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  Marijuana  Agrify Sells Cannabis Cultivation Business for $7 Million
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Agrify Sells Cannabis Cultivation Business for $7 Million

Lars BeckersLars Beckers—January 7, 20250
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Agrify Corp., a Michigan-based operator, has announced the sale of its cannabis cultivation business for $7 million. The deal was finalized with CP Acquisitions, an investment firm linked to Agrify’s former CEO, Raymond Chang. The move comes after a series of strategic shifts aimed at refocusing the company’s efforts on more lucrative opportunities in the THC market.

Former CEO’s Role in the Sale

Raymond Chang, who resigned as Agrify’s CEO and board chair in November during a leadership overhaul, is at the center of this transaction. CP Acquisitions, the buyer, is affiliated with Chang, making this a notable transition of assets to a familiar party.

The deal includes Agrify’s vertical farming units, related assets, and its proprietary Agrify Insights software. Additionally, CP Acquisitions will assume liabilities associated with the cultivation business.

Perhaps most critically, the transaction terminates two convertible notes held by CP Acquisitions, valued at approximately $7 million. This financial arrangement marks a significant shift for Agrify, aligning with its broader strategy of shedding non-core operations.

Agrify’s Strategic Refocus

Agrify’s interim CEO, Ben Kovler, emphasized the importance of prioritization in a statement. “We believe focus drives excellence, and this move allows us to concentrate on more attractive growth categories tied to THC demand,” Kovler said.

Kovler, who also serves as the CEO of Green Thumb Industries (GTI), took the helm at Agrify following GTI’s $20 million funding boost to the company. Under his leadership, Agrify has pivoted towards expanding its hemp-derived THC delta-9 beverage lines. Products like Señorita, a low-calorie THC-infused margarita, have gained traction in nine states and online markets, representing a promising revenue stream.

Recent Developments in Agrify’s Financial Landscape

This latest sale is part of a series of moves aimed at stabilizing Agrify’s financial standing. Before this deal, a GTI subsidiary acquired a stake in Agrify by purchasing common stock and warrants from Chang and another major investor, I-Tseng Jenny Chan. Chan sold her entire stake in Agrify for $18.3 million, according to regulatory filings.

The company has also restructured credit agreements and pursued new partnerships to enhance its financial position. Notably, Agrify recently converted $13.8 million of debt to equity, regaining compliance with Nasdaq listing rules.

Agrify’s shares, traded on the Nasdaq under the ticker symbol AGFY, reflect the company’s ongoing efforts to recover and reposition itself in a competitive market.

A Closer Look at the Transaction

The details of the sale provide insight into Agrify’s priorities and financial strategy. Key elements of the transaction include:

  • Transfer of vertical farming units and Agrify Insights software.
  • Assumption of cultivation-related liabilities by CP Acquisitions.
  • Termination of $7 million in convertible notes held by the buyer.

By offloading these assets and obligations, Agrify aims to focus its resources on high-growth segments of the THC industry, particularly in the beverages market.

Future Prospects for Agrify and the Cannabis Industry

Separating its cultivation business from its core operations allows Agrify to streamline efforts and capitalize on emerging trends. Meanwhile, CP Acquisitions, under Chang’s leadership, could leverage its newly acquired assets to establish a competitive edge in cannabis cultivation.

This transition highlights a broader trend in the cannabis industry, where companies are refining their business models to adapt to shifting market dynamics and consumer demands.

Agrify’s journey, from leadership changes to financial restructuring and strategic divestitures, underscores the challenges and opportunities within this evolving sector. For investors and industry watchers, the company’s next steps could offer valuable insights into the future of cannabis-related ventures.

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Lars Beckers

Lars Beckers is a distinguished senior content writer at MMJ Gazette, bringing a wealth of experience and expertise to the realm of medical marijuana and cannabis-related content. With a deep understanding of the industry and a passion for sharing knowledge, Lars's articles offer readers comprehensive insights and engaging narratives in the dynamic world of cannabis. Known for his meticulous research, clarity of expression, and commitment to delivering high-quality content, Lars brings a seasoned perspective to his work, educating and informing audiences on the latest trends and developments in the field.

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