Good evening,

Earlier I sent you my new trade idea for tomorrow, AgraFlora Organics International, Inc (AGFAF).

We are super excited about this one, and just wanted to make sure you got my last email.

As you can see in the chart below, AGFAF has been steadily declining in price over the past six months, currently trading just above its recent lows. 

We think this recent spike could be the start of something bigger to come.

AGFAF has a 52 week high of $0.64 and the 50% fib retracement is around $0.40. A move back to this level could deliver 100% gains.

And as you can see, AGFAF has a history of some nice short term bounces. Back in June it ran from $0.25 to $0.35 in a few days. In May it jumped from $0.26 to $0.42. 

And back in March it made two massive bounces in the space of a few weeks.





About AGFAF...

AgraFlora Organics International is a vertically integrated cannabis company equipped with a robust portfolio of licensed upstream, downstream and product formulation assets.

AgraFlora has continued to deploy an assertive corporate acquisition stratagem, amassing a diverse portfolio of vertically integrated cannabis assets and industry partnerships.

Culminating with the Company’s recent acquisition of a suite of unique downstream and cannabinoid product formulation assets from Organic Flower Investments Group Inc., AgraFlora now boasts the following upstream/downstream operations, partnerships, off-take agreements, exclusive licences and asset exposure:

The Company owns and operates an ACMPR licensed indoor cultivation operation in London, ON, and controls a 70% interest in Propagation Service Canada and its large-scale, 2.2 million square foot greenhouse complex in Delta, B.C.

The Company’s Delta Greenhouse Complex is equipped with 2.2 million square feet of dedicated cultivation area under glass and is widely considered to be one of the most technically advanced and environmentally efficient greenhouse operations in the world.

AgraFlora continues to achieve material progress with regard to the retrofit and licensing of its bellwether Delta Greenhouse Complex. After a comprehensive review of its anticipated final preparations and submissions, including its affirmation of readiness and video evidence package, the Company anticipates, based on recent standard timelines for review and award and assuming no major required amendments or augmentations, the award of a cultivation licence from Health Canada by the fourth quarter of 2019.

Upon successful award of its aforementioned Health Canada cultivation license, the Delta Greenhouse Complex will hold claim to the highly coveted spot as the world’s second largest cannabis cultivation operation under glass, with an estimated replacement cost of $190,000,000.

AgraFlora’s internal corporate projections indicate that upon receipt its aforementioned cultivation license from Health Canada, the Company’s Delta Greenhouse Complex will be the fourth largest Licensed Producer (“LPs”) in Canada by 2020 funded production metrics (see Figure 1), strategically positioned in close proximity to Canada’s largest cannabis economic centres; Toronto and Vancouver.

AgraFlora’s forecasted production metrics are further substantiated the Delta Greenhouse Complex’s industry-leading cultivation infrastructure, including:

• Fully integrated on-site natural-gas-powered power plant;

• Providing ample heat and electricity, while repurposing carbon dioxide emissions to benefit the plants;

• Proprietary energy-efficient air exchange;

• Advanced climate and humidity control management infrastructure;

• Ebb-and-flow watering systems to enhance complete irrigation recapture and water treatment;

• 1.5-million-gallon hot water storage tank configured to store energy produced during the day, for redistribution during non-peak hours, thereby increasing operational efficiencies and reducing associated energy costs; and,

• Multistage supplemental lighting augmented by natural sunlight to foster optimized illumination equilibrium.
   

Exclusive Registered Trademark Portfolio

By way of its wholly owned subsidiary, Trichome Cannabrands Inc. (“Trichome”), the Company has aggregated portfolio of 57 registered trademarks in Canada for a diversified range of cannabis products and services, including:

• Medicinal cannabis: for the relief of nerve pain, treatment of muscle spasms caused by multiple sclerosis, relief of nausea caused by chemotherapy, temporary relief of seizures and cannabis oil for the treatment of cancer;

• Recreational cannabis: on-line and retail sale of cannabis, cannabis-related products, derivatives of cannabis and natural health products containing cannabis;
   
• CBD-infused performance products: CBD oil for medical purposes, topical anesthetics, antibiotic cream and anti-inflammatory ointments;
   
• Packaging and vape products: packaging of cannabis, cannabis-related products, derivatives of cannabis and natural health products containing cannabis, and cannabis oil for electronic cigarettes;

• Cosmetics: makeup, beauty care cosmetics, eye cream, body creams, massage creams, massage oils, skin care preparations, body powders, body oils, bath soap, moisturizing skin lotions, body sprays used as personal deodorants and fragrances, non-medicated bath salts, exfoliating scrubs for the body, and bath oils;

• Candy, chocolate and edibles: cannabis oil for food and edible oils, chocolate bars infused with cannabis, brownies containing marijuana, chocolate, and sugar confectionery;
   
• Beverages and bottling: non-alcoholic fruit-based beverages, carbonated soft drinks, sports drinks, beverage flavourings, beverages made of coffee and tea;
   
• Cannabinoid infused beers and ciders: alcoholic-based beverages, alcoholic fruit beverages and alcoholic tea-based beverages.

Included in the portfolio of trademarks are regional airport codes, telephone area codes and other such recognizable regional identifiers that show significant branding potential for the cannabis space.

AgraFlora intends to leverage these registered trademarks throughout a wide array of corporate branding exercises.
 

Off-Take And Commercial Rights Agreements

Furthermore, AgraFlora has secured commercial rights and off-take agreements with ICC International Cannabis, as well as Namaste Technologies, whereby ICC and Namaste may purchase up to 100,000,000 grams and 25,000,000 grams of premium dried cannabis from the Company’s Delta Greenhouse Complex, respectively.

These off-take agreements will further de-risk AgraFlora’s low cost domestic cannabis production by providing the Company with the opportunity to capture significant cash flows at both the upstream and downstream layers of the cannabis value chain; realizing material exposure to both the wholesale and eventual retail distribution of dried cannabis into high-value domestic and international patient populations.

In addition, AgraFlora and ICC have entered into a commercial rights agreement, affording the Company unencumbered access to cannabis processing/finishing at ICC’s EU-GMP certified facilities.

In anticipation off-take delivery from AgraFlora, ICC is architecting its first purpose-built, EU-GMP compliant cannabis processing, manufacturing and packaging facility. It is anticipated that ICC’s finishing facility will function as a premier European cannabis-processing hub, through which:

1. Cannabis produced/procured from ICC’s contract farming and off-take agreements can be securely shipped to the finishing facility
2. Cannabis manufacturing and processing will then be initiated at ICC’s finishing facility according to GMP-certified manufacturing specifications and
3. The now finished GMP-certified cannabis can be packaged for export and/or leveraged as GMP-compliant cannabis inputs to produce a portfolio of diverse designer product formulations

GMP-certified cannabis products are eligible for import/export to the European Union, thus achieving higher margins, all while removing barriers to entry for the penetration of high-value EU patient populations. GMP certification is an internationally recognized system, mandated with ensuring all produced goods meet the highest consumer health and safety standard.

The aforementioned commercial rights and off-take agreements are contingent on AgraFlora receiving its cultivation and sales licences from Health Canada for its Delta greenhouse complex operations.
 

European Distribution And Collabaration Agreement

In addition, AgraFlora has inherited a European distribution and collaboration agreement with ICC, affording the Company unbridled access to a trans-European distribution network is composed of 80,000 retail outlets and pharmacies, spanning 16 countries, including:

• Germany
• The United Kingdom
• Ireland, Denmark
• Italy, France
• Spain
• Poland
• The Netherlands and Greece

AgraFlora’s European distribution network is augmented by various value-added services, including:

• Strategic procurement
• Warehousing
• Product registration
• Regulatory representations

AgraFlora will remunerate International Cannabis according to a floating royalty matrix based on the net sales of products sold through ICC’s European distribution channels.

Brandon Boddy, Chief Executive Officer and Chairman of AgraFlora stated: “By way of astute acquisitions, synergistic partnerships and surgical execution, AgraFlora has grown from a $2.5Mil market capitalization to over $175Mil in rapid fashion.

The acquisition of Organic Flower instantaneously amplified our enterprise value by a factor of two, in addition to crystalizing our corporate roadmap as the Company prepares to enter the billion-dollar arena.

These tactical acquisitions from proven operators further augment our existing portfolio upstream cannabis assets with a suite cannabinoid-infused food/beverage product formulation and manufacturing assets. Turnkey solutions, including ingredient sourcing, manufacturing, testing and analytics, will further crystallize AgraFlora’s pole position as a thought leader throughout the next phase of cannabis normalization,” continued Boddy.
 

Library Of Patented Product Formulations

AgraFlora has also obtained the Canadian exclusive rights to a catalogue of cannabinoid-infused product formulations from a global formulation provider with over three decades of experience working with leading consumer product goods (“CPG”) brands. The Company has engaged a roster of food engineers, nutritionists and scientists to optimize bioavailability, consistent dosing protocols and flavouring of the AgraFlora’s licensed formulations.

AgraFlora will continue to leverage its production and processing assets, while further activating its downstream activities by launching cannabinoid-infused beverages, edibles and personal care products; specifically formulated with patented micro diffusion technologies.

These proprietary formulation and manufacturing processes are specifically adapted to ensuring consistent dose delivery, while maintaining taste and texture integrity. AgraFlora’s patented formulations will be adjusted based on a various production variables, including:

• Altitude

• Barometric pressures

• Production time of day; and

• Humidity
   

Unique Cannabinoid Delivery Systems Intellectual Property ("IP")

AgraFlora controls the exclusive rights to a portfolio of disruptive cannabis beverage delivery assets and intellectual property (IP). This acquisition will position AgraFlora as the industry’s sole Canadian manufacturer and distributor of an innovative beverage dispensing cap technology, equipped with a proprietary cannabinoid delivery mechanism.

The Company will incorporate its planned cannabinoid-infused beverages lines with its patented pharmaceutical-grade dispensing cap technology, as well as advanced delivery mechanisms, providing optimized ingredient effectiveness for the end consumers. Refined over five years, with research and development expenditures of $30 million, AgraFlora will leverage its exclusive rights to a marquee dispensing cap technology and delivery mechanism to revolutionize the North American cannabinoid-infused beverage marketplace.

The state-of-the-art delivery technology is certified for health care and pharmaceutical applications; AgraFlora anticipates that it will pioneer an elevated industry standard of quality.

The delivery mechanism boasts a patented airtight and moisture-resistant bottle cap to protect volatile ingredients such as cannabinoids, antibiotics, probiotics, vitamins and minerals resulting in superior shelf stability for infused bottled beverages. The dispensing cap technology allows for increased efficacy when compared with premixed beverages, which are susceptible to rapid nutrient deterioration.

Our Conclusion...

We think AGFAF has the potential for substantial short and longer term upside. 

AGFAF has a history of making big short term moves, and as it is trading just above its longer term lows, we think the longer term upside potential is big.

And of course the Company has a lot of positive things going on right now which will continue to be strong catalysts.

Get AGFAF on your screen and be ready for the opening bell.



All the best.

SmallCapMomo.com

picks@smallcapmomo.com

Remember our key trading rules when trading. Capital preservation is key. Keep your stops tight, and if things don't go your way, cut your losses and look for another opportunity.