Agra Ventures Amicably Exits Unprofitable Joint Venture

The Company Vended its Debt and Equity Interest in Propagation Services Canada Inc. for an aggregate of $250,000 and Nick Kuzyk has Resigned as an Officer & Director of the Entity, Among Other Closing Terms and Conditions

VANCOUVER, British Columbia, June 16, 2023 (GLOBE NEWSWIRE) -- Agra Ventures Ltd. (“AGRA” or the “Company”) (CSE: AGRA) (OTCPK: AGFAF), a company focused on the cannabis industry, announces that it has mutually agreed to effectively terminate and amicably exit the Propagation Services Canada Inc. (doing business as “Boundary Bay Cannabis”) joint venture (“BBC” or the “JV”) by way of executing a series of agreements (the “Agreements”) with its JV partner and related entities. Effective today, the Company has settled its debt receivable and sold its equity interest in BBC to its JV partner for an aggregate of $250,000 and Nick Kuzyk, CEO and Director of AGRA, has resigned as an officer and director of the JV.

In addition, a mutual release has been executed between AGRA, a wholly-owned subsidiary of AGRA, and their respective directors and officers; and BBC, the landlord, the JV partner and their respective directors and officers. By exiting BBC, the Company has taken a significant step toward stemming its tide of financial losses and, therefore, is now better positioned to preserve its current cash balance, pursue the collection of its remaining receivables, vend other non-core assets, and consider a strategic pivot in a more promising direction within the cannabis industry.

Over time, the JV partner’s talented team proved that it was able to successfully grow and process the high-potency Mimosa strain of cannabis using approximately 130,000 square feet of the 2.2 million square foot greenhouse complex. Despite selling essentially all of the bulk cannabis that was produced within the greenhouse facility in Delta, British Columbia, with the added assistance of an adept third-party wholesale cannabis brokerage firm in order to attract the best purchasers, high levels of supply resulting in declining market prices, combined with high operating costs, prevented the JV from being profitable at any time.

Since inception, BBC 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 as a Licensed Producer of cannabis in Canada. Therefore, AGRA and its JV partner amicably agreed to terminate the growing of cannabis after the 2022 growing season and exit the JV pursuant to the recently executed Agreements.