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AgraFlora Organics International aims to disrupt the Canadian dried flower market with live-plant cannabis genetics acquisition

Last updated: 10:24 02 Mar 2020 EST, First published: 08:54 02 Mar 2020 EST

AgraFlora Organics International Inc. -
Live-Plant cananbis Genetics can be immediately put into production

AgraFlora Organics International Inc (CSE:AGRA) (OCTMKTS:AGFAF) revealed it is to acquire a portfolio of elite live-plant cannabis genetics from an award-winning cultivator to disrupt the Canadian dried flower market.

The deal has been struck by subsidiary Propagation Services Canada Inc (PSC), which is co-owned by AgraFlora and the Houwelings Group. The latter is one of North America’s leading greenhouse vegetable producers.

READ: AgraFlora taps cannabis industry veteran to drive asset commercialization

PSC’s investment in elite Live-Plant Genetics is expected to generate a positive impact on the three key drivers of profitability for a cultivator: improved sales prices, greater per-plant yields and shorter flowering time, Vancouver-based AgraFlora said in a statement.

"Management believes the Canadian market has suffered from a lack of strong genetics resulting in low THC values, undesirable flavour profiles, and a lack of product differentiation."

AgraFlora also noted that the move will expedite its go-to-market timeline because live-Plant Genetics can be immediately put into production whereas seed-based genetics require at least one preliminary selection crop cycle, which can take up to six months.

"Securing these Live-Plant Genetics is an important element of the company’s plans to position PSC, once licensed, to disrupt the Canadian dried flower market," the group said, adding that according to recent market data from Health Canada, dried cannabis flower sales comprised 92% of total sales during the period it reviewed.

“We are excited to begin cultivating the Live-Plant Genetics quickly upon receipt of our cultivation license and will be able to bring our cannabis products to market faster by avoiding the need for a complicated and time-consuming seed selection process," said Ruben Houweling, from Houweling Nurseries, co-owner of PSC.

A leading brand ...

"I am confident that the combination of these Live-Plant Genetics with the quality of the team and greenhouse we are developing in Delta, BC will position PSC to be a leading brand with a goal of producing the highest-potency THC cannabis at the lowest-cost.”

PSC is expected to start cannabis operations this year with a focus on producing high-potency cannabis at the lowest possible cost.

It will operate an automated greenhouse facility with an expandable footprint of up to 2.2 million sq ft.

Shares in Toronto advanced over 7% in early deals to C$0.075.

---Updates for share price---

Contact the author at giles@proactiveinvestors.com

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