A California company has acquired the Social CBD brand from Sentia Wellness, a high-profile Portland business beset by a series of problems after its troubled launch in 2019.
Kadenwood, a privately held company in Southern California, announced last week that it had bought the Social CBD brand to add to its existing line of CBD-based sports creams, pet foods and teas. The companies didn’t announce terms of the deal.
CBD, or cannabidiol, is derived from hemp and doesn’t have the psychoactive ingredient of recreational marijuana. CBD has attracted a following of enthusiasts who believe its properties improve health and well being.
Sentia didn’t say whether it will continue to operate after the deal and referred questions to Kadenwood. The California company said it will retain 16 Sentia employees, 14 of them working remotely in Oregon or working at its Portland warehouse.
Sentia emerged from the 2019 sale of controversial Portland marijuana company Cura Cannabis two years ago. Cura sold its recreational marijuana business to a Massachusetts company, Curaleaf, which is now one of the nation’s largest cannabis businesses.
Cura’s original funding came from a notorious Lake Oswego real estate firm, Iris Capital, whose 2015 collapse cost dozens of Oregon retirees approximately $1 million. And Cura’s former CEO, Nitin Khanna, left that job amid fallout from a past rape allegation against him, but he remained involved in the company and later ran Sentia.
Curaleaf had its own CBD line and didn’t buy Cura’s CBD brand. So Cura insiders launched a new company, Sentia Wellness, built on the new Social CBD product line. Regulatory filings indicate Sentia had raised $91 million, but it ran into setbacks from the very start.
Sentia laid off 30 of its 150 staff members less than five months after its launch, blaming uncertainty over how federal health regulators would treat CBD. The Portland company was later sued by its landlord when Sentia sought to cancel its lease for its Pearl District headquarters, and by an Italian chocolate company that accused Sentia of backing out of a deal to buy manufacturing equipment.
Court records indicate Sentia settled the dispute with its landlord, but the $2.2 million suit over its manufacturing equipment remains active.
Kadenwood said buying Social CBD will expand the California company’s retail network to 18,000 stores.
“As the CBD industry continues to grow, we are excited to see the Social CBD products and brand transitioned to the expertise of the Kadenwood team,” said Khanna, described in last week’s announcement as Sentia’s CEO. Kadenwood said Khanna will have no role with the business after the acquisition.
Sentia hadn’t publicly identified a CEO before last week, though Khanna was a regular presence in the company’s office and was active in raising money for the Portland business.
Once a prominent figure in Portland’s tech community, Khanna moved into the marijuana business after his wife’s hairdresser accused him of raping her early on the morning of his own wedding in 2012. Khanna denied the sexual assault allegations but wouldn’t say whether he had sex with the hairdresser that morning.
Prosecutors didn’t charge Khanna, saying that while DNA evidence showed he had sexual contact with the woman they couldn’t prove it was nonconsensual. Khanna settled a lawsuit the woman brought against him in 2014 without disclosing terms of their agreement.
Khanna stepped down as CEO of Cura, the Portland marijuana company, in 2018 after women active in the marijuana community highlighted the past allegations against him. He remained the company’s executive chairman, though, and engineered its sale to Curaleaf.
This article has been updated with additional information about the acquisition.
— Mike Rogoway | mrogoway@oregonian.com | twitter: @rogoway | 503-294-7699
