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AgraFlora Closes Acquisition of Organic Flower’s Downstream and Product Formulation Asset Portfolio

AgraFlora Organics International Inc. (“AgraFlora” or the “Company“) (CSE: AGRA) (PU31.F) (OTCPK: PUFXF), a growth oriented and diversified international cannabis company,  is pleased to announce it has completed a transaction relating to the acquisition of downstream and product formulation portfolio (the “Assets”) from   Organic Flower Investments Group Inc. (SOW.CN) (2K6.F) (QILFF) (“Organic Flower” or“OFIG”). Pursuant to the terms of an executed Asset Purchase and Sale Agreement (the “Agreement”), this transaction reunites 70 percent of AgraFlora’s joint venture entity, Propagation Services Canada’s (“PSC¨) 2,200,000 square foot Delta Greenhouse Complex under a consolidated corporate umbrella.

Under the terms of the executed Agreement, AgraFlora will issue 1.15 common shares in the capital of AgraFlora for each one (1) issued and outstanding share of Organic Flower (the Consideration Shares”). It is anticipated that the Consideration Shares will be distributed to the shareholders of Organic Flower upon formal establishment of a record date.

As per the terms of the executed Agreement, AgraFlora has acquired the following Assets from Organic Flower:

  • 20% interest in the flagship 2,200,000 square foot Delta Greenhouse Complex;
  • Exclusive trans-European distribution and GMP cannabis processing/finishing agreements comprised of 80,000 retail endpoints/pharmacies, spanning 16 countries; and,
  • An array of domestic downstream/product formulation operations comprised of:

With the reunification of Organic Flower’s 20 per cent interest in PSC under a consolidated banner, AgraFlora’s interest in the projected 2020-funded production from the Delta Greenhouse Complex is forecasted to be 175,000,000-grams of premium dried cannabis flower. AgraFlora’s low-cost domestic cannabis production potential is further de-risked by a five year, 100,000,000-gram off-take agreement with ICC International Cannabis Corp. (CSE:WRLD.U) (8K51.F) (WLDCF) (“ICC”), as well as a 25,000,000-gram per annum off-take agreement  with Namaste Technologies Inc. (TSXV:N) (M5BQ.F) (NXTTF); subject to approval of its cultivation and sales licenses by Health Canada.

Projected cannabis production from the Delta Greenhouse Complex, coupled with a previously announced revenue sharing and distribution arrangement with ICC, will afford AgraFlora the opportunity to capture significant cash flows at both the upstream and downstream layers of the cannabis value chain; realizing material exposure to both the wholesale and eventual retail distribution of dried cannabis into high-value European patient populations.

“Our flagship Delta Greenhouse Complex is widely considered to be one of the most technically superior and environmentally friendly greenhouse operations on the planet,” said Brandon Boddy , Chairman and CEO of AgraFlora Organics International Inc. “Complemented by service agreements with experienced, best in class greenhouse operators, coupled with an expedited cultivation infrastructure retrofit, as well as renewed guidance pertaining to the Q4 award of a cultivation licence from Health Canada, the Delta Greenhouse Complex is forecasted to generate the critical mass required in today’s evolving landscape for Canadian cannabis producers.  As we prepare for our inaugural harvest which is scheduled for the first quarter of 2020, AgraFlora looks forward to the integration of Organic Flower’s unique domestic downstream asset portfolio and will continue to aggressively execute on our business plan while maximizing shareholder value.”

“This is a watershed acquisition for AgraFlora, adding a broad portfolio of unique downstream cannabis assets in a variety of lucrative, high-margin verticals, all while increasing exposure to marketplaces primed for geometric growth, including the European Union,” continued Boddy. “This truly is the penultimate step involved with elevating AgraFlora to a premier vertically integrated cannabis company. The addition of Organic Flower’s Canadian assets under the ‘AgraFlora’ corporate flag will signal to the marketplace the emergence of a new Tier 1 Licenced Producer, as the industry progresses towards the next phase of global cannabis normalization.”

ABOUT ORGANIC FLOWER INVESTMENTS

Leveraging strategic relationships, proprietary investments and exclusive partnerships with preeminent international cannabis cultivators and formulators for the development of best in class products and brands to be marketed and distributed throughout our global footprint. Via its wholly owned subsidiary, Delta Organic Cannabis Corp., Organic Flower is launching one of the largest and most efficient cannabis facilities on the planet. Learn more about Organic Flower by visiting our website at: https://sowcannabis.ca/.

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 Service Canada and its large-scale 2,200,000 sq. ft. greenhouse complex in Delta, BC . The Company 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 BOARDS OF DIRECTORS

Brandon Boddy
Chairman & CEO
AgraFlora Organics International Inc.

Joel Dumaresq
CEO, Director
Organic Flower Investments Group Inc.

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.

SOURCE AgraFlora Organics International Inc.


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