The Flowr Corporation
The Toronto-based premium cannabis producer initially purchased a 19.8% share in Holigen in December 2018 for $6 million. Holigen started out in Australia and it is now building one of the world’s largest cannabis cultivation facilities in the Alentejo region of Portugal.
Yesterday Flowr announced an agreement to snap up the remaining 80.2% of Holigen by way of a share purchase. It has now launched an underwritten public offering of common shares for $125 million in an effort to fund the deal, ramp up production at Holigen’s facilities, and inject capital into Flowr’s other operations.
Australians Peter Comerford and Pauric Duffy founded Holigen, which has an EU GMP-certified production plant near Sydney. The former looks after operations in Australia, while the latter went to Portugal to head up the project there.
Duffy estimates that the site in Aljustrel will yield 500,000 kg of cannabis per year, which would make it the largest in the world. Total Portuguese operations are expected to reach 635,000 kg. Since December, the Flowr team has been working with Holigen’s management, which includes several Portuguese executives, to develop its assets and now it is taking full control.
It represents a major departure from Flowr’s original strategy. Former MedReleaf co-founder set the company up to focus on ultra-premium cannabis sales to the Canadian market. He noticed a gap for a high-end offering, and its marketing is all around the marvellous growing conditions at its site in Kelowna Valley, British Columbia, and the expertise and craftsmanship of its team.
Now it is also going for high-volume sales to the European market, which adds another intriguing string to its bow. “The combination of Flowr’s leading cultivation know-how and facility design with Holigen’s global footprint, expertise in GMP, and deep pharmaceutical experience is an excellent fit,” said Flowr chief executive Vinay Tolia.
He added that the opportunities in the European, Australian, and Asian medical cannabis markets are “enormous” and declared that Flowr is now perfectly poised to serve them.
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.