Benzinga | Sep 22, 2021 10:18AM EDT

Grove's Acquisitions Fueling Company's Growth

Since its initial public offering (IPO) in June, Grove Inc. (NASDAQ:GRVI) has embarked on a journey that will establish it as a leading manufacturer of hemp-derived CBD-based products as well as nutritional supplements.

Grove, a Henderson, Nevada-based company, offered 2.2 million shares at $5 per share to raise about $11 million in its IPO. It used the proceeds to acquire VitaMedica, an online seller of nutritional supplements.

The acquisition will give Grove access to the global nutraceuticals market, which is expected to reach $441.7 billion by 2026, according to a market study by Global Industry Analytics.

So how does Grove stack up against other publicly traded CBD companies?

While its revenue figures aren't as high as market leader Charlotte's Web (TSX:CWEB) (OTCQX:CWBHF), it's growing much more rapidly -- likely because Charlotte's Web has been in the market far longer.

Founded in 2011, Charlotte's Web garnered national attention after Paige Figi contacted the Colorado-based Stanley brothers (Joel, Jesse, Jared, Josh, Jordan, Jon and Austin) looking for a nonintoxicating, natural alternative for her 5-year-old daughter, Charlotte.

Charlotte, who suffered a rare and debilitating form of epilepsy known as Dravet syndrome, helped popularize the use of CBD to treat epilepsy. She died last year at age 13.

VitaMedica is expected to contribute to Grove's recently announced expectations that 4th-quarter revenue would rise to $10.4 million -- a 300% increase over the same period in 2020. Its full-year revenue is expected to reach $23.9 million -- a 200% increase over the previous year.

By comparison, Charlotte's Web revenue increased 11.4% to $24.2 million in the 2nd quarter, up from $21.7 million during the same period in 2020.

Other well-known publicly traded CBD-focused companies include:

* Jazz Pharmaceuticals plc (NASDAQ:JAZZ)

* Tilray Inc. (NASDAQ:TLRY)

* GrowGeneration Corp. (NASDAQ:GRWG)

* Cara Therapeutics Inc. (NASDAQ:CARA)

Grove's goal is "to transform the landscape of how hemp and vitamins are produced, bought and sold, with each of our brands curated for individual consumer needs," according to the company's website.

Grove is looking to acquire other companies that will help it achieve its goal to become an online marketplace for CBD products. It recently announced it plans to buy Boca Raton, Florida-based Interactive Offers, which provides programmatic advertising with its software as a service (SaaS) platform that allows for automatic ad placement on any partners' site from a simple dashboard.

The acquisition is expected to significantly improve Grove's product sales and CBD brand businesses -- in addition to providing a profitable, stand-alone technology division and in-house ad service.

"Interactive Offers has a brilliant platform, development team and management," Grove CEO Allan Marshall said. "When it comes to SaaS, they check every box, creating a streamlined process for advertisers and publishers alike. The technology is set up and designed for ease of use and efficiencies in deliverability and reporting across email, native ads and display."

It also has partnered with Alfi (NASDAQ:ALF) to leverage its artificial intelligence enterprise SaaS platform to launch Grove's biggest advertising campaign to date. The platform is expected to help Grove reach a larger audience while delivering better targeting and increased engagement.

Grove, which extracts its CBD from hemp, manufactures a line of plant-based products that focuses on sustainability and customer satisfaction. Hemp is a cannabis plant but it's different from marijuana in that it cannot contain more than 0.3% of THC -- the compound in the plant that's associated with getting people who use it high.

Grove's CBD-infused brands include Zest oil, gummies and tinctures that give consumers the ability to shop by effect; CBD Infusionz lotions, tinctures, gummies, coffee and pet products; and GRN gummies, tinctures and lotions.

Photo by Benjamin Brunner on Unsplash