Flora Growth Corp. (NASDAQ: FLGC) seems to be on an upward trajectory with a steady stream of recent acquisitions. The Colombian cultivator, manufacturer, and distributor of international cannabis products and brands with offices in the US and Canada completed in September its first exports of dried cannabis flower with a high CBD content from Colombia to Switzerland and the Czech Republic along with CBD isolate to the United States. Switzerland may become a market of interest for companies in the industry, as it launched a pilot project this summer to begin adult-use cannabis sales in Basel, to test the sustainability of a fully legal recreational market.
“As our global distribution network continues to evolve, adding these three industry-leading countries to our footprint is a major milestone for Flora,” commented CEO and Chairman Luis Merchan. “Our cultivation operation in Colombia, which provides high-quality, high-margin flowers and derivatives, has experienced increasing demand. These exports are a testament to our team’s ability to execute in a very complex global regulatory environment and create new commercial revenue for our company.”
With this news, Flora also launched its online store, where authorized customers may place orders for high-THC and high-CBD dry flowers as well as related items.
Merchan elaborated: “We are very proud of the progress we’ve made at our cultivation and extraction facility in such a short amount of time. We now have the capability to cultivate, harvest, and extract at a single facility and deploy that extract into our owned products or sell on the wholesale market around the world. When you think about the compounding value of owning our own supply chain, this becomes the cornerstone of that formula.”
“We are also proud to help increase access to safe, legal CBD and THC to consumers all over the globe,” Merchan continued. “We look forward to working closely with our partners in Europe and North America to bring high-quality Colombian cannabis products and raw materials to market.”
Alongside these new markets, Flora Growth announced that its Florida-based subsidiary, Just Brands LLC, acquired nearly all the assets related to the brand No Cap Hemp Co. At closure, the company did not pay any compensation for the No Cap assets. Instead, Flora will pay to the sellers 10% of the gross revenue received from the sale of No Cap products up to a maximum of $2 million USD.
“This transaction will allow Flora to immediately benefit from a profitable, cash flow positive and growing business,” said Merchan. “This strategic acquisition demonstrates our disciplined capital allocation approach that is consistent with both short-term needs and long-term vision as a leading global cannabis company. We look forward to increasing our product offering through this transaction while broadening our sales team in the process.”
The No Cap purchase would hasten the addition of premium flowers, pre-rolls, and smokeable to Flora’s expanding product lineup as well as Just Brands’. The No Cap brand will be supplied via Flora’s approximately 14,000 points of sale, and Just Brands would further develop their flower and smokeable portfolio.
The No Cap purchased assets, together with the “No Cap” and “Moonblunt” trademarks, are anticipated to add about 75 SKUs to Flora’s product line. Meanwhile, Flora Labs’ production capacity should be complemented by No Cap’s gas infusion technology.
“No Cap’s unique product offering coupled with JustCBD’s robust distribution positions Flora to be the leader in the alternative cannabinoid segment,” Merchan assured. Flora had completed the acquisition of JustCBD in February, which provided the company with a portfolio of 300 products, a direct-to-consumer business with 300,000 customers, and a network of 14,000 stores in the world.
These recent acquisitions have helped Flora Growth in securing the Best M&A Deal award at Benzinga’s 2022 Cannabis Capital Conference in Chicago, on September 13. According to Merchan, this prize “recognizes our strategic M&A objectives including acquiring products, expertise, expanding distribution, and customers.”
Recent financial figures for the first quarter of 2022 from Flora Growth showed a rise in sales to $15 million USD, up 604% from the first quarter of 2021 and 117% from the second quarter of 2021. As for the CBD market worldwide, the industry is anticipated to grow from $4.9 billion USD in 2021 to $47 billion USD by 2028.
Photos courtesy Flora Growth