Non-prescription sleep aid Dream Water has been acquired by Vancouver, Canada-based cannabis company Harvest One for approximately $26.7 million (C$34.5 million).
The agreement, upon closing, will consolidate Dream Water USA and Dream Water Canada, which is the exclusive licensee in that country, into a single wholly owned subsidiary of Harvest One called Dream Water Global that will control worldwide rights and intellectual property for the brand. Dream Water USA CEO David Lekach will serve as president of the new company, while Dream Water Canada CEO Stephen Dick will be CEO.
“We are thoroughly impressed with what [Harvest One CEO] Andreas Gedeon and the whole Harvest One team have built to date,” said Dream Water USA CEO David Lekach in a press release. “As the go-forward steward of the Dream Water proposition, Harvest One will help the brand reach its full potential.”
Speaking with BevNET, Dick framed the acquisition as a global innovation play that will allow Dream Water to take advantage of synergies in the commercial cannabis and sleep aid markets. Specifically, Dick said that Dream Water will develop product lines that include cannabidiol (CBD), a non-psychoactive compound found in the cannabis plant which has a variety of purported health benefits, such as pain relief and anti-anxiety.
“We are in the sleep business, and we’ve known for some time that cannabis and cannabidiol [CBD] are going to be part of sleep remedies from now into the future,” he said.
For Harvest One, the acquisition of Dream Water will provide it with experience in marketing, distribution and product development of consumer goods that will complement the other companies in its vertically integrated portfolio. The company also owns United Greeneries, a cannabis cultivation company, and Swiss brand Satipharm, which manufactures, markets and distributes medical and pharmaceutical cannabis products.
“I think it’s a very smart strategic play from Harvest One’s perspective to acquire a brand that has 30,000-plus retail doors and is in the sleep category, which is one of the top four verticals that these cannabis companies are looking to exploit from a revenue perspective,” Dick said.
In its 2 oz. ready-to-drink liquid product, Dream Water contains a combination of the natural ingredients melatonin, gaba and tryptophan. Dick said future CBD-centric SKUs will likely have a premium price point, but that non-CBD-infused formulations will still be available. Dream Water also markets a non-RTD powdered product and Dream Water Beauty, a liquid shot SKU which contains collagen and other nutrients for skin care.
Canadian law prevents publicly traded companies, such as Harvest One, from selling cannabis-based products outside of the country, meaning Canada will likely serve as the main proving ground for new innovations within that segment. The country is set to fully legalize cannabis by this fall.
Ian Baillie, VP of corporate communications for Harvest One, said the company would look to establish a presence in its home market while also expanding to other countries in which medical and/or recreational marijuana use is lawful, such as Germany, Israel, Uruguay and Brazil.
“Innovation is at play within the cannabis market and what you are seeing here is the beginning of that,” he said.