The Flowr Corporation provided an operational update on its Canadian operations and the progress in maintaining its status as a premium cannabis producer and making the requisite changes to its operations in order to reach profitability.
Sale of Non-Revenue Generating Asset
The Company has entered into an agreement to sell its interest in the Kelowna Research Station R&D facility (the “KRS Facility”) to Hawthorne Canada Limited (“Hawthorne”) for an aggregate purchase price of $16 million (the “KRS Sale”), to be paid as follows: 1) an initial cash payment of $3.0 million; 2) full extinguishment of the principal amount outstanding under the existing loan agreement between Flowr and Hawthorne for the construction of the KRS Facility on closing, currently at approximately $12 million; and 3) the balance of the purchase price paid in cash upon closing. The KRS Sale is expected to close in Q2 2022 and is subject to certain closing conditions, including receipt of all necessary regulatory and third-party approvals.
“The KRS building and Hawthorne partnership has given us the ability to trial and commercialize exotic and unique cannabis strains, giving us a competitive advantage in the Canadian market,” commented Darryl Brooker, Chief Executive Officer. “Moving forward we will maintain a very close relationship with Hawthorne and will continue to benefit from shared Research and Development and the partnership will continue through a service agreement. In addition, this transaction further improves Flowr’s balance sheet with the cash proceeds of approximately $4 million and the elimination of $12 million of long-term debt outstanding.”
New Product Launches
Flowr is pleased to announce that four new genetics, BC Clementine Crush, BC Lemon Ice, BC Spiced Grape and BC Mango Melon OG, have been approved for listing across multiple provinces, including Quebec, Ontario, Alberta and British Columbia, launching in the months of March, April and May 2022. These additional listings will continue Flowr’s push to offer consumers differentiated exotic genetics, with high THC, high terpene contents, strong sensory profiles and premium quality buds.
Genetics Portfolio
Flowr has successfully completed trialing 44 new genetics and will shortly begin commercial growing of up to 10 new and exotic genetics selected for their unique terpene, morphological and THC profile. This new genetic pipeline is expected to launch in the second half of 2022 and the first half of 2023.
Canadian Retail Sales
Flowr continues to grow its Canadian retail sales in all provinces with products available in over 1,500 retail outlets across the country. This includes the listing of 11 SKU’s in Ontario with more to launch in the coming months. The Company is pleased to announce the continued success of BC Dog Walkers, currently selling in Ontario and British Columbia and launching in Alberta in March 2022. BC Dog Walkers provide consumers with Flowr’s flagship strains, BC Pink Kush, BC Black Cherry and BC Strawnana, in a 0.35 gram pre-roll format that prioritizes convenience and accessibility. The pre-roll market in Canada has seen a significant increase since October 2018 and Flowr believes that providing its flagship strains in this format will further enhance its position as a premium cannabis producer.
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. In 2020, Flowr’s BC Pink Kush was recognized as the top indica strain in Canada by KIND magazine.
