Agrify aims to be the fastest growing cannabis company – TechCrunch
Agrify is currently selling computerized vertical farming units for cannabis. But that’s just the starting point for Agrify. The company is rapidly going vertical itself, adding features and acquiring more businesses as it builds a full solution provider for the cannabis industry.
Cannabis is one of the most valuable crops in the United States. According to Leafy’s Cannabis Harvest Report 2021 (PDF), the value is estimated at 6.2 billion US dollars – and that’s only in the 11 states where adult retail purchases are legal.
Cannabis farmers, like any other commercial farmer, employ myriad systems to increase yields and maximize taste, size, and shelf life. Often these farmers use multiple platforms from multiple providers. As every CTO knows, this is normal in 2021. Agrify wants to change this approach.
Aiming to be the grower’s only system, Agrify sells a platform that provides unparalleled control over the growing process. Thanks to two recent acquisitions, the company will also provide a similar system for the extraction process, which will allow its customers to grow, harvest and process cannabis with just one system. And the company doesn’t want to stop there. CEO Raymond Chang tells me that he sees Agrify as one of the fastest growing and most vertically integrated solutions in the cannabis space.
Raymond Chang co-founded the company in 2016 and raised $ 4.5 million in two funding rounds. Instead of looking for additional venture capital, Chang floated the startup in January 2021. The company’s stock hit the market at $ 12.74 and climbed to an all-time high of $ 33.06 in August before falling to $ 15 in October. At the time of writing, the stock is rising and rapidly approaching its all-time high.
Although the company is in the cannabis space, it is listed on the Nasdaq because Agrify does not bundle cannabis with its equipment. It is considered a subsidiary of the cannabis industry that does not touch plants. This is important. The company bypasses all regulatory hurdles that plant-touching cannabis companies face, including restrictive banking and fundraising laws.
Chang doesn’t regret making Agrify public. There are pros and cons, he said, noting the company needed to be more disciplined and transparent, but the IPO resulted in a godsend.
“We were able to acquire these two really great extraction companies [Precision Extraction Solutions and Cascade Sciences]”Said Chang,” partly because we are public. We can do this in cash and with [company stock] Shares. The internal goal is to fill two thirds of the growth organically, but one third should come from acquisitions. That is why we will continue to consolidate this industry. And having this public currency is a big plus. “
Agrify’s growing platform starts with genetics. Growers choose from a list of preselected strains that work with the Agrify system. Because the system operates at a known amount, the platform can maximize yield by controlling several important variables, including lighting, watering, and humidity. There are no more guesses. Select the genetics and let Agrify’s system bring them from the seed to the store.
The company’s high-tech vertical farming units (VFUs) are key to its operation. These grow shelves house and grow high quality plants like cannabis, hemp, and other herbs. The units are stackable so that cultivators can grow two sets of plants with the footprint of one. Gang planks connect the units.
“I see consistent consistency problems growing, and it’s even worse with Cannabis 2.0 products,” said Chang.
Agrify sees two options for its customers: Either they send their raw harvest to a processor or they process it themselves. Of course, Agrify would like the producers to choose the latter.
The company recently spent $ 50 million to purchase Precision Extraction Solutions and Cascade Sciences, two leading companies in the extraction and processing of cannabis and hemp. According to Agrify, these two companies previously worked with 30 multi-state operators and over 1,000 cannabis and hemp customers. Through this transaction, Agrify will have a physical presence in seven states.
“We have a few more companies to acquire,” said Chang. “For customers, it’s all about how we can help them increase their return on investment. It’s about a better use of space and the pursuit of higher yields, the pursuit of lower costs and simply more automation. “