AgraFlora Organics Secures Deal with Chinese Distributor

AgraFlora Organics International Inc. expects to seize a significant share of the Chinese CBD market after securing a deal with distributor YuShop.

Nathan Halsey set up YuShop in Hong Kong back in 2010 to serve as a “gateway to Chinese shoppers” for companies across a number of industries. AgraFlora’s 50% owned JV, Eurasia Infused Cosmetics Inc., has tied up a deal with YuShop and it expects to enjoy rapid growth in the world’s most populous country.

YuShop will use hyper-targeting of 1.08-billion WeChat users to sell the CBD-infused products across the country. AgraFlora’s internal forecasts expect it to reach more than 1.5 million per month by Q2 2020.

“We are very optimistic for a full-scale Asian commercialization campaign of Eurasia Infused’s comprehensive CBD product suite,” said AgraFlora chief executive Brandon Boddy.

Cannabis and its derivatives are illegal in China, so the CBD products will be derived from hemp. AgraFlora is developing organic cosmetics, shampoos, and sunscreens specifically tailored for the “Asia Pacific theatre”.

It will also launch pop up shops under its Whole Hemp Health brand across China in Q2 2020 to boost its downstream footprint and brand presence, while targeting distribution initiatives at 1,500 luxury health spas.

AgraFlora is building out a facility in Delta and it should be fully operational next year. It will have annualized capacity of 250,000 kg, making it one of the top five largest producers in Canada.

Yet its market cap is below $220 million and it has long argued that it is undervalued. The firm’s share price increased from $0.28 on Jan. 2, 2019, to $0.79 by Mar. 21, but it has steadily decreased since then and opened at $0.26 today.

Earlier this year, it set up operations in Greece and increased capacity at its brewery by 30% to 130,000 hl in a bid to crack the cannabis beverages market.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Martin Green
Martin Green is an experienced journalist with a strong focus on the cannabis, alcohol, and gambling industries. He is particularly interested in the political issues affecting the global marijuana trade, and he has a keen focus on regulation changes and legal topics. He holds a BA English Literature, MA Creative Writing and a National Qualification in Journalism diploma. He has worked in journalism since 2009 and written for a broad range of newspapers, business titles and magazines, including The Sun, The Metro, The Journal, Livestrong, Drinks Retailing News, Harpers, Sportsbook Review, Vital Football, Essex Live and Surrey Live. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.

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