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The Flowr Corporation is tapping into a global cannabis market with a unique strategy

Snapshot

Armed with a new partnership with Canada's largest pharmacy and an international cultivator, Flowr is aiming to provide medicinal and recreational consumers around the world with premium, high-quality cannabis

cannabis leaves globe

Quick facts: The Flowr Corporation

Price: 1.84 CAD

TSX-V:FLWR
Market: TSX-V
Market Cap: $196.84 m
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  • Partnership with Shoppers Drug Mart, Canada’s largest pharmacy
  • World-class cultivation assets with Kelowna facility expected to produce over 50,000 kilograms of flower annually
  • Strategic acquisition of Holigen provides ability to dramatically increase global scale

What The Flowr Corporation does:

The Flowr Corporation (CVE:FLWR) (OTCMKTS:FLWPF) is at its core, a cannabis cultivator.

The Toronto-based company builds and operates large-scale, GMP-designed facilities that utilize proprietary growing methods to produce high-quality bud for recreational and medicinal usage.

Its flagship Kelowna production facility, currently under development, is expected to produce over 20,000 kilograms of premium flower annually once fully operational.

With CEO Vinay Tolia at the helm, the team has unique experience growing premium product at scale and expertise in facility design and cultivation. The Flowr team designed and built 17 facilities under previous programs and are directly responsible for three producer licenses.

The Kelowna facility is more than just an indoor cultivation centre. Its current operation stands at 32,000 square feet with a 17,000 square foot canopy. When fully operational, the anticipated 85,000 square feet facility is expected to produce around 10,200 kilograms of bud.

The facility also houses North America’s first research and development facility dedicated to advancing cannabis cultivation techniques. The 50,000 square foot lab, grow space and training area is a partnership with Hawthorne Canada Limited, a subsidiary of The Scotts Miracle-Gro Company (NYSE:SMG).

Flowr’s distribution strategy is buoyed by two significant partnerships that help the cannabis company to deliver its product to Canadian and international consumers.

How is it doing:

In 2019 Flowr announced an agreement to supply medical cannabis to Canada’s largest pharmacy chain, Shoppers Drug Mart, in a three-year deal with a two-year renewal term.

Shoppers’ new ecommerce platform will be the exclusive direct-to-patient online provider of FlowRx products. The products initially will be sold online only as Canadian regulations currently restrict the sale of medical cannabis in retail pharmacies.

The Shoppers deal comes on the heels of another major partnership announced in December 2018 with Holigen Limited, a global cannabis company focused on developing GMP-compliant production facilities in Portugal and Australia.

Its Aljustrel facility has the capacity to produce 500,000 kilograms of dried flower at its peak and has been deemed a project of national interest by the Portuguese government.

Flowr acquired 100% interest in Holigen in an exclusive termed IP licensing agreement, with Holigen gaining access to Flowr’s cultivation, facility design and construction intellectual property.

The cultivator recently closed a C$25 million credit facility from a syndicate of lenders led by ATB Financial, including Farm Credit Canada. 

Inflection points:

  • Phased expansion at Kelowna facility:
    • 140,000 square foot canopy with an annual capacity of 42,000 square kilograms.
    • 40-acre site focused on outdoor and greenhouse plants for extraction.
  • Sales of cannabis cultivars in both clone and seed form
  • First cannabis harvest from Portugal operations

What the boss says:

"Our strategy is driven by a focus on building the right facilities, meaning no large-scale greenhouses, and growing quality product consumers want, instead of targeting scale before proving out our business. In Canada, we are on pace to end the year with our most significant capital expenditures complete and, for the first time, we will be operating without the additional burden of cultivating while simultaneously completing construction on our flagship indoor facility," Vinay Tolia, Flowr’s CEO, told investors in November.

"Based on demand for EU-GMP compliant product in Germany, Australia, and other countries, we believe we are well-positioned to distribute products into these underserviced markets," he added.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

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Watch

The Flowr Corporation talks planned scale up of cannabis cultivation...

The Flowr Corporation (CVE:FLWR) (OTCMKTS:FLWPF) Head of Capital Markets Thierry Elmaleh sat down with Proactive at the Cannabis Europa: Transatlantic Forum in Toronto.  Elmaleh talked about how Flow plans to scale up its subsidiary Holigen, which has a license for cannabis cultivation...

on 6/11/19

3 min read