Agraflora Closes Acquisition of German Cannabis Distributor Farmako

Agraflora Organics (CSE: AGRA) has closed its previously announced acquisition of Farmako GmbH, which was originally announced in late October. The acquisition, completed in an all-stock transaction, will see Agraflora finally obtain a source of revenue as it awaits Health Canada licensing for its Canadian operations.

The acquisition of Farmako now supplies Agraflora will multiple licenses in the European Union. The firm currently holds the required EU-GDP license to be able to distribute medical cannabis within Germany and other regions of the European Union. The firm currently supplies approximately 8% of all cannabis consumed within the German state, with Farmako reporting revenues of $2.8 million during fiscal 2019.

The distributor currently maintains a network of over 20,000 pharmacies, which maintains a patient count of over 100,000. Its unclear how many of these patients specifically utilize Farmako-supplied cannabis.

Farmako has also submited to the UK Home Office to obtain a controlled drug license within the United Kingdom. The firm has been certified to be in compliance with good distribution practice (GDP) within the region, and has received an authorization for wholesale distribution of medical products in the summer of 2019. The firm now awaits a controlled drug license, which it expects to be granted after having recently conducting an inspection with the UK Home Office.

Agraflora acquired Farmako for $11.5 million in common shares of the company. The shares used as payment are subject to an 18-month lockup agreement as well.

Agraflora Organics last traded at $0.10 on the CSE.

Information for this briefing was found via the Canadian Securities Exchange and Agraflora Organics. Agraflora Organics was previously a client of Canacom Group, the parent company of The Deep Dive. The author has no securities related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.