June 20, 2019

by Lynda Kiernan

For the second time in a month, Canopy Rivers, a cannabis-focused investment and operating platform, has made an agtech investment in a Finistere portfolio company.

In its latest deal, Canopy Rivers has invested $10 million and forged a strategic collaboration with ZeaKal, a California-based plant genetics innovator, in exchange for an 8.7 percent stake in the company and an observer seat on ZeaKal’s board of directors. 

“Our investment in ZeaKal, the fifth consecutive international transaction for Canopy Rivers, builds on our thesis of selecting globally scalable and innovative processes, products, and technologies from complementary industries, and applying them to the cannabis and hemp economy,” said Mary Dimou, director of business development at Canopy Rivers.

Located in San Diego, ZeaKal is the developer of PhotoSeed™, a proprietary technology that sustainably increases photosynthesis, improves yields, and enhances nutritional profiles of a variety of agricultural crops.

To achieve this, PhotoSeed™ increases a plant’s intrinsic photosynthetic capacity, or its ability to convert more sunlight and carbon dioxide into energy for growth. This results in better seed and grain yields, higher oil and protein content, improved macronutrient profiles, and higher profit margins for farmers. Meanwhile, consumers gain access to better nutritional profiles and the world gains a more environmentally friendly system of producing enough food to meet growing global demand.

After years of field trials spanning a diverse range of species in the U.S., Canada, and New Zealand, with this capital investment from Canopy River, ZeaKal is now planning on expanding its program to include both cannabis and hemp.

“Plant sciences is a mostly overlooked but absolutely critical segment of the cannabis and hemp value chain, and we are seeking to address this gap with this investment,” said Dimou. “ZeaKal’s technology has already realized success across a number of crops during field trials, and these are crops that have been commercialized for decades. The application of this innovative technology throughout the Canopy Rivers portfolio and the cannabis and hemp industry at large could be a game changer.”

Following decades of legislative prohibition, cannabis and hemp have not had the ability to benefit from advances in agricultural research and development that have significantly transformed and improved other crops. And Canopy Rivers believes that the application of ZeaKal’s PhotoSeed™ technology represents the potential for a leap forward for cannabis and help through enriched cannabinoid output, increased crop yields, higher oil content, and additional grow cycles.

“We are elated that Canopy Rivers, a cannabis and hemp industry authority, has selected ZeaKal as an agriculture partner,” said Han Chen, CEO, ZeaKal. “Beyond the capital, it is further validation that PhotoSeed™ is a next-generation blockbuster trait that can be utilized across diverse industries. With its rich domain and technical expertise, Canopy Rivers is supporting our entry into the cannabis and hemp markets with a technology we expect to be transformative for the sector.”

An Environment of Innovation

Canopy River’s investment and partnership with ZeaKal represents the second agtech investment made by Canopy in a Finistere portfolio company in as many months.

In mid-May it was announced that BioLumic, a developer of a sustainable ultraviolet yield enhancement platform, extended its Series A led by Finistere Ventures to include an investment of $1.5 million from Canopy Rivers. The additional capital brought the oversubscribed funding round to $6.7 million.

Headquartered in New Zealand, and actively expanding within the U.S. market, BioLumic harnesses ultraviolet light to activate natural mechanisms in seeds and seedlings that increase growth, vigor, drought tolerance, and a crop’s natural defenses, thus resulting in larger harvest volumes and greater consistency.

Through its platform, BioLumic is aiming to engage with the global legal cannabis market, which is expected to be valued at $146 billion by the end of 2025, according to the company. And with “game-changing” results already being produced in crop trials, BioLumic is positioning to help commercial producers cultivate stronger and healthier plants to meet growing demand.

Canopy Rivers is uniquely situated to support companies such as ZeaKal and BioLumic in realizing strategic growth. As an investment and operating platform designed to seek out investment opportunities in the emerging global cannabis sector, Canopy Rivers has built an ecosystem and portfolio of complementary cannabis companies from the length of the supply chain. And with the continued development of Canopy’s portfolio, comes greater opportunity for collaboration to foster an environment of innovation, synergy, and value creation.

– Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.