Target Group Inc (CBDY)

[BlueGreenPower]

**NEWS** Thrive Announces Supply Agreement with Leading Israeli Cannabis Company

https://www.globenewswire.com/news-release/2020/07/30/2070187/0/en/Thrive-Announces-Supply-Agreement-with-Leading-Israeli-Cannabis-Company.html

Looks like Target's JV partner Thrive has signed a cannabis supply agreement that could potentially sell the entire output of Target's Canary RX facility into the Israeli medical market. Thrive intends to build a long-term relationship in Israel to supply up to 500 kg of premium dried flower per month for Israeli medical patients.

This would use up Canary's entire projected yearly output of (3,600 kg) for exports to Israel. Thrive must have a plan to increase Canary's capacity by adding more grow rooms, or growing vertically to double capacity, or both. If Thrive can achieve it's goal to sell up to 6,000 kg into the Israeli medical market then the Canary facility should be in full production year round.

This agreement seems like more than just the usual pie in the sky announcements you sometimes get from cannabis companies about large future exports that never materialize, because Thrive's initial orders have already shipped from Canada. Thrive's CEO stated he expects the agreement to provide an immediate boost to volume and revenues.

If Thrive can sell 6,000 kg (6,000,000 grams) yearly in Israel at an average wholesale price of $5 per gram then the agreement would generate approximately $30M annually for the Thrive/Target JV. The only fly in the ointment is how quickly they can expand capacity to supply both the Canadian and Israeli markets. Not a bad problem to have, but one that must be solved quickly to capitalize on the opportunity as soon as possible.

Liking what I'm seeing from the Thrive/Target management teams to get their joint venture off and running in the right direction. imho glta