Cannabis company pulls plug on Delta greenhouse partnership
Added on 23 June 2023
Agra Ventures Ltd., which had a partnership with Houweling Nurseries on 64th Street in a venture called Propagation Services Canada Inc., also known as Boundary Bay Cannabis, announced on Friday it has “mutually agreed to effectively terminate and amicably exit” the joint venture by way of executing a series of agreements with its partner and related entities.
The company said it has settled its debt receivable and sold its equity interest in Boundary Bay Cannabis to its joint venture partner for an aggregate of $250,000.
Nick Kuzyk, CEO and Director of Agra Ventures, has resigned as an officer and director of the joint venture.
The company also said it has taken a significant step towards stemming its tide of financial losses and is now better positioned to preserve its current cash balance, as well as consider a strategic pivot in a more promising direction within the cannabis industry.
Agra Ventures said it has used approximately 130,000-square-feet of the 2.2 million-square-foot Delta greenhouse complex and, despite selling essentially all of the bulk cannabis that was produced within the greenhouse, and with the added assistance of a third-party wholesale cannabis brokerage firm to attract the best purchasers, high levels of supply resulting in declining market prices, combined with high operating costs, prevented the joint venture from being profitable at any time.
Since inception, Boundary Bay Cannabis “had accumulated approximately $25 million in losses and was not expected to record net income in the foreseeable future, due to unfavourable industry conditions, an onerous regulatory framework, and unattractive competitive dynamics.”
Photo: It's been a similar story for other growers, as well as retailers, across Canada since the product was legalized in 2018, as over-supply, high costs and plummeting prices forced many to close their doors or scale back. Agra Ventures photo.
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