Agraflora To Acquire Sanna Health Corp for $23 Million

Agraflora Organics (CSE: AGRA) announced early this morning that the issuer has signed an interim agreement to acquire Sanna Health Corp in an all stock transaction valued at $23 million. Sanna, a licensed cannabis operator, is located within the Greater Toronto Area and currently has licensing for cultivation, processing, and medical sales of cannabis.

The transaction will see Agraflora acquire the operator at a price per share of $0.30, for a total of $23 million in an equity only transaction, marking one of the cheapest M&A transactions yet in the space for a fully licensed operator. While fully licensed in terms of cultivation, processing, and medical sales, its unclear what products Sanna is eligible to sell currently – it is believed that the operator is operating under a numbered company, as Sanna did not appear in Health Canada’s database.

The Sanna facility is located on 16 acres located a half hour from downtown Toronto. The facility itself, 27,000 square feet in size, has both extraction and cultivation operations currently in place, and is expected to be capable of processing 250,000 kilograms of biomass upon optimization. Much of this is expected to be supplied by Sanna’s 88-acre outdoor property, which Agraflora intends to start licensing for cultivation in early 2020 with an initial 13 acre plot.

An expected closing date for the proposed transaction was not provided by Agraflora Organics.

Agraflora Organics last traded at $0.17 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.