Clever Leaves

Clever Leaves is the company that has taken the geographical argument for Colombian cannabis literally: produce pharmaceutically, outdoors, with constant sunshine and radically lower costs than in Europe or Canada, to export to medical markets worldwide. Founded in Bogotá in 2016 by two Colombians and a Wall Street financier, it was the first Latin American company to achieve EU-GMP certification for its cannabis extracts and the first to claim carbon neutrality in the industry.

Bogota, 2016: two entrepreneurs and a drug policy expert

Clever Leaves was born from the meeting of two complementary Colombian profiles. Andrés Fajardo is an entrepreneur and former consultant with Booz & Company, with extensive experience in the outsourcing of healthcare services in Colombia. Julián Wilches comes from the public sector: he used to work for the Colombian Ministry of Justice, in the fight against illegal narcotics. For him, the legalization of medical cannabis under Law 1787 of 2016 is an opportunity to radically transform the country's image on the international stage: «Pharmaceutical products always came from the North to South America. We can reverse that model.»

The two partners raise $7.7 million in a seed round in 2016, then $23 million in Series A in 2018. Kyle Detwiler, formerly of KKR and The Blackstone Group's Tactical Opportunities fund, will join in 2017 via Northern Swan Holdings, an investment vehicle he founded specifically for Colombian cannabis, before taking on the role of CEO at IPO.

The Colombian advantage: sun, cost and regulation

Colombia has a structural advantage that no other producing country can match: an equatorial line that guarantees 12 hours of sunshine a day all year round, eliminating the need for energy-intensive indoor installations. To produce one kilogram of dried flowers, Clever Leaves generates just 16 kg of CO2, compared with 2,300 to 5,200 kg for traditional indoor production. Production costs are estimated to be a fraction of those in Canada or Europe.

Clever Leaves sets up its first greenhouses in Pesca, in the department of Boyacá, a few hours from Bogotá. The company quickly established itself as the municipality's leading formal employer, with 75% of women on its payroll - the majority of them single mothers who had fled conflict zones.

Latin America's first EU-GMP certificate

In July 2020, Clever Leaves obtained EU-GMP certification for its cannabis extracts produced in Colombia - a first in Latin America, and one of the few in the world for a production site outside Europe. This certification opens the doors to the German, Australian and Israeli pharmaceutical markets, which require this accreditation for all imports.

In 2021, Clever Leaves will enter into a supply partnership with Ethypharm, a European pharmaceutical manufacturer and distributor with a presence in France, to deliver high THC, CBD and balanced extracts to the German market, under Ethypharm brands.

The IPO via SPAC and the turbulence

In December 2020, Clever Leaves Holdings enters the NASDAQ under the ticker CLVR via a merger with SPAC Schultze Special Purpose Acquisition Corporation, in a deal valued at around $205 million. The stated ambition is to become «the world's cannabis breadbasket».

The post-SPAC trajectory follows the classic industry scenario: difficulties in achieving profitability, pressure on costs, rationalization of assets. Clever Leaves abandons its operations in Portugal (whose EU-GMP facilities are sold to Curaleaf for around 2.5 million euros) to refocus on Colombia as its main production hub. Market capitalization falls to a few million dollars by early 2025.

Clever Leaves nevertheless remains one of the few medical cannabis producers to offer EU-GMP extracts grown outdoors, at low cost and with a certified carbon-neutral footprint, a unique positioning in a European medical market increasingly attentive to ESG criteria.