Cura Cannabis Solutions – one of the biggest cannabis companies in the United States by revenue – is expanding into the Canadian market through a partnership and supply deal with one of Canada’s top licensed producers, Cronos Group.
Cura Select Canada, the Portland, Oregon-based company’s Canadian affiliate, plans to build a production hub in British Columbia to meet domestic demand.
The move is also intended to act as a steppingstone to overseas opportunities, Cura Cannabis Solutions CEO Cameron Forni told Marijuana Business Daily.
As part of the deal, Cura signed a five-year “take or pay” supply agreement with Cronos to purchase a minimum of 100,000 kilograms (220,462 pounds) of cannabis over a five-year period, one of the largest guaranteed supply deals to date in Canada.
A “take or pay” supply agreement means either Cura takes the material for extraction or pays for what’s been grown.
Financial terms of the deal were not disclosed, but an April deal between Hydropothecary and Quebec for 200,000 kilograms was thought to be worth more than CA$1 billion.
Cura recorded revenue of $18 million (23.48 Canadian dollars) in the quarter ending March 31. For comparison, Canada’s top marijuana company, Canopy Growth, had revenue of CA$22.8 million in the same period.
The cannabis in the supply agreement will come from licensed producer Original BC, a Cronos subsidiary, and Cura Select Canada will build an extraction facility on a parcel of land owned by the LP.
The deal doesn’t involve Cura or Cronos taking a stake in each other. Cura will hold its own Canadian federal licenses via its subsidiary, Cura Select Canada.
Toronto-based consulting firm Cannabis Compliance (CCI) brokered the deal that brought Cronos and Cura together.
“Cronos already had the footprint in Israel and European Union, which made it the most attractive” for Cura, CCI’s Michael Elkin said.
Elkin, who heads CCI’s California operations, expects more American companies to follow Cura’s international expansion model.
“We expect to be shepherding in more American brands that are going to add value to the recreational space in Canada,” he said.
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