Clever Leaves Holdings Inc. (NASDAQ:CLVR) is expanding its partnership with German cannabis distributor and wholesaler Cansativa GmbH.
The move comes on the heels of Cansativa’s announced series B fundraise. The financing enhanced Cansativa's ability to grow, capitalize on the existing medical cannabis market and prepare for entry to the potential German recreational market.
Under that deal, Casa Verde Capital, LLC agreed to lead an investment round into Cansativa of up to $15 million, followed by other additional investors. This financing round will assist Cansativa in capitalizing on its strong position in the German cannabis market, as well as preparing for the potential German recreational market.
Clever Leaves Sales Agreement With Cansativa
In connection with Cansativa's Series B capital raise, Clever Leaves' indirect, wholly owned subsidiary, Clever Leaves Portugal Unipessoal, Lda. and Cansativa entered a three-year commercial supply agreement.
Subject to its terms and conditions, the supply agreement provides that Cansativa will purchase a minimum of €2 million ($2,26 million) of high-THC cannabis flower from Clever Leaves Portugal' Portuguese facilities.
Throughout 2022, Clever Leaves will continue to develop its relationship with Cansativa and the German cannabis market by providing safe, reliable, pharmaceutical-grade products through Cansativa's distribution network, which includes thousands of authorized German pharmacies.
The supply agreement is expected to be initiated around the end of 2022, contingent upon Clever Leaves Portugal receiving EU GMP certification as well as the closing of Cansativa's fundraise and other conditions.
Clever Leaves Generates Liquidity Through Partial Sale Of Cansativa Ownership
In connection with Cansativa's Series B capital raise, Clever Leaves' indirect, wholly owned subsidiary will sell a portion of its Cansativa holdings, which is expected to generate approximately €2.3 million of pre-tax proceeds and reduce Clever Leaves' expected ownership to approximately 9%.
"The expansion of our partnership will help strengthen our foothold in Germany and address the patient demand for premium, medical-grade products,” Andrés Fajardo, president and incoming CEO of Clever Leaves,“ said. “With the additional investment from Casa Verde, we believe Cansativa is well-positioned to benefit from current and prospective regulatory tailwinds in the German market.”
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