Grove, which calls itself one of the largest wholesalers of CBD products in the U.S., is launching a division of its company devoted to acquiring products that sell primarily online marketplaces like Amazon.
Grove is an umbrella company that owns the CBD brand GRN as well as a line of CBD infusion products. Most of its products are sold wholesale to stores — and, because of restrictions on hemp sales, it has not had a robust Amazon presence. But the company is now creating a spinoff website, called Upexi, for Amazon-native brands in the health and wellness space interested in selling their businesses.
In doing so, it’s joining a small list of established brands that are adding a marketplace-focused acquisition strategy to their business models. Most prominently, the Germany-based Berlin Brands Groups announced in January that it was earmarking $302 million toward a marketplace-focused acquisition strategy after over a decade of creating its own products. Some long-time Amazon sellers, like the consumer products company Goja that has sold on eBay and Amazon since 2009, have also more quietly been buying up smaller brands on Amazon. The addition of Grove underscores that interest in the Amazon aggregator business model is spreading — but even so, there’s a limit to how many established companies might try to acquire individual marketplace products for now.
Nathan Stavseth, CMO of Grove, said that the company has been paying attention to Amazon aggregators over the last year. But Stavseth said he began noticing that many of “a lot of the companies out there were just DTC and they lacked the vertical integration that we had.”