Agrify Corp. is selling its cannabis cultivation operation for $7 million to an investment firm affiliated with the company’s former CEO, Raymond Chang.
According to a Monday news release, the Troy, Michigan-based operator sold the unit to CP Acquisitions, which is affiliated with Chang.
Chang resigned from Agrify’s top post and as board chair in a November management shake-up.
Transaction details
According to the release, the transaction includes:
- Vertical farming units, related assets and Agrify Insights software applications.
- Assumption of liabilities related to the cultivation business.
- The termination of two convertible notes held by CP Acquisitions totaling roughly $7 million.
“We believe focus drives excellence and this move allows us to focus on more attractive growth categories tied to THC demand,” Agrify Chair and interim CEO Ben Kovler said in a statement.
Kovler, who has long served as the CEO of Chicago-based multistate operator Green Thumb Industries, was appointed to lead Agrify after a GTI subsidiary recently provided $20 million in funding to the company.
In Agrify’s Monday release, Kovler highlighted the company’s hemp-derived THC delta-9 beverage lines, including its low-calorie THC-infused margarita Señorita, which is sold in nine states and online directly to consumers.
Chang said separating business segments will allow Agrify and the acquired cultivation operation to better concentrate efforts going forward.
Agrify’s recent moves
Before the financing agreement, the unidentified GTI subsidiary acquired an ownership stake in Agrify through the purchase of common stock and warrants from Chang and I-Tseng Jenny Chan, who also stepped down from Agrify’s board in November.
Chan, a major Agrify investor, sold her entire stake in the company for $18.3 million, Investing.com reported, citing a Nov. 5 regulatory filing.
The investment site also noted several recent moves by Agrify to tighten its financial position, including amending credit agreements and establishing new partnerships to expand business opportunities.
Shares of Agrify trade on the Nasdaq stock exchange as AGFY.
The company had been noncompliant with Nasdaq listing rules until it converted $13.8 million of debt to equity in May.
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