AGRAFLORA ORGANICS AWARDED HEALTH CANADA HEMP PRODUCTION LICENSE; TO IMMEDIATELY STREAM HIGH CBD CULTIVARS TO EDIBLES AND BEVERAGE MANUFACTURING ASSET PORTFOLIO Further to its news release dated May 30, 2019, Agraflora Organics International Inc. has been awarded a licence from Health Canada, under the industrial hemp regulations of the Cannabis Act, at its flagship 2.2-million-square-foot Delta greenhouse complex.
The company's full-spectrum industrial hemp licence equips Agraflora with the following immediate cultivation, propagation, nursery and product formulation/manufacturing capabilities:
- Premium hemp seedling propagation for peer IHL recipients:
- Crystallizing a pathway toward consistent, near-term ancillary cash flows, while solidifying Agraflora's position as a first mover in cultivating superior starter plants for the burgeoning North American hemp industry;
- Proven build-to-order propagation model forecasted to produce 1.3 million small/high-density hemp transplants per 28- to 42-day seedling turn;
- Establishment of a dedicated hemp propagation nursery within existing greenhouse infrastructure;
- Streaming of high CBD (cannabidiol) hemp cultivars to Agraflora's downstream functional food, topicals and cannabinoid-infused beverage asset portfolio;
- The Edibles and Infusions Corp.: functional food product development and manufacturing;
- The Brewhouse: formulation and production of CBD-infused beverages, including non-alcoholic beers seltzers, ready-to-drink (RTD) beverages;
- Canutra Naturals/HowlBrands: manufacturing of a suite of hemp oil/CBD-infused personal care and performance products including:
- Therapeutic relief balms;
- CBD-infused pain relief creams and roll-ons;
- Organic cosmetics with anti-aging properties;
- Shampoos and conditioners;
- Sunscreens;
- Planned commercial production of organic hemp seed oil for distribution;
- High-CBD cultivar experimentation and proprietary CBD cultivar development:
- Collection and storage of high-value strains/seeds for resale initiatives;
- Specialized fibre production;
- Successful recapture of hemp stalks to be processed into high-margin, specialized fibre products and building materials.
In conjunction with the company's reputable portfolio of hemp/CBD-inspired brands, as well as its commitment to innovative product development and industry research, the award of an industrial hemp licence further bolsters Agraflora's mandate of championing a corporate response to global demand for both hemp- and CBD-derived products. Agraflora will commence initial research and development in July, 2019, beginning with the testing of Health Canada-approved varieties.
Agraflora anticipates that once fully optimized, its planned industrial hemp operations will provide ample feedstock inputs for the company's unique portfolio of cannabinoid product formulation and downstream assets, affording the company the ability to capture material cash flows throughout each link of the cannabis value chain. The company's bellwether 2.2-million-square-foot Delta greenhouse complex is slated to be one of the largest and most advanced cannabis cultivation operations worldwide and will act as a springboard for the continued integration of its upstream, mid-stream and downstream capabilities.
Brandon Boddy, chairman and chief executive officer of Agraflora, stated: "The Canadian cannabis market is continually evolving. With the second wave of cannabis legalization involving edibles, beverages and topical products set to be effected in October of this year, we anticipate the demand for CBD will increase geometrically.
"One of Agraflora's corporate mandates is to ensure we can respond to evolving legislation and maintain market adaptability while maximizing revenues. We applied for the hemp licence to complement our core business model of producing low-cost, premium cannabis and are of the opinion that leveraging existing greenhouse infrastructure to pursue the cultivation and propagation of hemp will provide the company with a stream of stable, ancillary cash flows.
"In collaboration with our experienced partners, the Houwelings Group, we intend to aggressively begin researching and developing a high CBD hemp cultivar, resulting in greater yield of CBD and incrementally higher ROI per acre than the strains that are currently available."
All planned hemp cultivation at the company's Delta, B.C., facility will utilize existing greenhouse infrastructure that is not currently earmarked for propagation and/or cannabis business initiatives. As a result, Agraflora's proposed hemp cultivation activities will not impact current propagation and eventual cannabis cultivation operations. Hemp cultivation will not interfere with the planned cannabis cultivation activities at the Delta greenhouse complex, nor will it reduce the cannabis cultivation design capacity of the company's Delta, B.C., facility.
Further to the company's news release dated April 29, 2019, the company has proceeded with the second issuance of 1.25 million bonus shares at a price of 42.5 cents per share to Cornelius Houwelings pursuant to a letter of intent dated May 22, 2018.
About Agraflora Organics International Inc.
Agraflora Organics International 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.