body care and topicals, and was the first topicals brand to expand nationally and obtain a Federal Trademark. Focused on the premium recovery, pharmacy, and spa segments, Apothecanna has established itself as an industry leader in the development of innovative, all-natural CBD products.

Apothecanna is an established brand in the premium CBD topicals space with significant distribution in the North American market, most notably though CVS and 7th Sense. The company also has access to the Canadian marketplace though a strategic business relationship, giving it significant market share in the Canadian topicals space (#1 topical in 2020 on the OCS).

A key advantage in the current business environment is a strong ecommerce focus and Apothecanna embodies this with approximately 50% of revenues being generated from this channel. The focus on this higher margin, Direct-to-Consumer business drives corporate gross profit margins of approximately 70%.

Strategic Rationale

Revenue of over $4 million in 2020 doubles HempFusion’s historical revenue with significant expansion planned for 2021 and beyond, making it immediately Immediate distribution to an additional 1,800 stores, including CVS, materially increases HempFusion’s retail distribution footprint.
In addition to FDM and e-commerce, this transaction provides added distribution channels, increasing HempFusion’s 5 channel strategy to 6 channels, and bolstering topical product distribution sales.
Robust eCommerce platform drives over 17,000 average monthly sessions, and nearly $2.0MM in gross sales per year with 76% gross margin historically.
Product efficiencies across topicals line while providing a near term opportunity for expansion into ingestible products supported by HempFusion’s proprietary HempFusion’s substantial investment into regulatory compliance will help solidify Apothecanna’s leadership position in the CBD industry.

“We are incredibly excited to enter into this agreement with Apothecanna, which, on closing, will have an immediate impact on HempFusion’s revenue while significantly bolstering our distribution and eCommerce platforms,” stated Jason Mitchell, N.D., HempFusion’s Co-Founder and Chief Executive Officer. “We look forward to working to close the transaction as soon as possible,” continued Dr. Mitchell.

“Quality, customer centricity, and innovation have always been core pillars of Apothecanna’s strategy since our founding almost twelve years ago,” said Jeff Henretig, President of Apothecanna. “In HempFusion, we found a partner that has a similar and complimentary focus, with the capabilities to bring Apothecanna into more doors and homes across both the US and abroad. We look forward to joining the HempFusion family and empowering even more people to live healthier lives. We are deeply thankful to our founding team for getting us to this stage.”




Company Name: HempFusion
About Company: HempFusion is a leading health and wellness CBD company utilizing the power of whole-food hemp nutrition. HempFusion distributes its family of brands, including HempFusion, Probulin Probiotics, Biome Research, and HF Labs, to approximately 4,000 retail locations across all 50 states of the United States and select international locations. Built on a foundation of regulatory compliance and human safety, HempFusion’s diverse product portfolio comprises 48 SKUs including tinctures, proprietary FDA Drug Listed Over-The-Counter (OTC) Topicals, Doctor/Practitioner Lines and more. With a strong focus on research and development, HempFusion has an additional 30 products under development. HempFusion is a board member of the US Hemp Roundtable, and HempFusion’s wholly-owned subsidiary, Probulin Probiotics, is one of the fastest-growing probiotics companies in the United States, according to SPINs reported data. HempFusion’s CBD products are based on a proprietary Whole Food Hemp Complex™
Person of Contact: Jason Mitchell, N.D.
Designation: Chief Executive Officer and Director

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