Global and vertically integrated cannabis company Cronos Group announced a joint venture with an affiliate of Agroidea SAS (AGI), the leading ag services provider in Colombia, to form NatuEra – a business to cultivate, develop, manufacture, and export cannabis consumer products and medicine to both the Latin American and global markets.
With a roster of clients that includes global food giants such as Dole, Frito Lay (PepsiCo), and McCain, and agricultural giants such as Bayer Agriculture and BASF, AGI provides services through five units: a micro-propagation and tissue culture laboratory; plant production services; a plant health laboratory; plant genetics improvement; and a SaaS model for delivering online agricultural management tools.
NatuEra will be a 50:50 partnership led by AGI’s executive team consisting of brothers Andres and Nicolas Nannetti, both of whom have a deep well of experience managing multi-generational industrial-scale horticultural operations that are active in exporting from Colombia. Included in this experience is the acquisition, restructuring, and management of Dole Food’s Fresh- Cut Flower Division – one of the largest such operations in world with greenhouses totaling 1,020 acres.
“We searched extensively for the right partner in Latin America. In AGI we have found an executive team with immense experience in running large scale horticultural operations and serving the needs of large, sophisticated international clients which will be crucial in establishing consistent and efficient supply chains for cannabinoid based products,” said Mike Gorenstein, CEO of Cronos Group.
The partners have identified Colombia as being a global leader in topical agricultural production, and has marked the country as being poised to play a pivotal role in the global expansion of the cannabis industry due to its strategic positioning in the Latin American and global markets.
Initially, NatuEra plans to develop its cultivation and manufacturing operations through a custom-built facility on 207 acres located in Cundinamarca, Colombia – a region well-known for having an environment and climate suited to the cultivation of cannabis. With the goal of creating the cannabis industry’s first Contract Manufacturing Organization in Latin America, the facility is expected to be designed to meet GAP and GMP requirements and standards for cultivation, extraction, manufacturing and export activities.
“By leveraging AGI’s expertise and Cronos Group’s cannabis know-how, NatuEra will enable Cronos Group to create a cultivation and manufacturing hub in Latin America for our global distribution channels in a manner that minimizes region-specific and execution risk,” said Gorenstein.
Under the terms of the partnership, each party will equally contribute the required capital to fund the construction of the facility, which remains subject to obtaining all necessary permits and approvals, and to fund the cost of operations.
Each party also will bring their own unique strengths to the venture, combining Cronos’ operational expertise in the production and global commercialization of medical marijuana and associated products, with AGI’s expertise in industrial scale cultivation, meristem laboratory operations, and local market knowledge.
“We are very excited to partner with Cronos Group in establishing the cannabis industry’s first CMO,” said Andres Nannetti, executive chairman of NatuEra. “Cronos Group has a demonstrated an ability to generate enormous value in a short period of time. Their deep domain expertise, extensive global distribution network and stellar industry reputation will accelerate the growth of NatuEra as we position the company to serve the needs of Cronos Group and other leading global cannabis producers.”
Nicolas Nannetti, CEO of NatuEra added, “AGI’s process-driven approach to agriculture is perfectly suited to the challenges of producing high-quality cannabis and a true differentiator in today’s market. We are proud that Cronos Group recognized this value in choosing us as their partner, and we look forward to creating in NatuEra a CMO that will support the growth of the global cannabis industry.”
-Lynda Kiernan