AgraFlora Organics International (OTCPK: PUFXF) reported closing a $20 million third and fourth tranches of the $40-million equity participation and earn-in agreement with Delta Organic Cannabis Corp. (DOCC), a privately-held Toronto-based cannabis investment company.
As part of the equity participation and earn-in agreement, AgraFlora issued the third tranche of 44,582,040 common shares of at a deemed price of around $0.45 per share.
Significant Milestone
“The close of the $40 million financing represents another significant milestone met for the company as our 2.2 million square foot greenhouse is officially fully funded,” Derek Ivany, the CEO of AgraFlora Organics, said in a statement.
“Our strategy of partnering with leading organizations has led to AgraFlora owning a 50% economic interest in the second largest cannabis greenhouse in Canada. While we remain focused on the three-phase conversion project of the Delta Greenhouse Complex, we will continue to pursue additional opportunities within the domestic and international cannabis markets,” Ivany stated.
Following the closing of the deal, DOCC has earned a 20% interest in Propagation Services Canada, a joint venture company focused on the cannabis flower and propagation market in Canada. It operates the Delta Greenhouse Complex covering around 2.2 million square feet. It is one of the most-technologically advanced greenhouses in North America, featuring its own 8.8 MW power plant.
AgraFlora owns a 50% interest, while Houwelings Group and partners own the remaining 30% stake in Propagation Services Canada.
AgraFlora Share Issuance
AgraFlora will issue 10 million shares at $0.71 per share to key personnel, including related parties, who are assisting with Propagation Services Canada and the 2.2 million square foot Delta facility.
Further, pursuant to a letter of intent, the company will be issuing 5 million shares to Cornelius Houwelings. The company agreed to issue the consultant an additional 5 million shares upon the achievement of the Delta facility becoming 100% operational in cannabis.
Moreover, AgraFlora will issue 281,690 shares at $0.71 per share to Vendure Genetics Labs under a supply agreement. Under the agreement, the company agreed to purchase certain plants, plant matter and related plant-based products from Vendure for total consideration of $200,000, payable in shares.