The deal includes a two-step merger-for-merger consideration of 15,525,000 shares of Level Brand’s common stock, with an earnout potential of up to an additional 15,525,000 shares if net revenue targets that total $300 million are met within 60 months of the closing date.

The merger is subject to customary conditions as well as the passage of the Agricultural and Nutrition Act of 2018, commonly referred to as the 2018 Farm Bill, and similar legislation in the U.S., which when approved, will declassify cannabidiol as a controlled substance under federal law. North Carolina-based Cure Based Development was founded in August 2017 and currently offers gummies, tinctures, topical, bath bombs, oils and pet products containing cannabidiol. The brand operates an e-commerce site and its products are distributed at 700 stores in 40 states.

“With the passage of the 2018 Farm Bill, CBD will no longer be listed as a Schedule 1 controlled substance, which we believe will open the access to national retailers for CBD consumer products,” says Martin A. Sumichrast, chairman and chief executive officer, Level Brands. “We believe that the next three-to-five years will produce a few leading CBD brands, and our goal is to be the leader in the space.”

Following the closing, Cure Based Development will operate under the Level Brands umbrella. Scott Coffman, the chief executive officer of Cure Based Development, and Caryn Dunayer, its president, will continue in similar positions within the cbdMD LLC subsidiary. Following the closing, Coffman will also join Level Brands’ board of directors. Coffman founded Ecig Company Blu in 2009.