By AgraFlora Organics International Inc. on Wednesday, 02 June 2021
Category: Vertically Integrated

AgraFlora says first wholesale crop at Delta greenhouse on track for sale at the end of summer

The company expects to sell the crop on a business-to-business basis to a licensed producer with a sales license, on a predetermined or spot basis

CEO Elise Coppens said the firm is 'excited about the potential upside in the US market and the magnitude of the opportunity that still exists south of the Canadian border'

AgraFlora Organics International Inc () (FRA:PU31) (OTCPINK:AGFAF) CEO Elise Coppens told shareholders that the first wholesale crop growing at the Delta greenhouse in British Columbia is on track for processing and sale towards the end of summer this year.

In a letter to shareholders, Coppens said that the company has been focused on generating revenue through the sale of cannabis from the Delta facility.

AgraFlora is in a joint venture with Propagation Services Canada Inc (PSC), which operates a 2.2 million-square-foot greenhouse complex in Delta, British Columbia. The company has both an industrial hemp license and a standard cultivation license from Health Canada. Agraflora holds a 70% stake in PSC.

READ: AgraFlora Organics intends to be a top cannabis player in Canada and Europe

“The first wholesale crop growing at the Delta greenhouse is on track for its cultivation, drying, processing and sale toward the end of this summer,” said Coppens. “We expect to sell the crop on a business-to-business basis to an LP with a sales license, either on a predetermined or spot basis, depending on the crop’s quality and based on the results obtained via lab testing.”

However, Coppens said some "key operational steps need to take place" in order to ensure that the crop generates optimal yields.

“As a point of interest, one of those steps is called “de-leafing” and we have about a 1.5-acre block of de-leafing to do on our crop,” said Coppens.

“We use pipe rails for radiant heat, which also serve as tracks for our crop work and harvesting carts. This makes moving up and down 68-metre rows a lot easier and more efficient.”

In Europe, AgraFlora recently established a foothold starting in Germany with the acquisition of Farmako GmbH, a leading European medical cannabis distributor in the UK, Luxembourg, and Denmark.

“Representing AgraFlora’s presence in the middle part of the value chain, Farmako continues to distribute cannabis-related products internationally for the company in Europe,” said Coppens. “The team, led by Katrin Eckmans, is currently working hard to develop a line of Farmako Extracts with suppliers in North Macedonia and Poland.”

The AgraFlora boss also touched on how successful Farmako GmbH, has been in supplying its proprietary THC Testkits to Stadapharm GmbH. 

“As it turns out, launching the product at the end of last year was ideal from a timing perspective, since other players are now trying to enter the test kit market,” said Coppens. “Farmako used its first-mover advantage to secure a great distribution deal, establish a solid pharmacy-linked customer base and open the door for further wholesale deals.”

The THC Testkit was developed and produced by Farmako in-house as a tool for pharmacists to detect THC and identify medical cannabis flowers and extracts easily, quickly and at low cost.

The Vancouver-based company's strategy is two-pronged - to supply the Canadian recreational market with high-potency flower, while also serving the European medical cannabis market. Now it is eyeing the US market.

“Entering the US market, either directly, indirectly or as part of a transaction involving one or more third parties, remains a high priority for the management team and board of directors,” said Coppens.

“We are excited about the potential upside in the US market and the magnitude of the opportunity that still exists south of the Canadian border.”

Contact the author Uttara Choudhury at uttara@proactiveinvestors.com

Follow her on Twitter: @UttaraProactive

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