Cronos paid $300M for Lord Jones' parent, then shut down its US CBD business

Lord Jones, the CBD skincare and lifestyle brand owned by cannabis company Cronos Group, announced in June 2023 that it was leaving the United States. In a farewell Instagram post — 'some say the grass is greener on the other side' — the brand said it was moving to Canada and would relaunch there as an adult-use cannabis brand in the fourth quarter of 2023. Its US website ran a 75%-off clearance sale until June 23.

The parent had announced days earlier that it would exit its existing US CBD operations by the end of the second quarter. Chairman, president and CEO Mike Gorenstein said the decision was made to 'improve its cash flow in the near term' and position Cronos to enter the US THC market directly 'when the necessary changes in U.S. regulatory conditions occur' — while still saying he believes the US will one day be one of the most important cannabis markets in the world.

The exit closed out a four-year bet. Cronos agreed in 2019 to buy Redwood, Lord Jones' parent company, for about $300 million, and in 2020 launched the cheaper CBD skincare line Happy Dance with actress Kristen Bell. Happy Dance shut its own e-commerce in January 2023, going wholesale-only while supplies last and directing customers to sister brand Lord Jones — which within months followed it out of the US market.

About $300M paid for Redwood in 2019; US CBD operations wound down by end of Q2 2023; US webstore cleared at 75% off

US CBD never paid its way: Cronos framed the exit as a way to 'improve its cash flow in the near term'.

The regulatory change the brand was built around had not arrived — Cronos said it would enter the US THC market only 'when the necessary changes in U.S. regulatory conditions occur'.

Canada's fully legal adult-use cannabis market offered the brand a better home than the US CBD segment.

Sister brand Happy Dance had already abandoned e-commerce in January 2023, signalling the direct-to-consumer CBD playbook had failed.

A brand bought for a regulatory future that never arrives turns into a cash drain; exit early enough to redirect the money, and expect to sell the inventory at a quarter of its sticker price.

Lord Jones was set to relaunch as an adult-use cannabis brand in Canada in Q4 2023. Cronos did not respond to press questions about the exit; the US clearance sale ran until June 23, 2023.