The US food and beverage industry – valued around $1 trillion annually – is in constant need for innovation. The pandemic has further spurred an increased demand for healthy food and beverage choices combined with bold tastes. Market players are acquiring products and seeking partners who can fuel product line extensions for them through addition of novel ingredients blended into their products. Categories riding the innovation wave include non-alcoholic beverages (energy drinks), nutritional snacks, and specialized alcoholic beverages.

Coca leaf, without the alkaloids that constitute the narcotic ‘cocaine’, could very well be the next disruptive ingredient in the food and beverage innovation wars. Used for centuries and demonstrated to have a wide variety of positive attributes, coca is currently limited in its legal use by international laws and conventions. But there are viable ways to bring coca ingredients to market, and Power Leaves Corp. believes it has the elements in place to do just that. Armed with an exclusive supply agreement with indigenous cultivators, proprietary extraction technology to remove the narcotic from the leaf, and LOIs with major food and beverage brands, Power Leaves is poised to introduce coca as the newest flavorful, nutritious, and healthy additive.

History of Coca

In 1961, the United Nations put coca leaves and their derivative, cocaine, on its most restrictive schedule under the international treaty known as The Single Convention on Narcotic Drugs. The UN carved out a sliver of legality for indigenous populations in South America, who have been using the plant for thousands of years. Fast forward to 1977, and the United States Food and Drug Administration (FDA) authorized the use of decocainized coca leaves in the production and flavoring of food and beverages.

A Peruvian state-owned company saw the disconnect between the jurisdictions as an opportunity and established a near monopoly. By developing a vast network of legal indigenous Peruvian coca growers, the company has been able to supply dried coca leaf to Coca-Cola in the United States, about 100 metric tons annually.

Now, there is another player in this legally limited but incredibly lucrative market. Power Leaves Corp. has reached a unique agreement with the people of the Calderas reservation in Colombia whereby the two parties have committed to a 15-year initial collaboration. The Colombian people, bringing centuries of cultivation knowledge along with skilled labor and land perfectly suited to the task, will provide Power Leaves with 400 tons of coca leaf annually. Power Leaves brings advanced alkaloid extraction technology, international distribution channels, a very experienced team, and access to capital. The Colombian government supports it all. The plan goes far beyond supplying one company like Coca-Cola with coca leaves.

The Power Leaves Plan

The extract of coca leaf, without the alkaloids, has a variety of addressable markets. As with Coca-Cola, it can be used to flavor beverages. It can also be used as an ingredient in dietary supplements. Coca can be easily made into coca flour and powder to be used in foods. The plant also demonstrates a number of desirable characteristics, including appetite suppression, fat burning, and energy increase, that make it a compelling ingredient in plant-based medicines and nutraceuticals. Power Leaves, with its team of world class extraction scientists, has the capabilities to create proprietary custom extracts across all of these verticals. Each extract is tailored to specific client needs, enabling B2B partners to differentiate from their competition and grow their business significantly.

Power Leaves’ CEO and Chairman, Pat McCutcheon, previously helmed MediPharm Labs through its earlier stages of growth. MediPharm is one of the world’s largest cannabis oil producers, and McCutcheon’s experience there is directly translatable to the Power Leaves business. One of his strengths is successfully navigating the capital markets, securing funding in an industry that only recently became legal. At its zenith under McCutcheon’s guidance, MediPharm had a market capitalization in excess of $900 million. The two businesses are similar in a lot of ways. Both are highly regulated and restricted. Both derive active ingredients from a complex natural plant, utilizing advanced extraction technologies to achieve consistency and purity. Both have a wide array of customer types and uses for the products.

In preparation for the opportunity, McCutcheon has been living in Colombia for the better part of six months, finalizing contracts, assembling teams, and getting to know his Colombian partners. While building the Colombia end of the business, McCutcheon and his team have been busy initiating agreements with key food and beverage customers. And discussions are already taking place around the nature and attributes of potential custom extracts designed for specific customer uses.

The deal reached with the Calderas people was difficult to achieve and will be tough for others to replicate. Power Leaves is the first and only private commercial entity to sign a government approved exclusive license for the extraction, manufacture, and distribution of decocainized coca-based products. The only other company currently in the market is the Peruvian state company mentioned at the top of this article, with a very limited product range and customer list.

Power Leaves intends to build a much larger and more diverse business, and it can’t happen without the high level of trust and support developed with the indigenous communities of Colombia. There is a manufacturing site set up on the mountain, very near to the ~420 hectares (~1,040 acres) of coca plantations under the agreement. The location helps to keep costs down, supply chain issues minimized, and quality and freshness of product maximized.

The Upshot

There is much more to discuss with Power Leaves, and we will be doing just that in this space in the coming weeks. The science is interesting, the benefits for the indigenous communities are tremendous, the variety of potential downstream products is immense. For now, consider Power Leaves a compelling opportunity in a market with high barriers to entry but very lucrative potential rewards. Power Leaves has plans to go public in 2023 and is currently building the infrastructure to execute its expansive business model. Stay tuned.

Disclaimer

The above article is sponsored content. CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: http://www.cannabisfn.com/legal-disclaimer/

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