Boulder-based Mile High Labs purchases Sandoz facility in Broomfield to manufacture CBD products - Boulder Daily Camera

Boulder’s Mile High Labs, a leader in extracting and processing cannabidiol from hemp, including CBD isolate, is getting into the business of manufacturing private-label CBD products.

Photo courtesy of Mile High Labs

Boulder-based Mile High Labs paid $18.75 million for the Sandoz facility in Broomfield, where it plans to begin manufacturing private-label CBD products by the end of the year.

Mile High announced Thursday it will purchase the Sandoz facility in Broomfield, where it will start making CBD tinctures, capsules, tablets, topicals and gummies before the end of the year. Sandoz, a division of Switzerland-based global health care company Novartis, is in the process of winding down its generic drug manufacturing operations in Broomfield.

Mile High paid $18.75 million for the land, labs, building and equipment. It plans to hire about 100 new employees, including current and former Sandoz employees, to start production as early as possible. “We expect to produce our first products before the end of the year,” said Steve Mueller, chief technology officer and founder of Mile High Labs.

“We want to bring our best-in-class manufacturing and quality systems all the way to the consumer. This way we can control the quality of the finished product and not just the ingredient,” Mueller said. It was something many Mile High customers had been demanding, he said.

Most manufacturers lack the level of compliance and adherence to good manufacturing practices, the company’s business analyst Benjamin Shank said in a statement. The company recently launched its private label division to become a global “one-stop shop” for CBD, according to a company press release.

The latest investment shows Mile High’s commitment to the cannabis industry, Mueller said. “This is a very significant event for me personally as it’s pretty surreal to go from being by myself in a 1,500-square-foot lab to purchasing a state of the art, 400,000-square-foot pharma facility in under three years.”

Patrick Rea, co-founder & CEO of CanopyBoulder, a venture fund and business accelerator focused on ancillary products and services in the legal cannabis industry, called Mile High’s decision to get into private label manufacturing “a smart move.” It helps Mile High Labs to provide revenue-generating services to its existing customer base, he said. “Trust is the most valuable commodity in the cannabis industry.”

Mile High will be able to cement its current relationships by offering more diverse services, Rea said. The company, in which CanopyBoulder has not invested, has been able raise an extraordinary amount of capital since it was founded in 2016 in Longmont, he said. “It gives them a lot of fuel for growth.”

The CBD sector is growing globally, especially after the passage of the 2018 Farm Bill that legalized the production of hemp, Rea said. Also, anecdotal evidence about its efficacy in providing relief to people suffering from several medical ailments, together with the ease of information flow, and the convenience of purchasing CBD products is helping drive growth, he said.

According to the Brightfield Group, a market research firm specializing in cannabis, the hemp-derived CBD market is expected to reach a value of $22 billion by 2022.

Mile High has been pursuing growth and investors have rewarded the company, Rea said.

In April, Mile High Labs managed to raise $65 million in a five-year term loan that it used to buy millions of pounds of hemp, said Christopher J. Lackner, PR & communications manager for the company. “We have a pretty good supply of raw materials. Our Loveland facility continues to process it.”

In March, Mile High introduced a commercial scale, patent-pending extractor that processes about 50 acres of hemp per day into six barrels of CBD oil.

Last year, it raised $35 million in Series A financing from institutional and private equity investors.

Last month, Mile High opened a new office in New Zealand, Lackner said. As a company serving global markets, Mile High is “always looking for new opportunities in new markets,” he said.

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