Make or break time is now?Seems to me that this is it. After almost 8 years we should soon in the rest of this year find out
once and for all whether we have a viable technology with which production of various foods
can be grown with a profit and thus a positive return to anyone operating this technology.
At this key moment it is somewhat disturbing to see the CFO abruptly be replaced by our CEO.
I do not have as many years of experience as likely most on this board but I have noticed that
usually when a senior manager leaves or is replaced there is some nice comments made by
the company CEO stating how much the departing executive contributed to company growth and
is given best wishes to his next endeavours. This is missing in the news release made yesterday?
Digging around I found this interesting news release illustrating where AFI was at the very beginnings. Been a lot of changes since then over the past 8 years.
Affinor Growers Empowers Growers with Cloning, Analytics, & More
November 3, 2014
WHITEFISH, MT / ACCESSWIRE / November 3, 2014 / The cannabis industry has been booming across North America over the past few years. In the U.S., the legalization of adult-use cannabis and the spread of medical marijuana has helped fuel a market that could reach $8 billion by 2018. In Canada, the new Marihuana for Medical Purposes Regulations ("MMPR") have sparked an industry that Health Canada expects will reach C$1.3 billion in size by 2024.
Driven by the industry's growth, investors have flocked into hundreds of newly minted public companies targeting the space. Some companies like Tweed Marijuana Inc. (OTC: TWMJF) (TSX-V: TWD) have already secured licenses to grow marijuana and now trade with $50+ million market capitalizations, but investors face a lot of confusion and uncertainty in the space.
Marijuana remains an illegal substance under the U.S. Controlled Substances Act, which prevents most public companies from handling the substance directly. Companies like GW Pharmaceuticals plc (NASDAQ: GWPH) have turned their efforts to the science side of the business by pursuing clinical trials, while others like Vape Holdings Inc. (OTC: VAPE) provide accessories.
Building Exposure in the U.S.
Affinor Growers Inc. (OTC: RSSFF) (CSE: AFI) differentiates itself by focusing on the development and licensure of growing technologies that span both the traditional agriculture and cannabis industries. Through its recent acquisitions, the company has also built indirect exposure to the cannabis industry, becoming the first Canadian company to legally grow and sell cannabis within the U.S.
On August 5, 2014, the company acquired a 49% interest in Good to Grow LLC - a medical marijuana dispensary located in Washington States. The 5,000 square foot facility is being expanded into a state-of-the-art production facility, which Affinor Chairman Nick Brusatore anticipates will receive 502 approval by January of 2015, setting the stage for significant near-term revenue.
Within the same market, the company signed an agreement to acquire 49% of Herbal Analytics - a Washington State testing laboratory - to provide quality control for cannabis products. The analytics firm differentiates itself with its Bio Analytical Method Validation that is designed to ensure both accuracy and provision for both the company's existing products and third-party products.
Creating a Platform for Growth
Affinor Growers may have a promising presence in Washington State, but the company's real potential may lie in its growing technologies. On October 9, 2014, the company announced that it was in the final stages of releasing a new, sophisticated vertical cloning design that it would offer to third parties looking to develop pharmaceutical and marijuana clones in the U.S.
Cloning ensures that plants are bred exactly the same in order to ensure the same clinical effects. The company's technology automates the typically manual cloning process, with the ability to produce 200 clones per square foot in a 15-level stack using 50% less labor than traditional methods. Since clones sell for about $5 to $10 a piece and can be created every 10 days, there is significant revenue potential.
In addition to the cannabis industry, the same technology could become incredibly valuable with the pharmaceutical and traditional agricultural industries where clones are used to ensure quality. These markets represent billions of dollars in added potential over time, particularly given the significant improvements in cloning productivity relative to traditional methodologies.
Breakthrough Greenhouse in Quebec
Affinor Growers plans to implement its growing technologies for its own production in its recently purchased 45-acre agricultural property in St. Chrysostome, Quebec, Canada. At the location, the company plans to build a state-of-the-art strawberry growing facility that leverages the robust and growing demand for strawberries to create jobs and long-term shareholder value.
These efforts reflect management's long-term plans to become leaders in redefining the agricultural industry with its innovative growing technology that involves zero water waste, no pesticides, and guaranteed production. In the recent interview featured above, management indicated that it has already received inquiries from interested customers, including many remote regions.
Future opportunities in traditional agriculture could include previously announced strawberries and romaine lettuce, as well as other crops experiencing global shortages, such as kale. By addressing these food shortages with rapid growing of high quality crops, the company aims to solve some of the key industry supply issues, while enabling growers to cut prices and/or improve their margins.
Looking Ahead
Affinor Growers remains uniquely positioned in both the marijuana and traditional agriculture industries. Through a number of recent agreements, management has acquired a foothold in Washington State's legalized adult-use cannabis industry while building its technology portfolio to include more robust growing technologies. These developments could position the company for long-term growth in shareholder value.
Management appears capable of executing these ambitious goals, particularly with the addition of former Medbox Inc. (OTC: MDBX) CEO Dr. Bedrick. In addition to working with MedBox, the executive founded Kind Clinics Medical Marijuana Dispensaries. Dr. Bedrick will be providing consulting services to the company designed to facilitate licensing opportunities for its agricultural technologies.
In the end, investors interested in the cannabis industry may want to take a closer look at the company given its diversification and execution.