- Flora Growth signed a definitive agreement with FGH to acquire 100% of all issued and outstanding shares by way of a statutory plan of agreement
- The deal is expected to close in December following the presentation of the agreement to shareholders; the acquisition will open Flora to the German and EU medical markets, increasing the company’s international revenue and providing essential distribution to German pharmacies and a growing wholesale market
- FGH’s acquisition adds to Flora’s expanding list of subsidiaries which currently comprise Vessel Brand Inc. and JustCBD, among others, and it is expected to deliver at least $3 million in annualized cost synergies within the first year
- Luis Merchan, Flora’s Chairman and CEO, has noted that he believes the company has a path to profitability that few global cannabis companies can achieve, and the acquisition shows Flora’s commitment to achieving this profitability
- The acquisition also highlights the company’s understanding of the global cannabis space, the opportunities therein, and what it would take for it to become the undisputed market leader
Flora Growth (NASDAQ: FLGC), an internationally focused cannabis builder that leverages natural, cost-effective cultivation practices to supply cannabis derivatives, is looking to grow its product portfolio and expand its market reach with the proposed acquisition of Franchise Global Health Inc. (“FGH”), a multi-national operator in the medical cannabis and pharmaceutical industry (https://cnw.fm/oVQPK).
With principal operations in Germany, FGH’s acquisition will open Flora up to the German and European Union (“EU”) medical markets, which its management notes will significantly increase the company’s commercial international revenue.
Flora signed a definitive agreement with FGH to acquire 100% of all issued and outstanding shares by way of a statutory plan of arrangement. The company expects to close the deal in December following the presentation of the agreement to shareholders. Completion of the agreement will be subject to certain closing conditions customary for transactions of this nature, including, but not limited to, approval by the Supreme Court of British Columbia.
FGH will add to Flora’s expanding list of subsidiaries comprising Vessel Brand Inc. and JustCBD, among others. It is also expected to deliver at least $3 million in annualized cost synergies within the first year, mainly in reduced corporate administrative expenses.
“Through this proposed acquisition, we are connecting our commercial infrastructure and medical cannabis product portfolio to the German and EU medical markets while gaining direct access to European pharmaceutical distributions,” noted Luis Merchan, Flora’s Growth’s Chairman and CEO.
“We believe Franchise will significantly increase our commercial international revenue and provide essential distribution to German pharmacies and a growing wholesale market,” he added.
In August, Flora released its financial results for the first half of the 2022 financial year (“H1 2022”). Most notably, the company delivered on its promise to double revenue compared to H2 2021, lauding the integration of both Vessel and JustCBD. In addition, the company’s management expressed its confidence in maintaining the current trajectory to deliver its full-year guidance due to continued growth in its House of Brands.
“We continue to prudently manage our overhead and working capital as we expect to improve profitability going forward,” noted Mr. Merchan.
“We believe we have a path to profitability that few global cannabis companies can achieve in this difficult moment. The execution of our key initiatives is a testament to our team’s ability to deliver on plan. We will continue to execute as we focus on profitability and long-term value creation,” he added (https://cnw.fm/jcgmb).
FGH’s acquisition is poised to bolster Flora’s profitability while strengthening its market presence. The move is also a testament to the company’s commitment to its vision of global market dominance. In addition, it reflects its management’s competence and understanding of what is required for the company to grow and achieve its short-term and long-term goals. Still, most importantly, it shows Fora’s understanding of the global cannabis space, the opportunities therein, and what it would take to become the undisputed market leader.
For more information, visit the company’s website at www.FloraGrowth.com.
NOTE TO INVESTORS: The latest news and updates relating to FLGC are available in the company’s newsroom at https://cnw.fm/FLGC
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