Curaleaf Deepens International Cannabis Supply Chain With Expanded Cannara Deal, UK Partnership

By Nicolás Rodríguez, Managing Editor

Curaleaf Holdings (TSX: CURA) (OTCQX: CURLF) is expanding its international cannabis supply chain on both sides of the Atlantic, increasing the size of a Canadian cultivation agreement while adding another manufacturing and distribution partnership in the United Kingdom.

Cannara Biotech (TSX: LOVE) (OTCQX: LOVFF) said Monday that it expanded its long-term international supply agreement with Curaleaf International, increasing the potential aggregate contract value to approximately C$34 million over two years if fully realized.

That compares with up to C$21 million under the agreement announced in July, an increase of roughly 62%. The contract is based on committed supply volumes and other terms of the agreement.

The expansion gives Cannara a larger outlet for Québec-grown cannabis destined for international medical markets while giving Curaleaf additional supply to feed its overseas distribution network.

“The expansion of our agreement reflects the strong relationship we are building with Curaleaf and the quality of the cannabis we have supplied from our Valleyfield facility,” Cannara CEO Zohar Krivorot said.

More of Valleyfield Goes to Work

The expanded agreement also provides another use for Cannara’s existing cultivation infrastructure.

Cannara now has 15 of the 24 grow rooms at its Valleyfield facility active, according to COO Niko Sosiak. The company says its build-out is fully funded, leaving additional capacity that can be activated as demand increases.

The original Curaleaf agreement was Cannara’s first long-term international supply commitment. When it was announced in July, Cannara had 14 of Valleyfield’s 24 cultivation zones operating and planned to activate four more by the end of fiscal 2027. The expansion was expected to take annual production capacity to approximately 75,000 kilograms.

Cannara already has significant unused infrastructure beyond its currently operating rooms. Its two Québec facilities span more than 1.6 million square feet and provide potential annualized cultivation output of approximately 100,000 kilograms.

“This expanded agreement demonstrates our ability to grow within the cultivation infrastructure we already own at Valleyfield,” Sosiak said.

For Cannara, the international business is being added alongside a profitable Canadian operation. In its fiscal third quarter, the company reported C$31.8 million in net revenue, C$13.4 million in gross profit before fair-value adjustments and C$8.5 million in adjusted EBITDA.

EU-GMP Is the Bridge

The arrangement also illustrates how international cannabis supply chains can require more than simply growing flower in one country and shipping it to another.

Curaleaf is supporting Cannara’s effort to obtain EU-GMP certification for the processing center at Valleyfield. Until that certification is obtained, flower supplied under the agreement will be dried and processed under EU-GMP conditions at Curaleaf’s certified Canadian facility before being released into international medical markets.

That puts Curaleaf between cultivation in Québec and regulated medical markets abroad: Cannara supplies the flower, while Curaleaf provides compliant processing and access to its international distribution infrastructure.

The model is increasingly visible elsewhere in Curaleaf’s international operations.

Curaleaf Adds Another UK Supply-Chain Partner

Days before Cannara announced the expanded agreement, Curaleaf Laboratories and Vericura announced a separate agreement covering medical cannabis manufacturing and distribution in the United Kingdom.

Under that arrangement, Curaleaf Laboratories will manufacture Vericura’s medical cannabis products in the UK to GMP standards, while Vericura will define the products and specifications. The companies are combining Vericura’s sourcing capabilities with Curaleaf’s manufacturing, quality assurance and distribution infrastructure.

“As healthcare professional and patient demand for cannabis-based medicines continues to grow, ensuring a secure, reliable, and efficient supply chain has never been more important,” Curaleaf Laboratories Managing Director Richard Hodgson said in BOC.

For Vericura, the attraction is Curaleaf’s ability to take sourced products through manufacturing and into the market.

“Our focus has always been the product itself, cannabis-based medicines built to a genuine pharmaceutical standard,” Vericura Managing Director Robert Maxwell said. “What this partnership adds is reach.”

The Vericura agreement is also not an isolated move. Curaleaf Laboratories has entered other UK partnerships that combine third-party cultivation, formulations or intellectual property with its manufacturing and distribution infrastructure, including agreements with Portugal’s Herdade das Barrocas and Germany’s Sanity Group.

Taken together, the Cannara and Vericura agreements show Curaleaf expanding different pieces of the same international infrastructure: securing additional cultivation supply in Canada while using regulated manufacturing and distribution capabilities to move medical cannabis through markets such as the UK and Europe.