Deal between Clever Leaves, Canopy could be template for other cannabis firms

The Latin American subsidiary of Ontario-based Canopy Growth inked a supply deal with Clever Leaves in Colombia, mere days after the Canadian cannabis company announced a major pullback of its international cultivation strategy.

Canopy’s deal with Clever Leaves, an international medical cannabis company with its main operations in Colombia, could provide a template for other marijuana  firms looking to grow their businesses in Latin America, but are unwilling or unable to do their own extractions or cultivate their own cannabis.

Under the terms of the one-year deal, Clever Leaves is supplying Canopy LATAM with extracted products in Colombia.

Canopy says Clever Leaves has delivered the first of these products to Canopy.

The agreement includes an option to renew for two more years.

Clever Leaves has facilities GMP-certified by INVIMA, Colombia’s National Food and Drug Surveillance Institute.

Neither price nor total or minimum quantities were mentioned in the press release.

Niklaus Schwenker, director of communications of Canopy Growth Latin America, told Marijuana Business Daily that the deal with Clever Leaves is not exclusive, as “both parties retain the ability to buy or sell to other parties.”

Canopy aims to have an “asset light model” in Colombia.

Canopy still has an ongoing agreement with ProCaps, based in Barranquilla, Colombia.

Schwenker told MJBizDaily that “it was and it remains our intention to supply Procaps with raw material and to market the finished products in Latin America.”

Procaps produces medicines and nutritional supplements for a number of international companies, exporting to dozens of countries.

In a previous press release about an agreement with ProCaps, Canopy said it “will leverage Procaps’ industry-leading formulation and encapsulation capacity, which is especially critical in serving Latin American markets where there is a strong regulatory preference for oil-based products, including softgels.”

Khiron Life Sciences, another company with operations in Colombia, recently started the first sales of medical cannabis there as magistral preparations.

Canopy trades on the New York Stock Exchange as CGC and the Toronto Stock Exchange as WEED.