Welcome to iGrow News, Your Source for the World of Indoor Vertical Farming
Affinor Growers To Enter Aruban Market With Circular Farming Systems
Affinor Growers Inc. is nearly ready to plant its first seedlings and begin showcasing its vision of sustainable agriculture for a ten-year period
Green Cash Crop Funds
Leafy Greens Growth
Affinor Growers Inc. is nearly ready to plant its first seedlings and begin showcasing its vision of sustainable agriculture for a ten-year period. The company recently announced its lease agreement for a 15,000-square foot greenhouse.
The land is located in Abbotsford, British Columbia, and is reportedly divided between a 15,000-square foot greenhouse operation and a 12,000-square foot composting facility. With the Canadian spring beginning its transition into summer, Affinor Growers Inc. is looking forward to planting its first crops in the greenhouse by July 2021.
The new greenhouse site
Cannabis cuts profit margins differences
According to CEO and founder Nick Brusatore, the greenhouse will use vertical production techniques to maximize space efficiency in the greenhouse. The company currently plans to grow strawberries under one greenhouse bay, romaine lettuce under another bay, and eventually have a craft cannabis operation in another section. Affinor Growers is currently building out and getting ready to submit its craft cannabis license application to Health Canada but is content to begin with food crops for the time being. As Nick explains, his main goal in growing cannabis is to showcase sustainable production techniques and to increase the profitability of the entire system.
“We want to sustain our strawberry and romaine production, but food crops typically have lower margins. The high price of cannabis will allow us to grow even more strawberries and romaine lettuce by washing out the differences between profit margins. That way, we can deliver our products to the market at a good price and high quality.”
Greenhouse features
Continuing in its systems approach to agriculture, Affinor Growers Inc. also plans to reduce waste by composting organic materials and remediating its growing material. Altogether, the greenhouse and composting operation will allow the company to pursue its vision of high-quality, low-cost food production in a circular manner.
The greenhouse will also be completely automated, allowing the company to reduce labor costs by eliminating the need to move plants and materials manually. As Nick explains, the time between removing a crop from the greenhouse and replacing it with a new one takes a few minutes, as the plants are cut in the cooler and the soil replanted with new seedlings before being sent back into the greenhouse.
Vertically stacked cannabis
Entering Aruban market
While the 15,000-square foot greenhouse is located in British Columbia, the company is planning to take its vision into new markets and will begin with Aruba, according to Nick.
Nick explained that after having worked with the people and incorporating Vertical Designs Aruba VBA along with understanding the Country and Government needs after six years learning what is needed to mass-produce plant tissue, he has become attached to the country and has seen the need for circular farming systems. Affinor Growers Inc. will reportedly be building a farm near San Nicholas, in the southern region of Aruba.
Affinor Growers Inc. wants to work with Arubans to provide good jobs and economic benefits to the area. If all goes as Nick hopes, this project and others like it could increase tourism on Aruba’s southern side. Nick also explained that cannabis production is a possibility pending success in licensing application once the country’s laws and licensing are complete, this strategic move that will benefit agricultural capabilities in the long-term through the construction of infrastructure.
“We figured we would grow cannabis because the demand s high, so we can easily build-out. As the cannabis demand settles down globally over the next 5-10 years, the industry will have paid for massive food infrastructure without the government or taxpayers paying for it. In Aruba, we’re going to take a lot of that profit to create food infrastructure,” says Nick.
For more information:
Nick Brusatore, Founder and CEO
Affinor Growers
Publication date: Thu 22 Apr 2021
Author: Rebekka Boekhout
© VerticalFarmDaily.com
The Stock Market Discovers Indoor Ag In A Big Way
Special purpose acquisition companies are a faster cheaper way to raise company funds than the traditional IPO process. What role may they play in our ever growing vertical farming industry?
Robinhood antics aside, there’s no hotter topic in finance right now than SPACs (special purpose acquisition companies), and even indoor agriculture has become caught up in the buzz.
SPACs, or special purpose acquisition corporations, are a shell company that lists itself on a stock exchange and then uses the listing proceeds to acquire or merge with another company. It’s an attractive route to raising funds for companies looking for a faster and cheaper way to list than the rigours of the traditional IPO process.
Though SPACs have been around since the 1990s, they have had a reputation for being “the buyer of last resort”, primarily owing to a spate of failures in the early 2000s. The approach has once more taken off in recent years. There was nearly 8x as much raised in 2020 as in 2018, and 2021’s total has already surpassed last year’s[1]. The approach has become so hot that even Goldman Sachs junior investment bankers recently complained that they were burned out by the sheer volume of SPACs they’re working on[2].
This newfound enthusiasm is generally traced to a combination of tighter SEC regulations, efforts by cash-rich private equity companies to exit portfolio companies and fewer traditional IPO listings. Higher quality sponsors, such as 40-year old private equity firm Thoma Bravo, lead some to believe that things are different this time around. The lustre of famous SPAC participants – such as baseball player A-Rod and basketball legend Shaquille O’Neal – has helped things along.
Detractors point to post-listing underperformance by SPACs, high fees to sponsors and opaqueness around the acquisition of companies. SPAC rules mean that institutional investors sometimes get to see information on potential acquisitions ahead of retail investors.[3] On a recent Clubhouse chat, one investor compared SPACs to the risky no-revenue internet listings of the late 1990s. Another questioned whether retail investors’ appetite for such vehicles would cause greater market volatility[4].
Dan Bienvenue, the interim CEO of mega public pension fund CALPERs, recently described SPACs as “fraught with potential misalignment, potential governance issues”.[5] That said, similar dire warnings have accompanied the rise of many a new approach in finance, most recently equity crowdfunding, and have proven wrong as often as right.
As is so often the case in indoor agriculture, cannabis companies have led the way when it comes to SPACs, generally listing in Canada owing to the US federal prohibition on the crop. One example is Choice Consolidation Corp, which raised $150mm in February, and says that it plans to acquire “existing strong single-state operators”[6].
Historically, food-focused indoor agriculture companies have sourced little of their capital from public markets, preferring instead to work with private equity and strategic investors. To be sure, there is a small cadre of listed CEA firms, such as Canadian greenhouse operator Village Farms (TSE: VFF) and Canadian grow system tech company CubicFarm Systems Corp (TSXV: CUB) are exceptions to this rule.
All of that changed last month when Kentucky-based greenhouse company AppHarvest raised $475mm through NASDAQ listed SPAC Novus Capital. The funds will fuel the expansion of up to a dozen new farms through 2025.
Naturally, the move has led to speculation that vertical farms and greenhouses will follow suit, though it’s worth noting that the rules that govern SPACs aren’t necessarily friendly to CEA companies. They favour large, highly valued companies that easily capture the attention of retail investors, and those are not plentiful in CEA.
Regardless of whether the SPAC trend becomes a permanent feature of the indoor farm fundraising landscape, one more method of accessing capital for CEA can only be a good thing. For the moment at least.
For more information:
Contain
www.contain.ag
Note: None of the above constitutes investment advice.
Sources:
[1] SPACInsider figures
[2] “Goldman’s junior bankers complain of crushing workload amid SPAC-fueled boom in Wall Street deals”, CNBC, March 18, 2021
[3] For instance, where a PIPE is being considered by the SPAC
[4] “SPACS: IPO 2.0 & Agrifoodtech Exits”, March 4, 2021
[5] “CalPERS’ Bienvenue: SPACs are fraught with potential misalignment”, Private Equity International, March 16, 2021
[6] “New cannabis SPAC raises $150 million in IPO for US acquisitions”, Marijuana Business Daily, February 19, 2021
Publication date: Wed 24 Mar 2021
Author: Rebekka Boekhout
© VerticalFarmDaily.com
Agrify (AGFY) Enters Into Binding Letter of Intent For An Additional $3M Contract With Hannah Industries For Facility Build-Out And Installation of 179 Vertical Farming Units
Agrify Corporation (NasdaqCM: AGFY) (“Agrify” or the “Company”), a developer of highly advanced and proprietary precision hardware and software grow solutions for the indoor agriculture marketplace
February 19, 2021
Agrify Corporation (NasdaqCM: AGFY) (“Agrify” or the “Company”), a developer of highly advanced and proprietary precision hardware and software grow solutions for the indoor agriculture marketplace, today announced it has entered into a binding letter of intent, which sets forth the principal terms of a contract currently being negotiated with Hannah Industries (“Hannah”), a leading Tier 2 producer and distributor of cannabis in Washington State, for the design and build-out of an approximately 30,000 square foot facility. The contract will include facility build-out services in total of $3 million and annual SaaS revenue of approximately $285,000. Such payments will be financed by Agrify, are to be made monthly over a two-year period commencing upon the first successful harvest, and will reflect an APR of 25%. The agreement for this design and build-out will be in addition to the previously purchased 179 Vertical Farming Units (“VFUs”) and is part of Agrify’s turnkey solution to its customers. The work is expected to be completed by early Q4 2021, subject to entry into a definitive agreement.
Small-cap stocks have been on the upswing since March—but not all small caps are created equal. For the long term, small caps that have grown their dividends consistently may be a more attractive investment opportunity. Find out why. Read More
“We are especially proud to be selected by Hannah Industries, a leading producer and distributor in the State of Washington. Their decision to upgrade from the traditional grow methodology to Agrify’s integrated vertical farming solution is the strongest testimony of our joint belief that Agrify’s solution will help Hannah Industries to produce the highest quality cannabis flowers consistently. We’re thrilled to have been chosen again by Hannah for the facility design, construction, and installation of our proprietary and advanced grow solutions,” said Raymond Chang, Chief Executive Officer of Agrify. “Agrify VFUs and Agrify Insights software should also help Hannah realize increased levels of automation, control, transparency, and repeatability. We expect this will be a great win for our team, and we look forward to working with Hannah to successfully implement it.”
“The current market is very competitive, and consumers have lots of options. One of the most important things to our business is being able to deliver a consistent, high-quality supply of cannabis to our retail partners,” said Jason Whitney, Chief Executive Officer of Hannah. “The Agrify grow system and software allow us to have an extremely high level of control over the grow, helping us meet our customers’ needs. In addition, the information Agrify Insights software provides will allow our team to make real-time decisions on supply chain management based on feedback from our customers. This evolution in the industry is one of the reasons we are extremely pleased to be implementing the Agrify solution for our cultivation facility.”
Despite Hemp Legalization, FDA Will Still Consider CBD Products Largely Illegal
FDA maintains hemp oil is a drug ingredient, and requires approval for products.
Published: Dec 23, 2018
Reuters
By ASSOCIATEDPRESS
SEATTLE — The hemp industry still has work ahead to win legal status for hemp-derived cannabidiol, or CBD oil, as an ingredient in food or dietary supplements despite the big farm bill President Donald Trump signed last week designating hemp as an agricultural crop.
CBD oils have become increasingly popular in lotions, tinctures and foods, but their legal status has been murky and the Food and Drug Administration has sent warning letters to some companies making health claims for CBD.
In a statement following Thursday’s bill signing in Washington, FDA Commissioner Scott Gottlieb restated his agency’s stance that CBD is a drug ingredient and therefore illegal to add to food or health products without approval from his agency.
“Selling unapproved products with unsubstantiated therapeutic claims is not only a violation of the law, but also can put patients at risk, as these products have not been proven to be safe or effective,” Gottlieb wrote.
CBD is a non-psychoactive compound found in hemp, a version of the cannabis plant that is low in THC, the part of cannabis that gives pot its high.
An FDA-approved drug for the treatment of seizures, Epidiolex, contains cannabis-derived CBD. GW Pharmaceuticals’ GWPH, +3.72% syrup became the first prescription drug derived from the cannabis plant in June.
The FDA statement also specified parts of hemp that are safe as food ingredients, but the CBD stance disappointed advocates. Courtney Moran, a lobbyist for Oregon hemp farmers, said she plans to work with U.S. Sen. Ron Wyden, an Oregon Democrat, to nudge the FDA toward greater acceptance of CBD.
“We do hope the FDA does clear a pathway for these products that have already hit store shelves and are out in the marketplace,” Moran said. She said it’s an “opportunity for industry to educate the FDA.”
The FDA statement said three ingredients derived from hemp — hulled hemp seeds, hemp seed protein and hemp seed oil — are safe as foods and won’t require additional approvals, as long as marketers do not make claims that they treat disease.
Hemp, like marijuana, already was legal in some states before Trump signed the farm bill. But now hemp farmers will be able to buy crop insurance, apply for loans and grants, and write off their business expenses on their taxes like any other farmer.
iGrow Blog - News Stories And Analysis of Stocks In The Cannabis Industry
iGrow Blog
Welcome!
I am thrilled to welcome you to my blog.
Every week, I will provide news stories and analysis of stocks in the cannabis industry from an informational and educational perspective only.
These are exciting times for the cannabis industry.
With the fast changing pace of the industry as increasing numbers of players are moving into the space, there’s lots to write about.
So welcome aboard and check back in weekly for new articles.
Stella Osoba CMT
Technical Analyst and Writer
Disclaimer
If you wish to invest in any of the companies I mention in this blog, you must do your own due diligence and your own research. You must make sure that you fully understand the risks of investing in any of the companies mentioned. You must make sure that it fits with your investment goals. Nothing in this blog is to be construed as investment advice and I do not recommend any of the stocks I mention as suitable for any form of investment. The information provided is for educational purposes only.