Northern Swan Holdings, a New York-based investment firm focused on a growing portfolio of cannabis cultivation and manufacturing companies, has been on a fundraising tear in 2019. Infused with capital and overseeing a footprint that stretches across six countries, the company is now set to fully integrate Colombia-based Clever Leaves.
The resulting business will operate under the brand Clever Leaves, which, all things considered, is more than likely the better name for a cannabis company, CEO Kyle Detwiler told Cannabis Business Times.
Detwiler’s executive team is pursuing this integration for three main reasons:
The main goal here is to create alignment. Northern Swan has amassed a large international presence. As commerce crosses national borders and oceans, it’s going to become more important for sprawling companies to get on the same page—under one overarching brand.
Much of the early investments in Northern Swan have gone toward the company’s Clever Leaves cultivation infrastructure in Colombia. Detwiler has told CBT that the company is carefully watching the international commoditization of cannabis. Staying on the bottom of the cost curve is a vital move at this stage of the industry, allowing a large company like Clever Leaves to ride out impending price decreases across the marketplace.
“Combining the entities allows us to accomplish that,” he says.
To get there, the company is focusing on social integration among its more than 550 employees. Much of the workforce is based in Colombia, but they’ll now be working more closely with employees in Frankfurt or London, for example.
The other two reasons involve capital markets and debt financing. It’s easier to get financing, Detwiler says, when you’re operating a single entity that can be clearly explained to investors.
Lastly, as with many cases of merger integration across the cannabis market, this move is about eliminating redundant infrastructure and streamlining the branding process. Cannabis is not the easiest industry to work within, Detwiler says with a laugh, and getting these companies aligned can only make future growth a simpler process.
