Mr. Brandon Boddy reports
AGRAFLORA ORGANICS BOLSTERS EUROPEAN SUPPLY AGREEMENT; RECEIVES C$2,000,000 CASH INFUSION
Further to a commercial rights and supply agreement, dated May 22, 2019, Agraflora Organics International Inc. has entered into a complementary co-operation agreement.
Under the terms of the co-op agreement, a party to the original agreement has subscribed to a non-brokered private placement at a 28.2-per-cent premium to Agraflora's five-day VWAP (volume-weighted average price) of 23.4 cents for total proceeds of $2-million. In consideration for the offering, Agraflora has agreed to defer payment for the initial $2-million purchase of dried cannabis flower, under the previously announced agreement. Such deferred payments shall be repaid in equal portions of $250,000 across the subsequent $8-million in anticipated dried cannabis flower purchases.
In connection with the offering, the company has issued 6,666,667 transferable special warrants to one purchaser at a price of 30 cents per special warrant. Each special warrant is convertible into units with each unit consisting of one common share of the company and one transferable common share purchase warrant, with each warrant entitling the holder thereof to purchase one additional share of the company at a price of 50 cents per share for a period of 36 months from the date of issuance of the warrants.
All securities issued are subject to a four-month hold period pursuant to applicable securities laws of Canada, after which time the special warrants are convertible into the units.
The European medical cannabis cannabinoid-derived CPG markets continue to mature, thus affording qualified market participants to achieve robust margins via the distribution of premium cannabis flower and associated derivative products. The agreement affords Agraflora's commercial partners with a consistent supply of high-grade cannabis flower, permitting the continued penetration of high-value European Union patient populations.
The aforementioned agreements are contingent on Agraflora's receipt of a standard cultivation and accompanying sales licences from Health Canada for its flagship Delta greenhouse complex. Agraflora's Delta greenhouse complex is widely considered to be one of the most technically advanced and environmentally friendly greenhouse operations in the world, equipped with industry-leading cultivation infrastructure.
About Agraflora Organics International Inc.
Agraflora is a growth-oriented and diversified company focused on the international cannabis industry. It owns an indoor cultivation operation in London, Ont., and is a joint venture partner in Propagation Service Canada and its large-scale 2.2-million-square-foot greenhouse complex in Delta, B.C. The company has a successful record of creating shareholder value and is actively pursuing other opportunities within the cannabis industry.
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