The supply deal is subject to approval of Agraflora’s cultivation and sales licenses by Health Canada
Namaste Technologies Inc. (CVE:N) (OTCMKTS:NXTTF) said Thursday that its Cannmart Inc unit has agreed to pay up to C$100 million for as much as 25 million grams of medical marijuana annually from Agraflora Organics International Inc (CSE:AGRA) (OTCMKTS:PUFXF).
The companies said in a press release that under their agreement Cannmart has the right of first refusal to purchase up to 10% of the total annual production from Agraflora's Delta Greenhouse Complex, representing 25 million grams at $4 per gram for a total price of up to C$100 million per year.
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The supply deal is subject to approval of Agraflora’s cultivation and sales licenses by Health Canada. Cannmart operates a medical cannabis sales-only license under the regulations of the Cannabis Act and purchases bulk cannabis products from licensed producers across the country to offer on its online platform.
In October 2018, Agraflora's majority-owned subsidiary, AAA Heidelberg, received a license to produce under Health Canada's Access to Cannabis for Medical Purposes Regulations at its facility in London, Ontario.
"We are pleased to announce the supply agreement with Agraflora," Namaste CEO Sean Dollinger said in a statement. "We anticipate that they will provide a high-quality product for us to offer to our patients through Cannmart.”
Agraflora CEO Derek Ivany added that the company is “pleased to be partnering with one of the leading cannabis companies in Canada.”
Shares of Namaste slipped C$0.05 to C$1.29 in Wednesday’s Canadian trading. They were down C$0.05 to C$0.96 on the OTC Markets. Agraflora climbed C$0.01 to C$0.18 and rose US$0.01 to US$0.13.
Contact Dennis Fitzgerald at [email protected]