AgraFlora Organics International (CSE: AGRA) (Frankfurt: PU31) (OTCPK: PUFXF) signed a binding letter of intent with Organic Flower Investments Group (CSE: SOW) (FWB: 2K6) (OTC: QILFF) to 100% of Organic Flower’s assets.
The deal includes the purchase of Organic Flower’s 20% interest in the Delta Greenhouse Complex, an array of domestic downstream/product formulation operations and the rights to an trans-European distribution network.
The sale price is expected to be comprised of 1.15 shares of Agraflora for each one issued and outstanding share of Organic Flower at the time of closing. Closing of the proposed transaction remains subject to applicable corporate, securities and exchange approvals.
The proposed transaction will reunite 70% ownership of Propagation Services Canada Ltd. and the 2.2 million-square-foot greenhouse complex in Delta, B.C. under the AgraFlora corporate umbrella. The combined interest in 2020-funded production of the Delta Greenhouse Complex is forecasted to be 175,000,000 grams of premium dried cannabis flower.
“This is a paradigmatic transaction for AgraFlora, which will consistently amplify long-term shareholder value as the combined entity continues to execute on its corporate roadmap,” stated Brandon Boddy, the CEO of AgraFlora Organics.
“The reunification of the 2.2 million square foot Delta Greenhouse Complex will create the critical scale needed in today’s evolving landscape for Canadian cannabis producers. The combined entity will be equipped with world-class upstream cultivation assets and diverse downstream capabilities that will act as a beachhead into the 700-million-person European marketplace, as well as a crystalize a distinctive first mover advantage within the edibles, cannabinoid-infused beverage and product formulation market verticals,” Boddy added.
European Distribution Network
As part of the deal, AgraFlora will inherit Organic Flower’s European distribution and EU-GMP cannabis processing/finishing agreement capabilities.
Organic Flower’s trans-European distribution network is comprised of 80,000 retail outlets and pharmacies, spanning 16 countries, including Germany, the United Kingdom, Ireland, Denmark, Italy, France, Spain, Poland, the Netherlands and Greece.
The European distribution network is augmented by various value-added services including strategic procurement; warehousing; product registration; and, regulatory representations.