Please ensure Javascript is enabled for purposes of website accessibility

Canopy Growth Secures a Regional Supply Deal in Latin America

By Eric Volkman – Apr 22, 2020 at 12:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company will receive cannabis extract products from new partner Clever Leaves.

The Latin American subsidiary of Canopy Growth (CGC 0.20%) has signed a new medical marijuana supply deal in the region with multinational cannabis company Clever Leaves, the companies announced in a joint press release Tuesday.

Under the contract, which will run for one year with an option to extend it for another two, Clever Leaves will supply Canopy LATAM with extracted goods produced in Colombia. And Clever Leaves has already made its first delivery to Canopy LATAM.

The companies did not reveal the financial terms of the arrangement.

Close up of a flowering marijuana plant.

Image source: Getty Images.

In the press release, Canopy Growth touted the advantages of working with a third-party grower and processor, saying that the new partnership "is furthering the implementation of Canopy LATAM's asset-light model and accelerating time to market with regionally produced GMP-certified medical cannabis products."

"GMP" stands for good manufacturing practices, a global quality standards certification. 

Several Latin American countries have legalized medical marijuana to some extent, notably Colombia, Mexico, and Uruguay, with the latter also permitting its sale and use for recreational purposes. The regional market is still somewhat limited, but there is room for a cannabis company with international ambitions to become a major presence there.

The news comes less than a week after Canopy Growth announced that it was reining in its global operations. Among other things, that strategic shift included the decision to shutter its cannabis growth facility in Colombia -- hence its need for a third-party provider there.

Canopy Growth stock was trading essentially flat at midday Wednesday, lagging behind the wider equities market, which was up by around 2%.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Canopy Growth Stock Quote
Canopy Growth
$2.79 (0.20%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.