Rising High: Exclusive talk with coca leaf company Harbour Coca

In this edition of “Rising High,” The Fly conducted an exclusive interview with David Craig, co-founder and chief executive officer of Harbour Coca, a Canadian-based company focused on bringing the benefits of the coca leaf to global markets. Here are some highlights:

COCA LEAF EXTRACT: Harbour is the first Canadian company to bring active and non-active coca leaf extracts and derivatives to market. Through groundbreaking agreements with the South American Peruvian Coca Authority, the company has secured the ability to import an unrestricted volume of coca derivatives into Canada for processing and application across various industries. “Harbour is providing an end-to-end supply chain resource with a legal supplier and cultivator,” Craig said. “We are importing these coca leaves into North America in accordance with UN-sanctioned regulations. We’re disrupting and growing multi-billion-dollar industries in pharma, food and beverage, nutraceuticals and sustainable agricultural fertilizer as the only Canadian-based coca leaf importer.”

The coca leaf has been used for over 4,000 years in the Andean culture of South America, he said, and has a multitude of health, medicinal, commercial and consumer uses. “There has really been a monumental shift in terms of social policy,” the CEO said. “Governments are investing very heavily in educating people and communities on how to safely prepare to rediscover the compounds found in the coca leaf. The coca plant is experiencing renewed interest in both nutraceutical and pharmaceutical and Harbour is poised to tap into trillion-dollar markets with novel applications of the coca leaf. “

The company is developing relationships with multiple blue-chip companies in both pharma and consumer goods, he said, as well as formulating its own line of products which includes a coca leaf plant protein, a coca supplement blend for health and vitality and nootropic beverages. “We’re working on major brand collaborations using novel coca leaf ingredients for nutraceutical, food and beverage and our own exclusive line of CPG products,” Craig said.

SOLE CANADIAN IMPORTER: In July, Harbour became the first company to successfully import decocainized coca leaf extract into Canada and since then, has successfully completed a secondary importation on an expedited basis. “We signed a historic agreement with the authorized state-run producer out of Peru,” the CEO said. “It was also historic bringing the coca leaf extract into Canada, the first time it has been done legally, and we have an unrestricted volume of coca leaf extract that we can bring into the country.”

The international trade agreement signed with ENACO in April will enable Harbour to bring products into market at scale, he said. “We have, over the course of the better part of the year, negotiated that arrangement with them to become their agent for Canada and we have the opportunity to sell into markets all over the world,” Craig said. “Being able to bring the product into Canada has really just unlocked the monopoly that has been held by one company for over 130 years, Coca-Cola (KO). Harbour has broken that monopoly and is now introducing coca leaf as derivative products for beverages, foods, protein products, nutraceuticals, supplements and as agricultural fertilizer.”

PRODUCT DEVELOPMENT: Harbour has been focused on a very specific path for product development, the CEO said, beginning with in-house brands the company plans to bring to market. “We have some very strong partners, who are actually seasoned pros at bringing functional lifestyle brands to market to the tune of over $140M in revenue,” he said. “We engaged those individuals to help us develop brands that would be as powerful as that in terms of driving revenue. For the second stage, we have engaged in discussions with several blue-chip consumer brands, that already have the brand adhesion out in the marketplace, to introduce our products to reach a wider consumer market.”

The company has also launched itself into three main verticals for the coca leaf industry: active pharmaceutical ingredients, consumer product goods and fertilizer ingredients, Craig said. “There are two sides of the business and a couple of verticals,” he said. “There is the API side, where studies have shown that the active compounds within the coca leaf support diet and weight loss, the potential for effective ADHD medication, some local anesthetics and some inflammatory medications. It can also be used for surgeries where vasoconstriction in the capillaries is necessary to reduce excess bleeding. Those are the pharmaceutical benefits.”

Harbour offers natural, non-synthetic, coca alkaloid compounds to pharmaceutical customers for use in the medical field under their independent Health Canada approved licenses, the CEO said. “The pharmaceutical industry is of course huge and growing,” he said. “The fact that coca leaves offer all plant-based benefits make them very attractive in the marketplace for pharmaceutical.”

Coca leaf extract also offers multiple biofunctional benefits making the plant appealing for nutraceutical products, Craig said. “It allows people to focus a little more and provides a natural energy boost,” he said. “That is unique in the marketplace in that it is plant-based and elicits energy without the use of caffeine, as well as offers biofunctional general benefits for health and wellness.”

The CEO noted that coca leaf extract is very desirable in the marketplace for its light and invigorating flavor profile, which has been monopolized by Coca-Cola. “It was the logical place for us to start in the food and beverage marketplace as in addition to the food and beverage flavor aspect, there are biofunctional benefits to the product,” he said. “The biofunctional food market is actually a very large addressable market so that was something that we wanted to move in the direction of.”

Craig added that coca-based organic liquid fertilizer has shown promise to produce plants with significantly higher yields to nitrogen fertilizer. “There are some unique differences in coca leaf than other sources of fertilizer,” he said. “The coca leaf has a high percentage of phosphorous and in many countries, there have been limitations placed on nitrogen as fertilizer due to its issues with greenhouse gases. There are all kinds of interest in developing fertilizers that are an alternate source to nitrogen.”

CAPITAL RAISE: In October, Harbour announced the launch of an offering of its common shares under Rule 506(c) of Regulation D for gross proceeds of up to $5M. In connection with the financing, Harbour has secured investments from New York-based venture capital fund ArcStone US Ventures as well as entrepreneur John Celenza, co-founder and former CEO of BioSteel Sports Nutrition. “Harbour has diligently navigated through the complex regulatory processes to set a new standard for expansion and growing implementation of coca leaf and derivative products,” the CEO said. “With the proceeds of the financing along with strategic partnerships with Arcstone and John Celenza, we will open up the power and the potential of the coca leaf extract to new and differentiated products. This represents a very unique opportunity as there are numerous benefits of the coca leaf, it’s sustainably farmed in abundance and it largely remains untapped.”

The coca leaf presents investors with a ground floor opportunity, similar to those seen in cannabis and psychedelics, he said. “Coca leaf and Harbour are right at the very first step of this opportunity,” Craig said. “I believe it to be as big, if not bigger, than what has proven itself out in cannabis or psychedelics. It’s a really, really exciting investment opportunity. We plan to use most of our capital raise to really build out the business, sales and marketing efforts and research to be able to support the benefits we are purporting for the coca leaf.”

SCHEDULING: When asked about cocaine being listed as a Schedule II drug under the Controlled Substances Act in the U.S., Craig said while there is a stigma associated with the plant, it is important to make the distinction between cocaine and coca leaves. He quoted ethnobotanist Wade Davis, PhD, who said, “Coca is not cocaine. To equate the coca leaf with the raw alkaloid cocaine is as misguided as suggesting that the delicious flesh of a peach is equivalent to the hydrogen cyanide found in every peach pit.”

The CEO noted coca leaves have been consumed for a millenia and have all kinds of biofunctional benefits. “It is disappointing that people have this stigma that it is dangerous or that it is addictive,” he said. “It’s a benign stimulant that’s beneficial to health and highly nutritious with no evidence of toxicity or addiction. It will take some time as people will have to warm up to the notion of all the benefits as this is new. Hollywood has really stigmatized the coca plant with a focus on only a very, very small part, 0.02% of the leaf versus the rest of the leaf. We think we can shine a light on how positive this leaf is and get it into the mainstream.”

CHALLENGES: When asked about the largest hurdles facing the coca leaf industry, Craig pointed to the lack of public understanding around the benefits of the plant. “There is some education that needs to happen for the reversal of the stigma that is associated with it,” he said. “As a company who has been able to uncover a legal path to market for the coca leaf, there are now the resources based on revenues that have been generated by bringing these products to market to be able to educate the general consumer. Resources are also available to engage the medical, biohacker, health and wellness community to rally around the effects and ultimately put out the message it is something that is very powerful, very positive and really deserves an opportunity to be introduced to the wider consumer market.”

OPPORTUNITIES: As the coca leaf space develops, the CEO said he sees the largest opportunity in bringing the benefits of the plant to global markets. “The biggest opportunity is to take this very exciting, very useful plant extract and really introduce it into North America first and the rest of the globe,” he said. “The coca leaf has essentially been locked in a box by one company, which has been highly successful. We see it as an absolutely huge market that is largely untapped, because it has been kept in a box by this one company. The discussions that we are having with major brands are all very exciting and they are all very eager to get their hands on our ingredients. The addressable market is over $1T in food and beverage, pharma and nutraceutical, so the sky is the limit really in terms of opportunity with the coca plant.”

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Aleafia Health (ALEAF), Acreage (ACRHF), Atai Life Sciences (ATAI), Audacious (AUSAF), Aurora Cannabis (ACB), Avant Brands (AVTBF), Ayr Wellness (AYRWF), Awakn Life Sciences (AWKNF), Body and Mind (BMMJ), BZAM (BZAMF), Cannara Biotech (LOVFF), Canopy Growth (CGC), Chicago Atlantic (REFI), Clearmind (CMND), Clever Leaves (CLVR), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON), Columbia Care (CCHWF), Compass Pathways (CMPS), CURE Pharmaceutical (CURR), Curaleaf (CURLF), CV Sciences (CVSI), Cybin (CYBN), Delic Holdings (DELCF), Delta 9 (DLTNF), Entourage Health (ETRGF), Enveric Biosciences (ENVB), Fire & Flower (FFLWF), Flora Growth (FLGC), General Cannabis (CANN), Goodness Growth (GDNSF), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Hemp (HEMP), High Tide (HITI), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), InterCure (INCR), IM Cannabis (IMCC), Wellbeing Digital (KONEF), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), Lucy Scientific Discovery (LSDI), MediPharm (MEDIF), MedMen (MMNFF), MindMed (MNMD), NewLake Capital (NLCP), Numinus (NUMIF), Organigram (OGI), Planet 13 (PLNHF), Reunion Neuroscience (REUN), Revitalist (RVLWF), RIV Capital (CNPOF), Relmada (RLMD), RYAH Group (RYAHF), Safe Harbor Financial (SHFS), Small Pharma (DMTTF), SNDL (SNDL), Sproutly (SRUTF), Skye Biosciences (SKYE), Stem Holdings (STMH), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Tryp Therapeutics (TRYPF), Verano (VRNOF), Village Farms (VFF), Wesana Health (WSNAF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).