AgraFlora Organics International Inc.
(“
AgraFlora” or the
“
Company”) (
CSE: AGRA) (Frankfurt:
PU31) (OTCPK: AGFAF), a growth oriented and diversified
international cannabis company, is pleased to announce the Company
has acquired 100 per-cent (100%) of the issued and outstanding
shares of The Good Company GmbH (“The Good Company”). The Good
Company is the parent company of German EU-GDP medical cannabis
distributor, Farmako GmbH (“Farmako”).
Farmako is a leading European medical cannabis distributor,
headquartered in Frankfurt, Germany, with affiliated companies in
the United Kingdom (“UK”), Luxembourg and Denmark.
GERMANY
Farmako is equipped with the following German and European
industry certifications and distribution licenses, affording the
Company unparalleled access to Germany’s geometrical growing
medical cannabis marketplace:
- Medical wholesale distribution license under German Medicines
Act (“AMG”);
- Permit for Narcotic Drug Handling as per German
Betäubungsmittelgesetz (“BtMG”); and,
- Certificate of EU-Good Distribution Practice (“EU-GDP”).
Farmako has realized revenues of over C$2,326,000.00 throughout
the 2019 fiscal year and has succeeded in capturing an eight
per-cent (8%) market share of Germany’s burgeoning medical cannabis
arena, boasting the highest capital efficiency and positive EBIT
margins within the industry.
Farmako’s German distribution network extends over 19,800
pharmacies and comprises an aggregate patient population of over
100,000 unique individuals.
Germany's medical cannabis laws were introduced
in March 2017 and the country is poised to become one of
the largest federally regulated medical cannabis markets in the
world. The German patient population for medical cannabis is
experiencing exponential growth, with over 100,000 patients now
active; an increase from approximately 800 in 2017. According to
market data from Insight Health, each eligible German patient is
prescribed on average approximately 30 grams of medical cannabis
per month; when extrapolated this equates to annual cannabis demand
of 36 tons.
UNITED KINGDOM
Additionally, Farmako has been granted an authorization for the
wholesale distribution of medicinal products, including medical
cannabis, by the UK’s Medicines and Healthcare products Regulatory
Agency (the “MRHA”). Recent UK legislation allows for the
prescription of cannabis from a medical specialist via a regular
pharmacy model. Access to this high profile market, when coupled
with broad National Health Service insurance coverage for medical
cannabis to ensure patient outcomes, is a key strategic element of
AgraFlora’s global platform.
Within the UK, medical cannabis can prescribe by eligible
physicians for five conditions as set out in the government’s
review:
- Multiple sclerosis (specifically pain or muscle
spasticity)
- Chemotherapy-induced nausea;
- Severe treatment-resistant epilepsy in children;
- Chronic pain in adults; and,
- Appetite and weight loss associated with HIV/AIDS
Prohibition Partners estimates that there are as many as 3.6
million active cannabis users in the UK. AgraFlora and Farmako are
committed to the expansion of a sophisticated, pan-European
cannabis production and distribution network, which serves the
needs of physicians and their patients.
AGRAFLORA AND FARMAKO
Sebastian Diemer, Co-Founder and Chief Executive Officer of The
Good Company GmbH stated: “On behalf of the Farmako team, I express
our sincerest elation to join the AgraFlora group of companies. In
the eight short months since inception, we at Farmako have managed
to capture material amounts of market share from peer group
competitors such as Aurora, Canopy and CC Pharma (Aphria);
successfully distributing 150,000 grams of medical cannabis into
arguably the world’s highest value patient population.
Reliable supply of premium cannabis flower from AgraFlora’s 2.2
million square foot Delta Facility, coupled with a fully integrated
European supply chain, Farmako is positioned to emerge as a true
contender to Aurora, Canopy and CC Pharma within the German
operating theatre. AgraFlora’s Canadian cultivation facilities
yield the finest cannabis products which will exceed the
expectations of educated, sophisticated and quality-driven European
consumers; providing us with the consistent supply of EU-GMP
certified medical cannabis required to continue to seize mark share
from our peers.”
Outfitted with an experienced operations team, focused on
deploying a patient-centric distribution strategy and optimized
supply chain protocols, Farmako, together with AgraFlora is
mandated with addressing priority medical conditions within the
European medical cannabis theatre through the combination of:
- Patented delivery systems and technologies;
- Extensive consumer product goods (“CPG”) and branded product
market entrance experience;
- Global scientific expertise and a defendable IP portfolio;
and,
- Comprehensive doctor detailing and educational campaigns.
AgraFlora will pursue the processing of EU-GMP compliant
cannabis products from its flagship 2.2 million square foot Delta
Greenhouse Complex (the “Delta Facility”) for integration into
Farmako’s European distribution channels. EU-GMP certified cannabis
products are eligible for import/export and sale in the European
Union. European Good manufacturing practice (“EU-GMP”)
certification is an internationally recognized system, mandated
with ensuring all produced goods meet the highest consumer health
and safety standard.
Planned German distribution of cannabis products produced at its
Delta Facility, at a forecasted unit contribution of C$0.80 per
gram, affords AgraFlora the opportunity to achieve unparalleled
retail margins due to its seed to sale vertical integration. Price
sensitivity within the German pharmaceutical cannabis market is
considerably lower than in traditional recreational markets due to
broad insurance coverage, equating to median retail prices of
approximately C$20.00 per gram.
The Company’s Delta Facility is second in size and magnitude
only to the Smiths Falls facility owned by Canopy Growth Corp., the
world's largest cannabis company. By way of additional comparison,
AgraFlora's Delta Facility is 100,000 square feet larger than
Aurora Cannabis Inc.'s facility in Edmonton, Alberta and it is also
more than 700,000 square feet larger than the current size of the
Leamington facility owned by Aphria Inc.
The Delta Facility is a state-of-the-art pressurized, semi-open
Venlo greenhouse, which is widely considered to be one of the most
technically advanced and environmentally friendly greenhouse
operations in the world.
AgraFlora's internal forecasts indicate that upon receipt of its
aforementioned standard cultivation licence from Health Canada, the
company will become the fourth-largest licensed producer (“LP”) in
Canada by 2020 financed production metrics:
Figure 1.
Issuer |
2020 Estimated Annual Capacity (in grams) |
Current Market Capitalization |
Aurora Cannabis |
700,000,000 |
$4,948,835,000 |
Canopy Growth Corp. |
525,000,000 |
$9,824,314,000 |
Aphria |
255,000,000 |
$1,691,011,000 |
AgraFlora & PSC |
251,250,0001 |
$218,476,000 |
Tilray |
225,000,000 |
$1,974,244,000 |
Cronos Group |
150,000,000 |
$4,040,259,000 |
OrganiGram Holdings |
113,000,000 |
$730,919,000 |
AgraFlora plans to commence Phase 2 of the Delta Facility
retrofit in December of 2019, which will include:
- 10 flower rooms with over one million square feet of
canopy;
- 40,000 square feet of EU-GMP postharvest/processing space:
- Equipped with ozone-rich drying rooms;
- Installation of an industrial kitchen; and,
- Workflow design to include commercial and ethanol extraction
capabilities.
Bandon Boddy, Chairman and Chief Executive Officer of AgraFlora
stated: “From the beginning, the market opportunity for medical
cannabis in Germany has been an integral part of AgraFlora’s global
growth strategy. We have long prioritized Germany as one of the
most exciting medical cannabis markets in the world given its
progressive regulations; rapidly expanding patient population and
insurance coverage for over 60 per cent of prescriptions- the
acquisition Farmako confirms our thesis.
The combined AgraFlora - Farmako entity will be equipped with
world-class upstream cultivation assets, as well as highly
efficient European downstream capabilities that will act as a
beachhead into the 700-million-person European marketplace, as well
as crystallize a defendable advantage within the edibles,
cannabinoid-infused beverage and product formulation market
verticals. Farmako’s first-mover advantage, coupled with their
surgical execution and best-in-class operations within the German
cannabis market, are further validated by this recent
announcement.
Farmako’s prestigious good distribution practice certification
marks the highest standards of medical cannabis distribution in the
world, permitting the bulk warehousing of medical cannabis on
German soil, allowing for direct sales into an underserved
marketplace. This acquisition solidifies AgraFlora as a global
cannabis leader and further reinforces our vertically integrated
mandate. "
The Company encourages current and prospective shareholders
alike to download the Farmako corporate presentation by following
the below stated URL:
https://agraflora.com/download/28904/
TERMS
Under the terms of the definitive agreement, AgraFlora will
acquire 100 per-cent (100%) of all the issued and outstanding
shares in the capital of Farmako in exchange for an aggregate of
C$11.5 million in common shares in the capital of the Company,
based upon a fixed pricing benchmark. The payment shares issuable
on the acquisition are subject to escrow provisions of over 18
months and one day. The closing of this acquisition is subject to
customary terms and conditions. A finders fee is payable on this
transaction.
About AgraFlora Organics International Inc.
AgraFlora Organics International Inc. is a growth oriented and
diversified company focused on the international cannabis industry.
It owns an indoor cultivation operation in London, ON and is a
joint venture partner in Propagation Services Canada Inc. and its
large-scale 2,200,000 sq. ft. greenhouse complex in Delta, BC. The
Company is also retrofitting a 51,500-square-foot good
manufacturing practice (“GMP”) edibles manufacturing facility in
Winnipeg, Manitoba. AgraFlora has a successful record of creating
shareholder value and is actively pursuing other opportunities
within the cannabis industry. For more information please visit:
www.agraflora.com.
ON BEHALF OF THE BOARD OF DIRECTORS
Brandon Boddy Chairman & CEOT: (604) 398-3147
For additional
information: |
|
|
|
AgraFlora Organics International Inc. |
For French inquiries |
Tim McNulty |
Remy Scalabrini, Maricom Inc. |
E: ir@agraflora.com |
E: rs@maricom.ca |
T: (800) 783-6056 |
T: (888) 585-MARI |
The CSE and Information Service Provider have
not reviewed and does not accept responsibility for the accuracy or
adequacy of this release.
Forward-looking Information Cautionary
Statement
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.
________________________________1 Forecasted
fully funded production metrics derived upon achievement of
optimized production at AAA Heidelberg and the Delta Greenhouse
Complex.
Agra Ventures (CSE:AGRA)
Historical Stock Chart
From Jun 2024 to Jul 2024
Agra Ventures (CSE:AGRA)
Historical Stock Chart
From Jul 2023 to Jul 2024