Company has diversified into projects related to pharmaceuticals, food and technology.
AgraFlora played the long game in Canada — and won
AgraFlora Organics International (OTCPK : PUFXF), based in Vancouver, Canada, has not only set out to create one of the largest and most efficient indoor cannabis growing facilities in the world, they’ve also committed to diversifying their business globally — to ensure continued value for their shareholders.
More than three years ago, AgraFlora began laying out a business plan to become one of the top producers in Canada and was able to seize both short, and long-term opportunities there. First came the immediate market for medical use, and then came the mainstream market, after legalization of recreational use in Canada, which happened in October 2018.
Today, under newly appointed chairman and CEO Brandon Boddy, AgraFlora Organics International is a growth-oriented and diversified company focused on the international cannabis industry. Boddy brings considerable pedigree to AgraFlora, as he was a co-founder of Auxly Cannabis Group Inc, which at its peak reached a market capitalization of over $1.8 billion. He has been mandated with accelerating AgraFlora’s licensed domestic production activities in addition to overseeing other value enhancing corporate initiatives. AgraFlora is publicly traded in Canada and Germany, and on the OTC markets in the United States.
AgraFlora’s main focus is on the operation of two cannabis cultivation facilities in Canada – AAA Heidelberg, a licensed indoor cultivation operation in London, Ontario, and their marquee asset – a joint venture interest in Propagation Services Canada and their large-scale 2.2 million square-foot greenhouse complex in Delta, British Columbia. Agraflora and its joint venture partner have been collaborating with Health Canada since June 2018, to prepare the large-scale, ready-made Delta greenhouse complex for licensing.
AgraFlora is hopeful that, pending final licensing, cultivation could begin later in 2019, with an estimated initial phase 1 production capacity of approximately 8,000 pounds by year’s end, which could generate up to $70 million CAD (about $52.1 million USD).
A keen eye for value creation and strategic partnerships
What sets AgraFlora apart in the cannabis sector is an unwavering focus on science and innovation, and a mission to consistently produce quality, potent products that exceed the expectations of their customers. Another factor that contributes to AgraFlora’s success has been its ability to create tertiary value for shareholders and its keen eye for strategic partnerships. As the Company navigated the Canadian cannabis-licensing regime, AgraFlora’s team scoured Canada and the rest of the globe in search of additional opportunities. Ultimately, this resulted in the creation of two different offshoot companies – Cannvas MedTech and Natures Hemp – that were spun out to shareholders of AgraFlora via share dividend and thus offered additional value realization for stakeholders.
When it comes to choosing strong partnership candidates, AgraFlora has consistently excelled. Case in point is a recently inked strategic commercial rights and off-take agreement with ICC International Cannabis Corp. (OTCPK: WLDCF), who’s corporate mandate is focused on, as the name might suggest, the burgeoning international cannabis marketplace. ICC is developing a framework for cultivation, extraction, formulation and distribution of cannabis and boasts touch-points in the United Kingdom, Denmark, Poland, Switzerland, Germany, Macedonia, Bulgaria, Serbia, Croatia, Greece, Italy, Portugal, Malta, Colombia, Argentina, Australia, South Africa and Lesotho. Pursuant to the terms of the off-take agreement, ICC may purchase up to 225,000 pounds of premium dried cannabis flower from AgraFlora’s Delta greenhouse complex cultivation operations over a five-year term.
This is a prime example of a synergistic partnership in that AgraFlora is able to play to its strength in utilizing its large-scale cultivation potential while allowing ICC to leverage its advanced global downstream capabilities, including its European distribution footprint of 80,000 pharmacies and 300,000 retail end points to market premium cannabis under the company’s diverse brands and banners. The strategic off-take agreement evidences further alignment of AgraFlora and International Cannabis Corp, as they had previously entered into an arrangement whereby AgraFlora transferred its portfolio of unique Colombian cannabis genetics to ICC.
The world’s second-largest cultivation operations under glass
While AgraFlora was in queue for their cultivation license at the AAA Heidelberg facility, and never ones to rest on their laurels, they joined forces with the Houwelings Group, a company with decades of experience cultivating tomatoes at massive scale. From the start, both companies recognized the potential of such a partnership — they combined the science and 50 years of large-scale produce growing expertise of the Houwelings Group with the cannabis industry and capital market knowledge and experience of AgraFlora. They ultimately formed Propagation Services Canada.
The joint venture unites the talent and skills of both companies, which they put into action by converting an existing tomato greenhouse complex in Delta, British Columbia, into their large-scale cannabis cultivation operation.
Once the greenhouse is complete, it will be one of the most efficient in all of Canada. The Delta complex boasts advanced technology operating heating, ventilation and air conditioning, water and lighting, its own natural gas energy plant and a prime location.
Delta Organic Cannabis Corp, a privately held Toronto-based investment company, invested $40 million CAD (nearly $30 million USD) in the project, in the form of an equity participation and earn-in agreement.
The Propagation Services Canada team is working aggressively on the greenhouse project:
- They’re preparing 250,000 square feet of flowering and propagation plants, expected to be ready by summer 2019.
- Completion of the greenhouse conversion is expected sometime in 2020.
- The entire complex will have 2.1 million square feet of growing space with an annual capacity of approximately 114,000 pounds of cannabis at scale.
Members of the editorial and news staff of the USA Today Network were not involved in the creation of this content.
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