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New Leaf Venture investment organization sells cultivation assets

(Globe Newswire) Vancouver—Management and investment organization, New Leaf Venture Inc., dedicated to advanced stage operations in the North American cannabis sector announces that an oversaturated market has led to the decision to sell cultivation assets and downsize related personnel. This includes the dissolution of a master lease on a cultivation facility through its wholly owned subsidiary New Leaf USA.

Numerous factors, including pandemic related causes, created an oversaturation of biomass leading to lower margins and sales volume. The operational focus is therefore shifting from production and cultivation to increasing the strategic focus on NLV’s growth-oriented distribution model in order to reduce overhead, add capital and stabilize margins.

“We are finding high quality biomass for less cost than we can grow in our facility. There are dozens of partner farms that do incredible jobs at growing biomass that don’t have the distribution capabilities and brand reach that we can perform. By eliminating the cost fluctuation of oversaturation and harvest yields we can purchase at a fixed cost. This allows us to control our margins. Also, with a focus on ancillary products the cost of active THC and CBD distillate continues to go down making these products more profitable.”—Boris Gorodnitsky, President & Co-Founder, New Leaf USA & Director, New Leaf Ventures Inc.