Connect with us

Hi, what are you looking for?

Sunday, May 16, 2021
Mugglehead Magazine
Cannabis & psychedelics industry news based in Vancouver, B.C.
  • Loading stock data...

Industry update

Canopy keeps one toe in Colombia, inks regional supply deal

The weed giant signed a one-year extract deal with Clever Leaves one week after it closed its Colombian operations

Canopy keeps one toe in Colombia, inks regional supply deal
Canopy keeps one toe in Colombia, inks regional supply deal

One week after Canopy Growth, Corp. (TSX: WEED and NYSE: CGC) shuttered its Colombian greenhouses, the weed giant announced a new supply deal to stay inside the promising cannabis region.

On Tuesday, the Ontario-based producer said its Latin American subsidiary, Canopy LATAM, reached a deal to purchase extract products from Clever Leaves, which operates 1.8 million square feet of GMP-certified cannabis facilities in Columbia.

Canopy has already received its first extract product order from Clever Leaves, and the one-year agreement has the option for another two years, according to the press statement.

The move falls in line with Canopy’s new strategy of moving to an asset-light model that leverages local suppliers inside the South American nation.

Last Thursday, the industry powerhouse said it was scaling back operations across three continents to reduce capital-heavy investments, including scrapping its Colombian grow operations.

“Clever Leaves has proven its capabilities in Colombia and through this supply agreement, Canopy LATAM is furthering the implementation of its asset-light model and accelerating time to market with regionally produced, GMP-certified medical cannabis products,” said Antonio Droghetti, Canopy’s regional managing director.

“This agreement strengthens Canopy LATAM’s regional supply chain and demonstrates our continued commitment to working with industry partners to further the growth of Colombia and the LATAM region’s medical cannabis industry.”

Clever Leaves said it recently obtained a licence in Colombia to export high-THC medical weed to new global customers. The company has invested heavily inside Colombia, which it says will help it become one of the largest suppliers of medical cannabis globally.

Analysts say Colombia will reshape legal weed with its ideal growing climate and low production costs of well below 50 cents a gram driving down global prices.

Read more: California-based Ikänik Farms enters Colombia with acquisition of cannabis company Pideka

Kyle Detwiler, CEO of Clever Leaves, said the new Canopy deal will boost its near-term revenue streams.

“It also validates Colombia as a key source for the future of the cannabinoid supply chain,” he said. “Certified with Good Manufacturing Practices to produce medical cannabis, Clever Leaves is well positioned to supply companies such as Canopy Growth, enhancing their returns on capital invested and enabling greater focus on downstream commercial activities.”

Canopy shares slid $0.19 on Tuesday at the Toronto Stock Exchange.

The company also said it shut down its New York-based hemp farm, and on Monday it launched a new line of CBD-infused hand creams in the U.S. under its First & Free brand.

Top image of Clever Leaves’ cultivation facilities in Colombia via Clever Leaves

 

jared@mugglehead.com

@JaredGnam

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Canada

Enthusiasts making the trip to the company's farm in rural Ontario will be able to connect directly with the people making the products they...

Canada

While the CQA says it's developed an unbiased program to help Canadian producers with marketing, craft growers call its directors 'parasites'

Canada

As more medium-to-small producers came into play this year, great weed started hitting legal shelves at fairer prices

Enforcement

The legislation's steep penalties and confusing rules are a step backward to populations that have used cannabis traditionally for centuries