Agrify Corporation (Nasdaq:AGFY)(“Agrify” or the “Company”), the most innovative provider of advanced cultivation and extraction solutions for the cannabis industry, announced it has signed a definitive agreement for its Agrify Total Turn-Key Solution (“Agrify TTK Solution”) with Loud Wellness Inc. (“Loud Wellness”), a New Jersey-based cultivation and manufacturing operator. Loud Wellness is one of only eight awardees that received both the Class 1 Cultivator and Class 2 Manufacturer licenses in New Jersey.
With the nascent New Jersey recreational cannabis market expected to top annual sales of $2 billion within a few years to rival neighboring New York and Massachusetts as reported by MJBizDaily, Loud Wellness is very well positioned to capture market share. As one of only eight vertically integrated operators in New Jersey with both cultivation and manufacturing licenses, Loud Wellness is hoping to leverage the technology, services, and support offered through the Agrify TTK Solution to produce the highest quality and most diversified product portfolio ranging from top premium flowers to other concentrated products. In addition, Loud Wellness has joined forces with Rowan University to study cannabis cultivated using Agrify’s Vertical Farming Units (“VFUs”) with the goal of uncovering the plant’s benefits at a deeper level. Lastly, Loud Wellness is led by a team of highly capable, experienced individuals committed to success including Turk McBride, former NFL player and pioneer in the cannabis industry, and Pedro “Pete” Demorejon, Cultivation Manager, former MLB pitcher, and cannabis industry veteran personally holding more than 100 cultivars and former director of Florida’s first legal grower.
The terms of the 10-year agreement entered into with Agrify include the installation of 500 VFUs, along with the use of the fully integrated Agrify Insights™ software, at Loud Wellness’ Glassboro, NJ facility – initially having 50,000 sq. ft. allocated to cultivation, 20,000 sq. ft. for manufacturing, and an 8,500 sq. ft. research center with an additional 50,000 sq. ft. available for expansion. Under the agreement, Agrify will also provide architectural and engineering services, operations consulting, and brand licensing. The engagement is expected to generate approximately $100 million in production success fees, based on a conservative 35 pounds annual dry-flower production per VFU, and approximately $18 million in SaaS software fees for Agrify during the 10-year term of the agreement. Upon securing additional third-party financing, Agrify may provide Loud Wellness up to an $18 million construction loan based on its standard TTK terms.
“For the industry we serve, having superior products alone is not enough to guarantee success. Being easy to do business with is also imperative, which is why we offer our full-service Agrify TTK Solution as a way to remove unnecessary friction for companies such as Loud Wellness, who have a variety of other challenges they face including trying to navigate the regulatory complexities of social equity licensing in states like New Jersey,” said Raymond Chang, CEO of Agrify. “We are confident that our VFUs, along with our integrated Agrify Insights software, will provide Loud Wellness with the independent and precise control over its cultivation environment, grow recipes, and production planning needed to maximize their yields, consistency, quality, and ROI.”
“One of Loud Wellness’ core values – and key to our brand promise – is the cultivation and production of high-quality cannabis products giving our customers a consistent experience they can trust,” said Tony Payton, Loud Wellness Founder and Board Member. “While this is certainly important for our direct markets of dispensaries and wholesalers, this is especially critical for our Alternative Treatment Centers market where the high quality, consistent, regulatory-compliant, and agile cultivation capabilities differentiate Loud Wellness to give us a competitive edge. After thoroughly evaluating other commercial cultivation options, only Agrify’s VFUs with its built-in Agrify Insights software was capable of supporting our batch cultivation strategy – inspired by micro-brewery beer manufacturing – where carefully selected small batch products for tailored outcomes maintain exclusivity due to scarcity and attract higher values.”
