Does the Abacus Health Acquisition Make Charlotte's Web a Better Buy?
Merger and acquisition activity within the cannabis industry has been rare these days, especially as companies are focusing more on reducing costs than they are looking for ways to expand. However, some companies are still finding deals out there, including Charlotte's Web (OTC: CWBHF).
On March 23, the hemp producer announced it was going to acquire cannabis company Abacus Health in a move that would expand its reach with not only more product offerings, but also more locations. However, with Charlotte's Web already having a strong presence across the country and the Colorado-based business posting losses for three straight quarters, investors may be wondering if the move was a good idea. Let's take a closer look and see whether the acquisition of Abacus makes Charlotte's Web a better buy than before or a stock to avoid.
The all-stock deal implied a valuation of 99 million Canadian dollars ($68.2 million) on Abacus and didn't negatively impact Charlotte's Web's cash in the process. The deal was closed on June 11, at which point Charlotte's Web announced it had distribution in over 21,000 retail locations across the country.
Source Fool.com
