- Vinay Tolia,
co-CEO of Flowr, sees the move as giving the company exposure to
European and Australian markets
- The
company believes that the combination of its cultivation expertise
with Holigen’s development of large-scale cannabis facilities
could result in one of the lowest-cost producers worldwide
- Clarus Securities
has initiated coverage on FLWR stock with a ‘speculative buy’ rating and a
one-year price target of $5; its research report projects adjusted EBITDA
of C$6.8 million in FY2019
The Flowr Corporation’s (TSX.V: FLWR) (OTC: FLWPF)
acquisition of 19.8 percent of Holigen Limited for a cash payment of
C$6 million and the signing of an intellectual property sharing agreement is
expected to have far-reaching benefits for the company. Flowr says that it will
result in an acceleration of Holigen’s projects, including an outdoor
cultivation license on a seven million square foot site in Portugal with the
potential to produce 500,000 kg of cannabis products annually (http://ibn.fm/hIlOQ).
Flowr, through its subsidiaries, is a vertically integrated
Canadian cannabis company and licensed producer that focuses on non-irradiated
premium flower production. Its headquarters are in Markham, Ontario; and its
production facilities are in Kelowna, British Columbia. Using its patented
growing systems, it conducts large-scale cultivation operations built to Good
Manufacturing Practice (GMP) standards. It is also well positioned to serve the
adult use market with a line of premium cannabis products.
Based in Portugal and Australia, Holigen is
forming partnerships with cannabis distributors in Germany, Poland, the United
Kingdom and Ireland. It also has strong ties to the largest medical cannabis
distributor in Australia. The company is in the final stages of obtaining a
license to export cannabis from Portugal, giving it potential direct marketing
access to the European Union and other global markets.
“We believe this is a transformative transaction that
establishes Flowr as a global player in the cannabis industry,” CEO
Vinay Tolia of Flowr stated in a news release. “We’re using our
financial strength and industry-leading cultivation expertise to gain exposure
to the rapidly expanding European and Australian markets through Holigen.”
FLWR is focused on high-yield production and believes
that Holigen’s outdoor production site in Portugal could offer one of
the lowest cost cannabis cultivation opportunities globally, given Portugal’s
ideal climate and relatively low land and labor expenses, as well
as Flowr’s cultivation expertise. Holigen is currently
developing four cultivation facilities in Portugal and Australia along with
production and research and development sites.
Holigen expects to complete licensing for its first
site in Portugal by the middle of 2019 and plans to be one of the few licensed
companies in Europe producing products in GMP-compliant facilities.
Flowr is receiving coverage
from Clarus Securities. In a research note to investors, Noel
Atkinson, analyst at Clarus, projects that Flowr will grow to
adjusted EBITDA of C$6.8 million in FY2019, as he stated in the Cantech
Letter (http://ibn.fm/4ZeJ7).
For more information, visit the company’s website at www.Flowr.ca
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