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.
READ: AgraFlora and other owners to sell edibles business for $35M to Organigram Holdings
“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.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive
