Rising High: Exclusive talk with decocainized coca leaf company Power Leaves

In this edition of “Rising High,” The Fly conducted an exclusive interview with Pat McCutcheon, Co-Founder and Chief Executive Officer of Power Leaves, a manufacturer and international distributor of decocainized coca leaf derivatives. Here are some highlights:

DECOCAINIZED COCA LEAF: Power Leaves has developed the first-ever legal Colombian supply chain for decocainized coca extract through an exclusive agreement with an Indigenous community. The company is developing and manufacturing proprietary formulations of decocainized coca extract and essence that offer an exceptional taste profile and have the potential to serve as an all-natural source of protein, nutrients, and health benefits. “The key for our go-to-market strategy is wholesale large-scale manufacturing of decocainized coca extracts, which are then used as flavor ingredients for different food and beverage product applications,” McCutcheon said. “Our major differentiation is the relationship that we have with our Colombian indigenous partners. We are the first and only company in Colombia that has the support and relationships locally with the indigenous, that can legally harvest and commercialized the coca leaf, and the Colombian government supports us with the certifications we need to move the decocainized extract out of the country.”

He noted Power Leaves is purely focused on decocainized non-alkaloid or non-drug containing products, similar to Coca-Cola’s (KO) use of the coca extract. “We play in the food and beverage space and we absolutely do not touch the legal drug space whatsoever,” the CEO said. “A lot of people assume that we are looking at nutraceuticals or drug-related products, but we are doing the exact opposite, non-drug containing food and beverage ingredient products that everyone can consume internationally with very little regulatory hurdles to move the product.”

The company has a patent-pending decocainization process, he said, which was created roughly two years ago. “We actually figured out the process with our science team in an international lab, using different alkaloid or coca-based derivatives,” McCutcheon said. “We proved the process lab-scale initially and then we applied this decocainization in the labs. We do a simple primary extraction with ethanol, purified water, and with the dried coca leaf and then once we have the basic crude coca extract, we put it through a unique combination of filters and resins. We then decocainize the product to very low detection amounts, non-detectable at parts per million. Once you prove you can create a decocainized crude extract – with alkaloids undetectable in parts per million – that gives you the ability to qualify for the GRAS certification in the U.S. to then import this product as a GRAS-certified product.”

COCA PRODUCTS: Colombian indigenous communities have been using the decocainized coca extract for thousands of years, the CEO said, as it is an all-natural high-source of protein that is rich in essential minerals with a low cost of production. “The indigenous have used the extract for thousands of years on a small scale for appetite suppression, upset stomach and reduction of elevation sickness,” he said. “One of the things that we are now leveraging in our partnerships with major food and beverage companies is that utilizing our extract and essence gives them the ability to significantly reduce sugar with its sweetness enhancement and bitterness reduction functional elements. One of the things that we are really focused on is bringing our extract and essence products to market across a number of novel applications in food and beverage internationally. “

Power Leaves offers different decocainized coca leaf derivates including Coca Extract, Coca Essence, DeCarb and Coca Fertilizer, McCutcheon said. “Primarily we focus on the extract being an additive for energy drinks, sparkling waters and different functional beverages that are non-alcoholic,” he said. ‘The Coca Essence is an ethanol-based product. This is the first time it is being released to international consumers in the food and beverage industry as Coca-Cola and their supply chain never offered an alcohol-based product. Our coca essence is a 70%+-ethanol-based containing spirits additive. It’s a great flavor modulator and enhancer to different spirit applications, like vodka, gin, tequila and ready-to-drink alcohol-based products.”

The company also plans to offer DeCarb, a natural plant-based coca extract to reduce caffeine bitterness, which is currently under development, the CEO said. “Our DeCarb product is made up of one of the elements that we isolate from our Coca Extract product,” he said. “DeCarb itself isolates the sweetness-enhancing and bitterness reduction elements of the Coca Extract liquid and gives product development teams that we sell to the opportunity to explore new products with reduced sugar and the reduction of bitterness of the caffeine in their end product.”

Power Leaves has also produced three different Coca Fertilizer prototypes to facilitate large-scale crop testing trials, McCutcheon said. “We have done a lot of research and development in-house on our Coca Fertilizer,” he said. “The plant has been used for hundreds of years by the indigenous to enhance crop growth and increase yields and productivity of different plant applications. The fertilizer project is focused on the domestic Colombian market. What we do is we use our waste streams to create a coca nucleus that can be added to general fertilizer to enhance efficacy. It is a unique way we look at sustainability and utilization of all the waste streams of our supply chain. We are in the earlier stages of understanding the enhanced efficacy and working with a short list of universities now, but it is a great opportunity to add value to the indigenous coca leaf supply chain.”

INDIGENOUS COMMUNITY AGREEMENT: Power Leaves has an exclusive 15-year agreement with the Nasa WALA Indigenous Community to manufacture proprietary formulations of coca extract. “This is absolutely the core and the major differentiating factor of how we have positioned ourselves as an international Canadian company that works within Colombia,” the CEO said. “We signed an exclusive deal to work with the Nasa Communities within their community territory region. The only way this project and the supply chain could be legally approved is to work within the communities to receive leaves from community partners and then do the extraction and decocainization before the product is taken out of the community itself.”

It is illegal to take any product containing alkaloid outside of community territory in Colombia, he noted. “It took years to find exclusive agreements but after consulta popular, which is basically a vote across the region, the partnership was approved by the Nasa community,” McCutcheon said. “We had a very high support of the project, just over 98% in fact of the community indigenous people and their leaders supporting the opportunity. This is the backbone and DNA of Power Leaves and we are the only company that has been successful incubating a relationship like this in Colombia.”

PARTNERSHIPS: In July, the company announced a partnership with Abstrax to bring coca leaf to the U.S. cannabis and beverage market. The collaboration aims to create a variety of products that harness the flavor and functional properties of coca leaf derivatives and Abstrax will lead the distribution of Power Leaves’ products across U.S. cannabis and select beverage channels. “We are really excited about our relationship with Abstrax,” the CEO said. “Abstrax is a very well-known and well-respected flavor house in the cannabis space. We feel that the company, as a leader in cannabis flavoring and beverages for unique botanical combinations, offers a great partnership. Abstrax is an incredibly sophisticated platform from an analytic and product development perspective and they are a great partner for us to start working within the cannabis sector for new products that can be distributed across the U.S.”

McCutcheon added Power Leaves has received a significant inflow of partnership opportunities and evaluates a few factors when assessing a business for potential collaboration. “When we put our clients through a vetting process, we really look for significant brand adhesion and the ability of our partner companies to bring new products and SKUs to market and differentiate themselves,” he said. “That brings more value to Power Leaves as a company, to our go-public strategy and as we evolve as a small commercial producer of wholesale manufactured decocainized coca leaf extracts.”

PUBLIC LISTING: In March, Power Leaves announced it entered a non-binding letter of intent with Rockshield Acquisition Corp., which outlined key terms under which Rockshield will acquire all issued and outstanding securities of Power Leaves through a reverse takeover transaction. In connection with the transaction, the company will apply to list its common shares on Cboe Canada. “We expect to be listed in mid-to-late September and we’re really excited for a number of reasons,” the CEO said. “Obviously from a perspective of continued financing of the project, which gives us the ability to accelerate our scale-up for production and operations and volume output to our supply partners. It is also a major advantage to reducing the stigma and enhancing the communication to the public about how you can use coca extract from our partners in the indigenous territory.”

SCHEDULING: When asked about cocaine being listed as a Schedule II drug under the Controlled Substances Act in the U.S., McCutcheon said there is still a very significant stigma associated with coca-related products. “That has created incredible damage for the indigenous communities and to the perspective on the Colombian drug position in the world,” he said. “To be clear, Power Leaves has nothing to do with the alkaloid or cocaine, either extraction or distribution. We in fact destroy 100% of all the alkaloids contained in the extract and then we have that tested by a third party registered and certified lab in Colombia.”

The CEO added from a business development standpoint, the company has had to face the challenge of the stigma when working with bigger companies. “We’re really in the first phase of engagement and we built a very significant regulatory package that defines our supply chain and proves our product in fact contains zero alkaloid,” he said. “We definitely work on a borrowed element from Coca-Cola in terms of how they have taken the decocainized extract from Peru and moved that to over 220 countries around the world. We feel that bringing that to our customers and then their consumer base really helps to achieve reduction of that stigma.”

CHALLENGES: When asked about the largest hurdles facing the coca leaf space, McCutcheon pointed to the stigma surrounding the industry. “It has been virtually impossible to achieve a supply chain without working so closely with the indigenous that have a legal ability and a legal decree in Colombia to harvest and commercialize the coca leaf,” he said. “The stigma still exists and we really faced into that in the early stages of the relationships of working with our commercial partners. It’s very clear that without the relationship with the Colombian indigenous community, it is basically impossible to access the coca leaf legally. As we accelerate the project and evolve as a company, it will take time as there are several different challenges from the perception and from the perceived requirements that a lot of companies have that the product may have drug in it. But we will break that challenge by proving that our science has executed and achieved an end product with no alkaloids.”

OPPORTUNITIES: As the coca leaf space develops, the CEO said he sees the biggest opportunities in the ability for consumers to taste coca leaf in products outside of sugary cola beverages. “It is a market that has not yet been tapped into as Coca-Cola has never branched out into any other products with coca leaf extract,” he said. “The opportunity lies in the dynamic product delivery and applications. The more we learn about the functional elements in the decocainized coca extract, we find they’re very significant and you can create a much healthier beverage with less sugar and a number of functional outcomes. Specifically, the sweetness-enhancing and bitterness reduction elements for caffeine-containing products offers a massive product category for the coca leaf extract. I think this is truly where you’ll see an industry be formed.”

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Ascend Wellness (AAWH), Atai Life Sciences (ATAI), Aurora Cannabis (ACB), Ayr Wellness (AYRWF), Avant Brands (AVTBF), BZAM (BZAMF), Cannabist Company (CBSTF), Cannara Biotech (LOVFF), Canopy Growth (CGC), Chicago Atlantic (REFI), Clearmind (CMND), Clever Leaves (CLVR), Compass Pathways (CMPS), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON), Curaleaf (CURLF), CURE Pharmaceutical (CURR), CV Sciences (CVSI), Cybin (CYBN), Delta 9 (DLTNF), Entourage Health (ETRGF), Enveric Biosciences (ENVB), Fire & Flower (FFLWF), Flora Growth (FLGC), Trees Corporation (CANN), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Hemp (HEMP), Heritage Cannabis (HERTF), High Tide (HITI), IGC Pharma (IGC), IM Cannabis (IMCC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), InterCure (INCR), Lotus Ventures (LTTSF), Lowell Farms (LOWLF), Lucy Scientific Discovery (LSDI), MediPharm (MEDIF), MedMen (MMNFF), MindMed (MNMD), NewLake Capital (NLCP), Numinus (NUMIF), Optimi Health (OPTHF), Organigram (OGI), Planet 13 (PLNHF), Red White & Bloom (RWBYF), Relmada Therapeutics (RLMD), Reunion Neuroscience (REUN), Revitalist (RVLWF), RIV Capital (CNPOF), RYAH Group (RYAHF), Safe Harbor Financial (SHFS), 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), Vireo Health (VREOF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).