Happy New Year from Meros! (and a quick update on where we are!)

Happy 2021 to all our friends, clients and associates!

The corona pandemic this past year has forced us to pivot, to improvise, to adapt …but after an initial scramble to get all our online tools in place, we believe this year has been opportunity to try new approaches, to innovate and to ultimately become a stronger company than ever.

2020 only demonstrated more clearly than ever the need for strong, flexible and sustainable food and ag supply chains. Impactful investments in food and agri technologies and partnerships with smart and innovative start-ups are more essential than ever for our clients and partners.

Although we have not been able to travel as much as we used to, Meros continues to provide strong support for our clients and partners by fully utilizing the domestic and overseas networks we have developed over the years.

We hope all our clients and network have also been able to find opportunities in the chaos and we look forward to helping you all as you prepare to move forward.

We look forward to working with you again in this upcoming Year of the Cow!

Note: Team Meros’ response to the Dec 2020 State of Emergency (SOE) in Japan

Meros is making every effort to prevent the spread of infection within our global team and our local communities.  We encourage remote work for all employees and emphasize good ventilation and disinfection in our offices.  In Tokyo we expect all of our team to work remotely at least three days a week and encourage fully remote when possible.

Our company phones are still open, but email will be the fastest and most reliable way to contact us. We look forward to talking to you online!

The Development Bank of Japan (DBJ) first Asian investor into US-based Equilibrium’s Agriculture Impact Fund

The Development Bank of Japan (DBJ) announced on November 19, 2020 that it will become the first Asian investor into US-based agricultural impact fund Equilibrium’s Controlled Environment Foods Fund II. This is Equilibrium’s second fund investing in large-scale controlled environment agriculture.

Meros has been fortunate to work alongside the DBJ team over the past year to help identify international agricultural impact investing trends and their impact on agricultural industries. We have also helped to outline the diverse challenges and investment and financing landscape facing Japanese agriculture that may potentially be addressed by agricultural impact funds in Japan. The last two years in particular have seen increased interest in the importance of impact and ESG investments in international farmland and agriculture supply chain investment, with ever-evolving discussion about how to measure and assess the impact of these investments.

Equilibrium Capital, the Pioneer of Agricultural Impact Fund Investing

Equilibrium is a US impact investment fund management company that creates investment opportunities with a focus on sustainability for institutional investors. The company is currently developing infrastructure investment funds for large-scale environmentally controlled agriculture and agricultural wastewater treatment projects. Founded by Dave Chen in 2008, the company is a pioneer in US impact investing.

In 2018, it launched the , the world’s first impact investment fund dedicated to large-scale, environmentally controlled agriculture, raising US$336 million and within one year, Equilibrium was operating over 100 hectares of greenhouse operations. CEFF II is now its second fund.

Equilibrium aims to create impact at every stage of the project. On the production side, the advantages of controlled environment farming are seen as efficient use of limited farmland, no soil runoff problems, less pesticide use, a better environment for workers compared to open field farming, and higher productivity, while reducing the need for irrigation. In terms of distribution and consumption, the peri-urban location of their greenhouses reduces logistics costs and carbon dioxide emissions in the distribution process, preserving freshness and providing nutritious food, reducing food waste, and improving food safety. The fund’s greenhouse operators are asked to align their businesses with Equilibrium’s goals, which include both growing efficiency and increased yields, as well as compliance with international food safety standards (GFSI) and working with retailers and freshness preservation technology companies to reduce packaging materials.

Development Bank of Japan (DBJ) and Sustainable Investment in Agriculture

By becoming an LP in Equilibrium’s fund, DBJ aims to obtain a deeper understanding of global trends in the agri-food sector, acquire advanced know-how, and contribute to the future growth of Japan’s domestic agricultural and food industries by sharing the knowledge gained from this investment with industries in Japan. Mr. Takuya Ogawa, Director of Corporate Finance Department 3, a core member of the DBJ team, commented: “We hope to achieve a more sustainable society through financial support to the food and agriculture sector and gain a deeper understanding of sustainable agriculture as advocated by Equilibrium and CEFF II.

As a government-funded financial institution, DBJ’s mission is to act in the public interest when selecting investments, and thus has a strong affinity with Equilibrium’s mission, sharing a philosophy of sustainable environmental, labor and social structures along the food chain, and impact investing in the food and agriculture sector.

Japanese Institutional Investors Already Moving into ESG Investing in Food, Agriculture and Farmland

While DBJ is the first to invest in an agricultural impact fund, Japanese institutional investors have already been moving into farmland investment. Nippon Life’s announcement in 2018 of an investment of approximately 10 billion yen in an overseas farmland investment fund managed by Hancock Natural Resources, a member of Manulife Life Group, is believed to be the first farmland fund deal by an Japanese institutional investor. According to their press release, Nippon Life Insurance expressed interest in how the fund can contribute to stable food supply through the environmentally friendly operations of farmland. The investment was positioned as an initiative within Nippon Life’s ESG-related investments and loans which total 200 billion yen. Hancock Natural Resource Group has a long history of investing in farmland, but in recent years, it has been focusing on more on sustainable practices in farmland operations, and in January of 2020, it announced the development of an ESG evaluation criteria for farmland operations, called Leading Harvest, together with several other large farmland investment funds.

As awareness of both ESG investing and impact investing grow in Japan, we look forward to Japan’s leading investors increasingly playing a role in global impact funds and bringing the lessons of sustainable farmland operations and impact investing to address Japan’s own agricultural challenges.

New launches and trends in the Japan CBD scene

Last summer, Meros discussed the state of CBD in Japan. But nearly every week there are new launches and updates in Japan. We have been following trends in Japan’s CBD sector closely and here are a few of the recent highlights!

New CBD restaurant opens in Ginza

A concept restaurant called Today’s CBD by ONE-INCH just opened in Ginza this September. The restaurant is open three days a week, Wednesday through Friday, and a different chef is in charge each night. There is a regular menu, but in addition, the day’s chef adds daily specials to the menu each day. CBD is included in the condiments and CBD drinks are also offered.

New CBD specialty store opens near Shibuya

CBD (coffee) is a specialty CBD store that opened in Komaba Todai-mae in September. The store offers smoothies and coffee which include CBD oil. First you choose a drink, then you select the type and concentration of CBD to add. Each brand of oil is unique –  some are tasteless and odorless, while others have a hemp flavor. You can also enjoy the drinks on their own without and CBD added. The shop also sells CBD products such as CBD vapes and gummies.

New CBD beauty brand has launched in Japan

Japanese company Balanced (株式会社バランスド) has just launched a CBD brand called Walala and announced its first product, a CBD face cream, using synthetic CBD. In order to create a 100% legal CBD brand in Japan, they decided to use only chemically synthesized CBD for their products. Although CBD derived from cannabis stem and seed is not illegal in Japan, Balanced couldn’t find a partner who could provide CBD to their standards so they decided to use chemically synthesized CBD instead. All products are manufactured at their Japanese factory. In the future, they plan to sell products to beauty salons, esthetic salons, and massage parlors, as well as developing CBD products such as supplements and oils.

Follow Meros on social media for other updates on CBD trends in Japan and any new and interesting launches we find next!