- Flora Growth is uniquely positioned to achieve revenue growth, with a
balance sheet supported by two successful financings and the recent
launch of multiple operating divisions
- The company boasts a robust M&A pipeline featuring strategic
targets with near-term revenue growth opportunities and global
distribution channels
- Flora Growth is led by an exceptional management team featuring
cannabis, CPG, and capital markets experts who have raised more than $3
billion in combined public financings
- The company’s brand portfolio features 280+ products, 70+ medical
and cosmetic licenses, and 2,500+ points of distribution across Latin
America and the U.S.
- Flora Growth has a healthy balance sheet with minimal debt; the
company reported a cash balance of $25.3 million with long-term debt of
just $0.7 million as of April 19, 2021
- The company’s all-natural, outdoor cultivation operations allow for
production costs below $0.06 per gram – roughly 60% lower than its
closest peer
Flora Growth (NASDAQ: FLGC)
is an internationally focused cannabis brand builder that leverages
natural, cost-effective cultivation practices to supply cannabis
derivatives to its diverse business divisions, including cosmetics, hemp
textiles, and food and beverage. Flora Growth operates one of the
largest outdoor cultivation facilities in the world with an aim of
marketing a higher-quality premium product at below-market prices. By
prioritizing natural ingredients and value-chain sustainability across
its portfolio, the company creates premium products that help consumers
restore and thrive.
Flora Growth completed the first traditional cannabis IPO on Nasdaq
in May 2021. Although currently headquartered in Toronto, Ontario, with
plans to relocate its head office to Miami, Florida, the company’s base
of operations is in Colombia, where it has built an extensive distribution network that includes Colombia’s largest distributors.
Currently, Flora Growth is organically growing market share for its
existing brand portfolio (pharmaceuticals, textiles, cosmetics, and food
& beverage) while seeking revenue-generating acquisitions that
offer an accretive distribution network to amplify revenue growth.
Existing Brand & Product Portfolio
Flora Growth’s portfolio spans a number of verticals – each with a
thoughtful brand designed to resonate with its intended end consumer. In
line with the company’s mission, each brand prioritizes natural
ingredients and value-chain sustainability.
Flora Lab S.A.S
Flora Lab is the company’s GMP certified manufacturing and R&D
center focused on producing pharmaceuticals, cosmetics, and
nutraceuticals for domestic and international markets. Its offerings
include product lines that are private label, white-label, and custom
formulas.
Through Flora Lab, Flora Growth has relationships with 1,500+
distribution channels, manufactures 63+ OTC products registered with
INVIMA (Colombia National Food and Drug Surveillance Institute), and
holds multiple GMP certifications enabling international export in an
effort to leverage Flora Lab’s capacity to produce a wide range of
CBD-infused products.
Flora Beauty
Flora Beauty is the company’s CBD beauty and cosmetics division
founded by fashion and beauty industry icon Paulina Vega. Its current
offerings include two CBD skincare brands targeting the U.S. and Latin
American markets – MIND NATURALS and AWE. These lines exemplify Flora
Growth’s socially conscious approach to business.
Currently, Flora Beauty products are offered globally through
e-commerce, as well as through Falabella’s 111 retail locations across
Latin America. The company is in negotiations with major department
stores to launch the line in the U.S. and is also exploring
opportunities in the U.K. and other European markets.
KASA Wholefoods
KASA Wholefoods is a Colombian manufacturer of food and beverages
leveraging responsibly sourced exotic fruits from the Amazon. KASA has a
$10 million+ distribution agreement with Tropi, Colombia’s largest food
distributor, which has 130,000+ distribution points across the country.
Mambe, KASA’s leading brand, is already offered through over 980
distribution points across Colombia. Flora Growth expects this network
to grow to over 1,200 distribution points in 2021, including one of
Colombia’s largest coffee chains, Tostao Café & Pan.
Hemp Textiles & Co.
Through its Hemp Textiles division, Flora Growth intends to utilize
its large land package and cultivation infrastructure to capture market
share in the rapidly growing hemp industrials segment.
The company’s first brand through this division, Stardog Loungewear,
offers a line of comfortable loungewear made from natural, organic
materials. Stardog has been distributing globally through e-commerce and
brick and mortar channels in Bogota since fall 2020, and the company
intends to open U.S. brick and mortar locations in 2021.
Accretive M&A
Flora Growth is targeting transactions to complete the supply chain
via key infrastructure to enhance its global distribution with the aim
to compete on low-cost, high-quality inputs paired with premium brands
that create business lines with robust margins.
To date, Flora has announced two major transactions.
Koch & Gsell (Acquisition)
- Amplify CPG portfolio’s revenue growth through leading brand, Heimat, currently with TTM revenues of $7.6 million
- Leverage Koch &Gsell’s distribution network of 2,500+ stores to introduce Flora to the Swiss, European and Asian markets
- Bring patented hemp cigarette manufacturing technology into new markets utilizing Flora’s high-quality cannabis
Hoshi International (Investment)
- Equity Investment of €2 million into Hoshi to establish Flora as a preferred supplier to two EU processing facilities
- Opens gateway for Flora Growth’s cannabis through international distribution agreements in the EU and U.K.
- Hoshi’s experienced team and increased access to the EU cannabis market to serve as a catalyst for revenue growth
Cultivation
Key to Flora Growth’s expansion efforts is its cultivation strategy.
The company’s Cosechemos farm, located in Bucaramanga, Colombia, is
currently licensed to cultivate 247 acres of cannabis. Through three
successful pilot crop plantings, the location has demonstrated a
production cost of just $0.06/gram. For comparison, the average cost of
North American cannabis (based on 2019 figures from Aphria, Tilray,
Sundial, and Aurora) equates to roughly $1.89/gram. Flora Growth is
uniquely positioned to capitalize on Colombia’s favorable growing
conditions, low-cost infrastructure, and affordable local workforce as
it looks to ramp up its cultivation efforts moving forward.
Leadership Team
Bernard Wilson is the Chairman of Flora Growth. A senior financial
professional, Dr. Wilson is the former Vice-Chairman of
PricewaterhouseCoopers LLP and is the Chairman of the Founders Board of
the Institute of Corporate Directors. He has also served as Chairman of
the Canadian Chamber of Commerce; Chairman of the International Chamber
of Commerce – Canada; and Member of the Canada/U.S. Trade Committee. Dr.
Wilson draws on this experience to ensure Flora Growth adheres to
effective corporate governance practices.
Luis Merchan is the company’s President and CEO. He is a proven
executive with over a decade of experience in enterprise sales
management, corporate strategy, merchandising and expense management,
and customer experience. Mr. Merchan previously served as Macy’s Inc.’s
Vice President of Workforce Strategy and Operations, where he managed
the enterprise’s multi-billion-dollar P&L expense line for the
entire 540 store portfolio. Throughout his tenure at Macy’s, he led
various sales and marketing initiatives, including the B2B corporate
sales team that was responsible for $160 million in annual revenue. Mr.
Merchan obtained his Bachelor of Industrial Engineering from Pontifical
Xaverian University in Bogota, Colombia, and his MBA from McNeese State
University. He also holds a Graduate Certificate in Marketing Management
from Harvard.
Juan Manuel Galan is a Strategic Advisor to the Flora Growth
management team. Mr. Galan currently serves as a senior consultant to
The World Bank. He is a politician and former senator of Colombia,
serving three terms from 2006 to 2018 as a member of the Colombian
Liberal Party. He is also a former professor at the University of
Rosario and holds more than 20 years of journalistic, academic,
governmental and parliamentary experience. During his time as a senator,
Mr. Galan was a key leader, with 29 bills and 27 debates on political
control, and 17 laws to his name. The most relevant of those laws was
authoring the medical cannabis law that resulted in the legalization of
medical cannabis in Colombia.
Stan Bharti is a Director of Flora Growth. Mr. Bharti currently
serves as Executive Chairman of Forbes & Manhattan. He has more than
30 years of professional experience in business, finance, markets,
operations and more, with a focus on the resource and technology
sectors. To date, Mr. Bharti has amassed over $3 billion worth of
investment capital for the companies with which he has worked and their
shareholders. He is a Professional Mining Engineer and holds a master’s
degree in engineering from Moscow, Russia, and University of London,
England.
Javier Franco is the company’s VP of Agriculture. Mr. Franco is a
master horticulturist with more than 25 years of experience in the
design, implementation, and management of cultivation and propagation
facilities of more than 30 species of cut flowers in Latin America. He
completed his agricultural studies at Zamorano University in Honduras
and later at an International Exchange Program at Ohio State University.
Mr. Franco has directed technical, commercial, and research groups in
the cut flower, fruit and vegetable markets in Latin America and has
participated in the commercial development of new technologies applied
in agribusiness. He has also led the agri-management of organic crops
and certifications of Good Agricultural Practices.
For more information, visit the company’s website at www.FloraGrowth.ca.
NOTE TO INVESTORS: The latest news and updates relating to FLGC are available in the company’s newsroom at https://nnw.fm/FLGC
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