Cannabis capitalism is global.
If there’s a cheaper way to make something, multinational corporations will use it.
This isn’t anything new, of course. We’ve long known that our shirts are made in Bangladesh, our cars are made in Mexico and our computers are made in China.
It seems with every new kind of product or innovation, manufacturers turn to international sources to cut costs and widen margins.
This is true even in the drugs we put into our bodies. In that above quote, a leading expert at the FDA gave testimony about the outsourcing of the ingredients that go into pharmaceuticals.
Outsourced medical products are therefore more common than not.
“As of August 2019, only 28 percent of the manufacturing facilities making active pharmaceutical ingredients (API) to supply the U.S. market were in our country.”
- Janet Woodcock, M.D., Director of CDER at the FDA
So, what about medical marijuana?
This is a question we’re about to have answered in a big way.
Of Course, It’s Colombia!
Clever Leaves International announced this week that it was combining its business with a special purpose acquisition company (SPAC). The new company will begin trading on the Nasdaq with the expected ticker symbol CLVR.
There’s a lot to unwrap there. But the consequence of the announcement is that one of the first real multinational marijuana growers will begin publicly trading in the United States.
Clever Leaves’ major operations are in Colombia. And because of that country’s laws, it only produces marijuana for medical purposes.
But it sells that pot everywhere.
Earlier this month, the company received “EU Good Manufacturing Practices (EU GMP)” certification allowing it to expand API sales in the EU even further. Note that it is labeling medical marijuana as API, or the very active pharmaceutical ingredients we import three times as much as produce ourselves.
Clever Leaves’ medical marijuana is being exported to Australia, Brazil, Canada, Germany, and even the US. That’s right. It already sells its products in North America. It sells medical marijuana in Canada and CBD products in the U.S.
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It’s also important to note that back in April it reached a supply agreement with Canopy Growth Corp. (NYSE: CGC). Canopy is the largest supplier in Canada. And it intends to launch sales into the U.S. the minute federal laws change.
The supply deal means there’s a path for Colombian marijuana to find its way into Canadian and even U.S. homes. And this time it’s completely legal.
But Why Colombia?
The country’s equatorial geography allows for a full 12-hour day. Its climate is ideal for the production of cannabis. And that means the country is perfect for the outdoor manufacturing of the plant.
That’s something that you can’t really do much of in Canada or the United States. Most production in North America comes from indoor hydroponic grow houses, which are expensive.
That cost ripples through the industry down to the per-gram cost of cannabis. In Canada, the average cost to produce marijuana is above $2. In Colombia, Clever Leaves is already able to produce it at between 20 and 50 cents per gram.
Now, there are differences in quality. North American strains don’t always take well in Colombian soil. But that can be worked out.
The merger and public listing will put roughly $111 million in fresh capital into Clever Leaves’ hands. With that, the company is planning a massive expansion of its Colombia’s facilities and further development of North American strains.
While the rest of the cannabis industry struggles over prices and retail problems, like we outlined last week, global capitalism will continue to find the cheapest solutions.
For early Clever Leaves’ shareholders, that means a lot of eyes should begin focusing on Colombia.
You can buy shares of Clever Leaves before the completion of the merger. The SPAC it is combining with already trades on the Nasdaq under the name and ticker Schultze Special Purpose Acquisition Corp. (NASDAQ: SAMA).
The upside of this opportunity is really endless. Cutting marijuana costs by upwards of 90% could truly change the entire industry to its core.
This isn’t the only Colombian play. But it is one of the purest plays.
And as of today, it is relatively unknown.
The supply deal means there’s a path for Colombian marijuana to find its way into Canadian and even U.S. homes. And this time it’s completely legal.
But Why Colombia?
The country’s equatorial geography allows for a full 12-hour day. Its climate is ideal for the production of cannabis. And that means the country is perfect for the outdoor manufacturing of the plant.
That’s something that you can’t really do much of in Canada or the United States. Most production in North America comes from indoor hydroponic grow houses, which are expensive.
That cost ripples through the industry down to the per-gram cost of cannabis. In Canada, the average cost to produce marijuana is above $2. In Colombia, Clever Leaves is already able to produce it at between 20 and 50 cents per gram.
Now, there are differences in quality. North American strains don’t always take well in Colombian soil. But that can be worked out.
The merger and public listing will put roughly $111 million in fresh capital into Clever Leaves’ hands. With that, the company is planning a massive expansion of its Colombia’s facilities and further development of North American strains.
While the rest of the cannabis industry struggles over prices and retail problems, like we outlined last week, global capitalism will continue to find the cheapest solutions.
For early Clever Leaves’ shareholders, that means a lot of eyes should begin focusing on Colombia.
You can buy shares of Clever Leaves before the completion of the merger. The SPAC it is combining with already trades on the Nasdaq under the name and ticker Schultze Special Purpose Acquisition Corp. (NASDAQ: SAMA).
The upside of this opportunity is really endless. Cutting marijuana costs by upwards of 90% could truly change the entire industry to its core.
This isn’t the only Colombian play. But it is one of the purest plays.
And as of today, it is relatively unknown.
That will change.
To your prosperity,
Joshua M. Belanger
Executive Publisher & Founder