CEO Elise Coppens said AgraFlora is in “the best financial shape that it has been in over 24 months” after the sale of EIC and AAA Heidelberg
AgraFlora Organics International Inc (CSE:AGRA) (OTCMKTS:AGFAF) (FRA:PU31) CEO Elise Coppens told shareholders the “transformational sale” of two of its assets provided the company with the financial flexibility to look at entering more lucrative markets.
On Tuesday, AgraFlora struck an agreement to sell The Edibles & Infusions Corporation (EIC), an entity in which AgraFlora owns 43%, to Organigram Holdings Inc (TSE:OGI) (NASDAQ:OGI) (FRA:0OG) for $35 million.
Earlier this month, the Vancouver, British Columbia-based company which grows, distributes, and markets premium cannabis and cannabis-infused products, also struck a definitive agreement to sell its wholly-owned subsidiary AAA Heidelberg Inc (AAA) for around C$1 million in cash.
“It is always a difficult decision to sell a significant asset, however, the timing of our review of all company assets aligned well with the opportunity to receive the value that we did for this facility. Ultimately, the sale of AgraFlora’s share of EIC was a strategic decision,” Coppens said in a letter to shareholders.
“So what’s next, you may ask? With the proceeds from the sale of EIC, as well as from the recent smaller sale of AAA Heidelberg, AgraFlora is now in the best financial shape that it has been in over 24 months. The sale these two assets gives us the financial flexibility to look at entering more lucrative markets.”
Coppens noted that the resources also empower AgraFlora to redirect its focus toward generating meaningful revenue and growing cannabis at its Delta facility.
“More importantly, the proceeds enable us to evaluate future opportunities in Canada and the United States,” added Coppens. “The cannabis industry is evolving rapidly and I see a lot of potential south of the border, including but not limited to the recent embracing of recreational cannabis by the state of New York.”
He added that if the legalization of marijuana trend continued in the $22.9 billion US market, then “one of my goals is to position Agra to be a participant in that ever growing and developing landscape.”
“The moves we have made in the past few days will give AgraFlora the financial flexibility to not only develop our current assets but also to consider other potentially accretive acquisitions that we otherwise would not have been in the position to explore,” said Coppens.
“The Management and the Board of Directors are still evaluating AgraFlora’s other assets … As mentioned in the post-AGM business update presentation, my near-term efforts are focused on reshaping our company so it can capture maximum revenues and profits from its best assets.”
AgraFlora’s flagship Canadian asset is Propagation Services Canada, a large-scale commercial greenhouse in Delta, British Columbia focused on reshaping the Canadian flower market with high-potency, low-cost cannabis. In addition, AgraFlora’s wholly-owned subsidiary Farmako GmbH, is poised to become one of Europe’s leading distributors of medical cannabis.
About AgraFlora Organics International Inc.
AgraFlora Organics International Inc. is a leading cannabis company building shareholder value through the development of revenue generating operating assets in the global cannabis industry. AgraFlora is focused primarily on the Canadian cannabis industry – the world’s most advanced and regulated legal cannabis market. Its flagship Canadian asset is Propagation Services Canada, a large-scale commercial greenhouse in Delta, BC focused on reshaping the Canadian flower market with high-potency, low-cost cannabis. In addition, AgraFlora’s wholly-owned subsidiary, Farmako GmbH, is focused on becoming Europe’s leading distributor of medical cannabis. Farmako currently has active distribution operations in Germany and expects to commence active operations in the United Kingdom in 2021. For more information about AgraFlora, please visit agraflora.ca and its profile page on SEDAR at www.sedar.com.
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Except for statements of historic fact, this news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements including, but not limited to delays or uncertainties with regulatory approvals, including that of the CSE. There are uncertainties inherent in forward-looking information, including factors beyond the Company’s control. There are no assurances that the business plans for AgraFlora Organics described in this news release will come into effect on the terms or time frame described herein. The Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information identifying risks and uncertainties that could affect financial results is contained in the Company’s filings with Canadian securities regulators, which are available at www.sedar.com.