AgraFlora Stock (CNSX:AGRA) (OTCMKTS:AGFAF): Is It A Buy Right Now?

Despite currently trading near its record-lows at about $0.08, AgraFlora Stock (CNSX:AGRA) (OTCMKTS:AGFAF) stands out as one of the promising cannabis stocks in 2020. You are about to find out why now may be the best time to add AgraFlora to your cannabis stock portfolio. But first it is important to know how we got here. Investors will very well remember that 2019 was a disappointing year for cannabis stockholders. That explains why you spot AgraFlora near its all-time lows.

A confluence of factors contributed to the big plunge in cannabis stocks last year. They included uncertainty over Canada’s national election. Investors panicked and sold off cannabis stocks on fears that Prime Minister Justin Trudeau’s Liberal party would lose to the Conservatives in the national polls. Investors feared that a conservative government would roll back the cannabis legalization gains achieved under the Trudeau administration.

Another reason why investors dumped cannabis stocks last year was due to fears that a shortage of cannabis shops in Ontario would hamstring rapid development of Canada’s legal cannabis market. The good news is that these concerns are no longer there, and that means a bright outlook for AgraFlora in 2020.

About AgraFlora Stock

AgraFlora is a diversified Canadian cannabis company that serves both the domestic and international markets. It operates cannabis grow facilities in Ontario and has taken to opening farm-gate retail stores to address the problem of cannabis shops shortage in the province.

Canada last year expanded its cannabis market with the legalization of more cannabis products for adult-use. These include cannabis edibles, drinks, and smoking devices or vape pens. AgraFlora is one of the cannabis companies that have positioned themselves well to capitalize on Canada’s expanded cannabis market in order to deliver great value for shareholders. But AgraFlora isn’t just confined to the Canadian market. The company also boasts a global reach with footprints in Asia and Europe.

Here are some of the steps AgraFlora has taken to grow its business for the long-term and why you would love the stock.

AgraFlora makes strategic acquisitions to accelerate its expansion domestically and abroad

AgraFlora recently purchased two cannabis businesses that promise to supercharge its growth as well as diversify its product portfolio and markets.

On January 3, AgraFlora closed the acquisition of Farmako, a German-based European cannabis business. Farmako operates as a distributor of medical cannabis products. Though based in Germany, Europe’s largest economy, Farmako serves customers in the UK, Luxembourg, and Denmark as well through affiliate companies. In 2019, Farmako generated $3.1 million in revenue and made more than $1.4 million in gross profit. Therefore, the Farmako acquisition brings an instant boost to AgraFlora’s top and bottom lines. Moreover, Farmako acquisition now means AgraFlora controls 8.0% of Germany’s cannabis market.

On December 5, AgraFlora announced it would purchase Sanna Health Corp, a Canadian company with licenses to grow, process and sell cannabis products in the country. AgraFlora expects the acquisition of Sanna to more than double its 2020 cannabis production. Moreover, the acquisition will see AgraFlora add market-leading cannabis products to supplement its existing brands.

AgraFlora secures important sport marketing and export deals

AgraFlora has secured a deal with Toronto Wolfpack to advertise its HowlBrands line of cannabis products on the club’s jersey during the 2020 RLF Super League season.  AgraFlora counts on the arrangement with Toronto Wolfpack to achieve valuable exposure that would, in turn, increase the sale of its HowlBrands product line.

In addition to the sports marketing arrangement with Toronto Wolfpack, AgraFlora has also teamed up Eurasia Infused to export its HowlBrands products for sale in Japan and Hong Kong. The arrangement with Eurasia Infused helps AgraFlora unlock a larger market opportunity for its HowlBrands products.

AgraFlora solves Ontario cannabis shops shortage with farm-gate retail outlets

Ontario is Canada’s most populous province, thus an important market for cannabis companies like AgraFlora. However, the cannabis business has been slow to take off in Ontario because of a shortage of cannabis shops. AgraFlora has figured out how to overcome this challenge. The company is opening farm-gate retail outlets at its production facilities. It is a strategy that will help AgraFlora boost both its sales and profit margin in Ontario.

Bottom line

AgraFlora has taken important steps to position its business for long-term growth and shareholder value creation. Though presently trading at $0.08, AgraFlora stock looks poised for a major breakout in 2020 as more investors come to realize the tremendous opportunity.

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Disclosure: We have no position in AgraFlora Stock and have not been compensated for this article.