Canopy Rivers has agreed to partner with LeafLink in a joint venture to deploy the U.S. company’s cannabis business-to-business software platform to global markets.
Canopy Rivers invested an initial US$2 million in LeafLink Services International ULC and has the option to invest an additional US$6 million. LeafLink invested an initial US$1 million.
The initial investment gives Canopy, the venture capital arm of Canadian cannabis producer Canopy Growth Corp, an 18 percent stake in the joint venture.
Based in Los Angeles, LeafLink serves more than 950 U.S. cannabis brands. Its investors include Lerer Hippeau, Nosara and Casa Verde Capital.
LeafLink and Canopy Rivers Collaborate to Deploy Market-Leading B2B Software Platform Globally
New venture will launch LeafLink’s proprietary technology in international cannabis marketplaces
TORONTO, March 18, 2019 (GLOBE NEWSWIRE) — Canopy Rivers Inc. (“Canopy Rivers”) (TSXV: RIV) and LeafLink, Inc. (“LeafLink”) are pleased to announce the establishment of LeafLink Services International ULC (“LeafLink International”), a new venture that exclusively licenses and leverages LeafLink’s dominant business-to-business (B2B) marketplace and supply chain technology platform for deployment throughout regulated international cannabis markets.
LeafLink is a software-as-a-service (SaaS) marketplace that simplifies the supply chain through its e-commerce platform. The company has a growing network of more than 950 cannabis brands, and penetration throughout ~2,800 cannabis retailers across 16 territories in the United States. LeafLink has established the single largest B2B marketplace for cannabis brands and facilitates more than US$900 million in gross merchandise value annually. Retailers use LeafLink for managing their wholesale inventory, enabling them to shop multiple vendors in one cart, view up-to-date product and brand menus, review historical and open orders, discover new products, and request samples. LeafLink further serves vendors by offering supplementary tools such as order management, a customer relationship management (CRM) platform, inventory tracking tools, and customized reporting systems, among other services.
“We have been very impressed with LeafLink’s deep market penetration and their understanding of cannabis companies’ needs and behaviors,” said Narbé Alexandrian, President of Canopy Rivers. “The number of brands and products within our new cannabis economy has been explosive, making it difficult for retailers to deal with multiple parties in an increasingly fragmented market. As regulated cannabis consumption and distribution proliferates around the world, LeafLink International will introduce the industry’s leading SaaS-enabled marketplace to the global stage to create a new standard for expediting the cannabis supply chain in regulated markets.”
By creating this new joint venture, Canopy Rivers continues to expand its exposure across the cannabis value chain through a capital-light, market-leading B2B platform that is immediately scalable across legal jurisdictions. Canopy Rivers intends to integrate its network of complementary cannabis companies and global reach to drive growth for LeafLink International and assist in developing and deploying this technology as it continues to increase its global footprint.
“We are excited to join forces with Canopy Rivers – combining our industry-leading, B2B marketplace technology with their expertise and strategic network in the global cannabis market,” said Ryan G. Smith, CEO and Co-founder of LeafLink. “Together, we are creating the first seamless e-commerce experience across the global cannabis supply chain to further empower members of the LeafLink community.”
Under the terms of the agreement, LeafLink has made an initial capital commitment of US$1 million along with an exclusive, royalty-free license for all non-US marketplaces for their proprietary B2B software platforms and service solutions. Canopy Rivers has committed an initial equity investment of US$2 million and has the option to invest an incremental US$6 million on preferred terms. LeafLink and Canopy Rivers hold approximately 82%, and 18%, respectively, of LeafLink International after the initial transaction. Both parties will work collaboratively on the continued development and deployment of the LeafLink technology platform throughout international marketplaces, having already launched in select Canadian markets.
LeafLink is the cannabis industry’s leading wholesale marketplace, serving more than 950 brands and ~2,800 retailers across 16 territories with streamlined business tools such as an order management system, CRM, inventory tracking, and reporting systems, among others. Retailers who previously called, emailed, or texted dozens of sales representatives to place orders now save one day per week shopping all their cannabis brands in one LeafLink cart. Backed by venture capital firms and strategic investors such as Lerer Hippeau, Nosara and Casa Verde Capital, LeafLink has raised more than US$14 million to date, with its headquarters in New York City and Los Angeles.
About Canopy Rivers:
Canopy Rivers is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers works collaboratively with Canopy Growth (TSX: WEED, NYSE: CGC) to identify strategic counterparties seeking financial and/or operating support. Canopy Rivers has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth and collaborate among themselves, which Canopy Rivers believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem.
For further information, please contact:
Canopy Rivers Inc.
Sr. Director, Investor Relations & Communications