Agra Ventures secures recurring revenue stream through subsidiary's cannabis offtake agreement

Agra Ventures Ltd. (CSE:AGRA, OTC:AGFAF) said its wholly-owned subsidiary, Propagation Services Canada Inc. doing business as Boundary Bay Cannabis, has signed a cannabis offtake agreement for an initial period of six months, securing a recurring revenue stream for the company. 

The offtake agreement specifies the recurring monthly purchase of a defined minimum quantity of cannabis in dried flower form, with a minimum range of THC content, terpenes and other specifications, said Agra Ventures in a statement. 

No details on price or volume were disclosed due to the confidentiality clause within the agreement, added the company. 

“Management expects that this is merely the start of a regular and foundational revenue stream for the company. This offtake agreement is consistent with our previously announced business-to-business sales strategy,” said Elise Coppens, CEO and Director of Agra Ventures. 

“In today’s market, licensed producers of cannabis are looking for consistency in the supply of their bulk product and we will be working hard to provide just that,” said Coppens, adding that she sees “brighter days ahead” for Agra Ventures.

READ: Agra Ventures looking to be a top cannabis player in Canada and Europe

The contract’s initial six-month term may be renewed for a term of equal length if not terminated by either party while the delivery date of the first order will be on or before November 23, 2021.

The offtake agreement marks a significant milestone for the company as it formalizes, for the first time, the ongoing sale of Boundary Bay Cannabis products grown at the Delta greenhouse complex.

The new relationship was originally brokered by a separate third party and Agra Ventures has agreed to pay the broker an average rate of 4.9% on all sales over the term of the contract.

Story by ProactiveInvestors