Cannabis company AgraFlora Organics International Inc. (AgraFlora Stock Quote, Chart CSE:AGRA) (formerly PUF Ventures Inc.) announced on Thursday a supply agreement with Cannmart Inc., a wholly-owned subsidiary of cannabis e-commerce platform Namaste Technologies (TSXV:N). The deal will give Cannmart the right of first refusal to purchase up to 25,000 kg of cannabis from AgraFlora at a price of $4.00 per gram, representing up to $100 million per year.
After a long wait, Vancouver-based AgraFlora finally received a cultivation license from Health Canada in October for the AAA Heidelberg facility, in London, Ontario, of which AgraFlora currently owns 56 per cent. In addition to Heidelberg, AgraFlora also runs a 2.2-million sq. ft. cannabis propagation greenhouse in Delta, BC, and is a member of industry heavyweight Canopy Growth Corp’s “CraftGrow” program which partners Canopy with smaller, high-quality operations.
AgraFlora President and CEO Derek Ivany says that through the Cannmart deal his company will be helping to supply the highest quality flower to medical marijuana patients across Canada.
“Namaste is a company with strong social corporate ethics and it is important that AgraFlora plays its part to support the needs of medical patients across Canada. We have committed up to 10 per cent of our projected full annual capacity of 250,000 kg of high quality cannabis and look forward to a long and mutually beneficial partnership with Namaste,” said Ivany in a press release.
Through Cannmart, which has a medical sales-only license under Canada’s Cannabis Act, Namaste has lined up a number of supply agreements over the past year, including with Emerald Health Therapeutics, The Supreme Cannabis Company, Marigold Projects Jamaica, GTEC Holdings and Bonify Inc.
In September of this year, AgraFlora secured a $40-million investment deal with Delta Organic Cannabis Corp, with the latter agreeing to purchase up to 17.8 million AgraFlora shares at a price of $2.24 per share. Earlier this week, AGRA announced that it had closed on a $7.5-million second tranche of the deal, bringing the total received to date to $20 million.
Agraflora’s share price rose 22 per cent in trading on Thursday.
Disclosure: Agraflora is a sponsor of Cantech Letter