Clever Leaves' facilities in Columbia and Portugal make them one of the worlds largest cannabis producers. Kyle Detwiler joins Dan Humiston to talk about how they quietly grew so quickly outside of the USA. They discuss the advantages of growing cannabis in Columbia and their plans for the future. Produced by PodCONX https://podconx.com/guests/kyle-detwiler
Clever Leaves' facilities in Columbia and Portugal make them one of the worlds largest cannabis producers. Kyle Detwiler joins Dan Humiston to talk about how they quietly grew so quickly outside of the USA. They discuss the advantages of growing cannabis in Columbia and their plans for the future.
https://podconx.com/guests/kyle-detwiler
Dan Humiston: [00:00:00] The race to be the first national cannabis dispensary chain is heating up. Who will emerge as the Starbucks of Cannabis? We're kicking off the Dispensary Spotlight series featuring CEOs of twelve of the fastest growing dispensary chains. Listen in February for the Dispensary Spotlight series and you may hear the future Starbucks of Cannabis running on a good time schedule.
Kyle Detwiler: [00:00:23] It will be very well positioned. So therefore, you know, we are in the midst of a capital where it is now. The hope would eventually be to go public. We didn't have a U.S. presidential election next year. I would say I would normally expect we'd do it by the end of next year. But with that political uncertainty, it could look into 2021.
Dan Humiston: [00:00:44] From MJBulls Media. It's the Raising Cannabis Capital show. I'm Dan Humiston. And on today's show, how this company has quietly become one of the world's largest Cannabis cultivators and they don't have a grow facility in the United States.
Dan Humiston: [00:01:11] Today on. Raising Cannabis Capital, We are joined by Kyle Detwiler, the CEO of Clever Leaf's.
Dan Humiston: [00:01:16] Kyle, welcome to the show.
Kyle Detwiler: [00:01:17] Hey, thanks very much for having me.
Dan Humiston: [00:01:19] Well, I'm pretty excited. A lot of news about your company and a lot of attention right now. And I want to dive into all the stuff that you're doing. But I think for our listeners, it's important that we take it back a little bit. So I'd like to start off with your company, Northern SG1, which is an investment firm focused on transformative Cannabis International Investments. You, the CEO of Northern Suan and everyone pay attention. This one responsible for raising over 100 million dollars, over $100 million raised to invest in Cannabis. These guys are serious players in kind of under the radar. Let's start off there. Can you tell us about Northern Suan and some of the companies that you've invested in?
Kyle Detwiler: [00:01:59] Yeah, absolutely. So we started Northern Suan really in 2016. You know, we've been analyzing the Cannabis industry for a while and began really just investing our own capital. We started with a small investment in Canadian data and marketing company called Listing Company, which is now a publicly traded in Canada. Really that opened our eyes to the space. You know, we started to learn about consumer trends. The difference between flower and extract products started to learn about the differences between the Canadian market and United States. And it's really just kind of the opener. Eventually what we determined was that it was a little bit more difficult for us to make a 10 investments in 10 different companies have a low level of influence. You know, I grew up investing at KKR or the Blackstone Group. So generally control oriented private equity style. And so, you know, we decided that we'd rather put all of that capital that we normally 10-best with and put it the one bed. And we did that down in Columbia at a time when I think most people thought we were flat out nuts. And now I think in retrospect, people appreciate what we've done down there. As we began to invest more and more in Columbia, the portfolio company or the investment company that we invested in down at Columbia was called Cleverley. And we suddenly, you know, the 70 percent owner of the largest license producer in Columbia and decided that we had also incubated some projects in Europe and said maybe it makes sense to combine these things so that the Colombian operation that's sort of vested in the success of Portugal and Germany and vice versa and really make it one big happy family.
Dan Humiston: [00:03:31] Wow. And so it was recent in November, you officially changed the name, merged the two companies, and you were announced as the CEO of the new entity, which is called Clavel Leaves. And you have subsidiaries in Colombia, Portugal, Canada, United Kingdom, Germany, United States. As far as I can tell, you were one of the largest Hemp and medical cannabis producers in the world is accurate.
Kyle Detwiler: [00:03:57] You know, always tough to measure, you know, by employee count. You know, we have over 750 employees. I think that generally shocks most people. As measured by square footage, you know, we have about 1.9 million square feet of cultivation capacity in greenhouses, plus about 70 million square feet of outdoor properties. That's very big. You know, we are in terms of kind of blockbuster Netflix, you know, consider us, you know, a new business model, right? We're a low cost, sustainable producer. And we were only operating in federally legal markets. So the regulatory barriers to getting, you know, the massive amount of production that we have to sell has taken longer than we would have liked. And so I think really cleverly is going to start to get known a lot more in 2020 when we kind of finally break down these barriers or overcome the challenges that are required to become one of the first producers in Colombia, exporting to the U.K., to Germany, maybe the United States.
Dan Humiston: [00:04:54] And they want somebody that really doesn't know anything about growing. It seems to me that you have you'd have a huge advantage with production coming out of Colombia.
Kyle Detwiler: [00:05:03] Colombia is just an amazing train or biome for candidates cultivation. You know, we weren't geniuses. We didn't fall in the bathtub and have our eureka moment. I think the world is doing this for a long time. If you walked into a flower shop in New York City and you walked in there and wanted to order some roses, those roses were imported. There's a seven in 10 chance of came from Colombia. So Colombia has a great climate for this deviation of a length of day from the longest day to the shortest day. The year in terms of sunlight is a grand total of 12 minutes. Basically a perfect twelve hours of darkness. Twelve hours of sunlight. We have the conditions that people spend hundreds of dollars per square foot to build and hundreds of dollars per kilogram to grow. We did all that conditioning that everybody in the United States in indoor facilities or candidate tries to trick the planet. The feeling we get all of that for free. You know, the Americans and the Canadians for the trick the went into feeling like it's in Colombia when it's really an adventure.
Kyle Detwiler: [00:06:04] On top of that. There's some other more you wants advantages, which I'll be frank. You know, we only found out by doing you know, when we started in Columbia, we tested growing in seven or eight different pockets of the country. And we found out pretty quickly that at high elevations we have lower yields, but we have lower pests. And if you're going to do candidates without pesticides and herbicides and fungicide and that sort of thing, we decided to grow at 80, 300 feet of elevation higher than Denver. And that is a very different environment, but also very suited for what we're trying to do.
Dan Humiston: [00:06:37] That is really interesting. You've used Mother Nature as your business partner, essentially to give you an advantage over everybody.
Kyle Detwiler: [00:06:44] Yes. And I think it goes beyond that, too. I mean, you know, we went into an area in Columbia where 90 percent of employment was informal. So when suddenly a legitimate employer, you know, willing to farm the labor laws of Columbia, willing to pay a little bit of a premium and also go out of its way to bus workers in so that they can maximize their time with their family, you know, provide lunches, English lessons and a variety of other things that's been really important for us. Also made social impact as a key cornerstone of our business. So we employ more than 70 percent women in Columbia and more than half of those are single mothers. And in that country is actually a tippin or an idea from one of our investors that employed a similar strategy in their restaurant business. And we found that to be quite effective, not just about recruiting, but about what we say is cultivating mojo. You know, really making this a place that people love to come to. They really feel like they're making a difference. And I think that's been a nice competitive advantage as well.
Dan Humiston: [00:07:42] I think it's great. It's great that you're having an impact in the community, not just taking your products and moving it out of the out of the country, but actually having an impact on the community. I think that's this says a lot about your company.
Dan Humiston: [00:07:57] I want to take a quick break to thank you for listening to today's show as the exclusive Cannabis podcast network. We're constantly adding new Cannabis podcast to support our industry's growth. And that's why we're so excited to welcome the Seed to Sound podcast to our network. The team at Seed to Sound has produce over 50 exciting and thought provoking Cannabis podcasts. And now you can listen to all their previous episodes and all their new episodes at MJ Blaze.com. So welcome seed to sound. And stay tuned for new exciting Cannabis podcast on the MJBulls Cannabis Podcast Network.
Dan Humiston: [00:08:37] You mentioned earlier that you have 700 and to any hundred employees in there all over the world. I know you have a commitment also in Portugal. We can talk about that for a minute.
Kyle Detwiler: [00:08:48] Yes. No, I think it was great. You know, we always been very thrifty people. Maybe it was my humble upbringing in South Dakota. You know, public school before taking out hundreds of thousand dollars of loans to pay for an expensive East Coast education. You know, we're very thrifty. You know, we found a very interesting opportunity in Portugal to actually buy a distressed greenhouse that was being run by an agricultural company in Australia. Ironically, they entered financial trouble. And so they had just expanded to Portugal and Tennessee, of all places, and decided to shut down the business due to problems in Australia. And they sold the business to a group who didn't have interest in Tennessee and Portugal just didn't have any operations over there. So if you ever watched one of those disease outbreak movies where, you know, somebody walks into a building and like, you know, the computer screens are still on. Yeah, he's still going the nightly news. Like that's what the facility was like.
Kyle Detwiler: [00:09:42] It was perfect for us. Had one hundred thousand square feet of existing greenhouse, had existing infrastructure for processing that we could retrofit at low cost. And already in just a couple of months we own about, I think nine million square feet of land in Portugal. I don't think there are published as mystics, but that may make us the largest landowner of any candidate's company in continental Europe. And also, you know, we're walking in to a community which was expecting an agricultural company to put several million square feet of greenhouse in there. Now, one thing I've learned in Cannabis is if you're the first guy to come in and you say, hey, I want to go for growth, 2 million square feet of smelly Cannabis, you run into some opposition when you run into a community was expecting a project and didn't get that as opposed to being sort of like this intruder, really more like a white knight in that area trying to bring employment, which was promised to that area, albeit through different me.
Dan Humiston: [00:10:36] Yeah, that that worked out great. And like you said, you you sort of stumbled into it. But it was it sounds to me like a perfect opportunity. Now, as I mentioned earlier, I mean, you just said that you could be the largest Cannabis land owner in Europe. And that just goes back to what I said in the beginning where, you know, you quietly snuck up on the industry, but not in the investment community. You raise over 100 million. You just finished a series B round in 2019, I think was close to 60 million. What's the plans for continuing raising capital?
Kyle Detwiler: [00:11:09] I think, you know, we are still free cash flow positive and that's because of these growth initiatives. Portugal we're super excited about. I think the market's slowdown in Cannabis only means great things to those that will survive and persist. I think I looked at all of the pitch decks of everybody who was going to build these super expensive facilities in Europe. I'd predict, you know, 80 percent of those won't get constructed anymore, which means when we were really can conservative in our financial forecast, assuming there was a glut in Europe in four years, you know that may not happen now. So I think we can get our operations up and running on a good time schedule, think we'll be very well positioned. So therefore, you know, we are in the midst of a capital where it is now. The hope would eventually be to go public. We didn't have a U.S. presidential election next year. I would say I would normally suspect we do it by the end of next year. But with that political uncertainty, it could slip into 2021.
Dan Humiston: [00:12:03] Okay. Well, I'll tell you what, our listeners will be very excited when that happens. And we'd love to have you back on the show when you know, when you're closer to that date, because this is an investment that I know will be a lot of excitement around. And we'll certainly want to have you back on the show when that happens. What's the plan for the next, say, 12 months?
Kyle Detwiler: [00:12:24] We still have some big milestones to achieve, even though we've already broken down a lot of barriers in this industry. Still have a few more to go. I mean, when we started again, most people thought we were not going to Columbia, but we've proven that we can grow down there, proven that we can process. You know, in Colombia, we now have one of the only GMP certified candidates processing facilities south of the United States. We also just received our famous THC quota in Colombia. You know, we've been authorized to sell an export approximately 1000 kilograms of high THC medical candidates. To my understanding, that is the largest quota given out by the Colombian government. We have to do right by that. And we're already focused on using that quota for shipment to countries such as Germany. We have a number of upcoming milestones to achieve over there. Hopefully we'll begin picking through those in the second quarter or third quarter. The one thing I will caution people that even though we've done a lot of the company, you know, we've got 750 people on three continents. We've raised 100 million dollars of capital. We've built what we think is the second largest greenhouse operation in. In medical Cannabis in the Western Hemisphere, the hardest thing we ever did was build drywall in Frankfurt. You know, it is just a complicated place to operate. We're trying to upgrade our Wi-Fi in our building. That might take three months. So things just take a little bit longer. I mean, it's also good because the rules of the road are very, very clear. You know, this is not a market where you have to worry about the rules shifting or different political interests changing the landscape on you. You don't have that concern. But in exchange for that, you do have a lot of a lot of paperwork, a lot of process. And so that's what our teams in Frankfurt are nose to the grindstone focused on.
Dan Humiston: [00:14:15] Well, this is so very exciting to have spoken with you today. And just think you're not even in the United States yet. I mean, really, the sky's the limit for your company. Yeah. Every day. Gotta be reason to get to work because this is an exciting time. I'm really happy for you. This is fun. We've been speaking with Kyle Detweiler, the CEO of the new company, Clever Leaves. And we'll have Kyle's contact information and the MJBulls Web site.
Dan Humiston: [00:14:42] Kyle, this has been a real pleasure. Thanks for being on the show. They've your everything. Today's show was made possible by the generous support of our sponsors, like all 36. The country's premiere blockchain payment processing platform that's providing dispensaries and its customers with a safe and secure payment option other than cash. To learn more. Go to ulp 36 dot com. Today's podcast was produced by MJ PBL's Media, the industry's premier Cannabis podcast network with original music, produced in part by Jamie Humiston.
Dan Humiston: [00:15:15] I'm Dan Humiston and you've been listening to the Raising Cannabis Capital podcast.
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