The Flowr Corporation provide a business update and announces the departure of Director and Chief Executive Officer Darryl Brooker and appointment of Tom Flow as Interim CEO.
Business Update
In the last six months, Flowr has increased its product offerings significantly with the launch and success of Strawnana, Sour Sis, BC Dog Walkers, and the recently introduced strains of BC Clementine Crush, BC Lemon Ice, BC Spiced Grape and BC Mango Melon OG. Q2 will see the introduction of seven new SKU’s across the provinces of Ontario, Quebec, British Columbia, Alberta and Saskatchewan. The genetic and innovation pipeline continues to expand and new product launches are planned for Q3 and Q4.
From January 2022 to February 2022, our BC Strawnana Dog Walkers (pre-rolls) represented a top 15 pre-roll SKU in Ontario (above $10/gram) and continues to show strong traction in the provinces of British Colombia and Alberta. We have also seen significant growth in retail penetration across our core markets. In Ontario, over 65% of stores currently carry at least one Flowr product, representing significant growth from under 50% in August 2021. We’ve seen a similar story across our other major markets, where our store distribution has grown from ~30% to over ~60% and ~27% to over 55% in British Colombia and Alberta, respectfully.
Over the past year, the Company has significantly reduced its overhead costs and paid down much of its senior indebtedness. Since January 1, 2021, the Company has reduced the amount of principal indebtedness under its overall debt from $43.5 million to $27.9 million and has repaid its senior secured indebtedness from $18.5 million to $5.7 million to date. The sale of the KRS R&D facility as previously announced will further reduce the Company’s indebtedness by $12 million. The Company has also reduced SG&A expenses each quarter since the end of 2020 and is on track to achieve annualized SG&A savings of $3.3 million as previously announced. Our revenue continues to show quarter-on-quarter growth and will achieve record annual revenue for 2021 and further growth into 2022. We expect to release our Q4 and full year 2021 financial results prior to the end of April 2022.
The Company has freed up additional funds and streamlined its focus through the sale of non-core assets, including its Australian business, TCann Pty. Ltd. for $500,000, sale of the K2 lands for $6.3 million and the recently announced agreement to sell the KRS R&D facility for net proceeds of $4 million.
Leadership Transition
Mr. Brooker has resigned as Director and CEO effective immediately in order to pursue other opportunities. The Company would like to thank Darryl for his efforts over the past year and wish him success in his future endeavours.
“Leaving Flowr was a very tough and personal decision for me as I pursue other opportunities. I could not be more impressed with the performance of the management team over the last 10 months in terms of productivity, innovation, new strains and a laser focus on driving the business to profitability in 2022. This strong management team remains in place and I am confident that Flowr will continue to improve its share and leadership in the premium Canadian cannabis dried flower market”.
In the short-term, Tom Flow has been appointed Interim CEO to help support the leadership transition of the Company. As the founder and former CEO of the Company, Tom has an intimate knowledge of the business and is well-positioned to help guide Flowr through its leadership transition.
The Board of Directors will be providing additional support to management during the leadership transition to ensure effective leadership and decision-making as the Company continues its focus on streamlining the business and works towards its goal of becoming cash-flow positive during 2022.
About The Flowr Corporation
The Flowr Corporation is a Canadian cannabis company with operations in Canada and the European Union. Its Canadian operating campus, located in Kelowna, BC, includes a purpose-built, GMP-designed indoor cultivation facility; an outdoor and greenhouse cultivation site; and a state-of-the-art R&D facility. From this campus, Flowr produces recreational and medicinal products. Internationally, Flowr services the global medical cannabis market through its subsidiary, Holigen Holdings Limited, which has a license for cannabis cultivation in Portugal and operates a GMP licensed facility in Portugal. For more information, please visit flowrcorp.com or follow Flowr on Twitter: @FlowrCanada and LinkedIn: The Flowr Corporation.
