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The Flowr Corporation

Flowr is cultivating the future of cannabis

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 bud on tray

Quick facts: The Flowr Corporation

Price: $3.43

Market: TSX-V
Market Cap: $353.73 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

  • Premium product with a goal to have no irradiation under two brands through multiple distribution partners

  • Strategic investment in Holigen provides ability to dramatically increase global scale


Who is The Flowr Corporation?

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 50,000-square kilograms of premium flower annually once fully operational.

With co-CEOs Tom Flow and 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.

Co-CEO Flow co-founded MedReleaf, which was sold to Aurora Cannabis for C$3.2 billion.

Tolia, meanwhile, expressed his confidence that he and Flow have assembled a team that will lead not only Flowr into the future, but the marijuana sector as well.

“Weed is not a commodity,” he told Proactive. “There is going to be a premium segment of the market and you need technical sophistication to pull it off.”

Kelowna: Cultivation and R&D come together

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 next phase of the expansion will be an additional 140,000 square foot canopy with an annual capacity of 42,000 square kilograms.

In the third phase, Flowr plans to add an additional 40-acre site focused on outdoor and greenhouse plants for extraction.

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 expects to develop and test Hawthorne cultivation systems such as lights and fertilization systems and conduct research into genetics and cultivation data analytic systems.

Blue-chip partnerships secured

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

In January 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.

Shoppers Drug Mart’s entrance into the medicinal cannabis market is a “sea change” for the industry, according to Flowr’s co-CEO Vinay Tolia.

“It will treat cannabis as a pharmaceutical product, which it never has been,” he said in an interview with Proactive.

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.

Flowr acquired nearly 20% interest in Holigen in an exclusive termed IP licensing agreement, with Holigen gaining access to Flowr’s cultivation, facility design and construction intellectual property.

For Flowr, the agreement brings transformational scale and access to global medical marijuana markets, which is estimated to reach nearly C$90 billion by 2028 in the European Union and Australia cumulatively.

By the numbers

The company is aiming to have all 20 grow rooms at its Kelowna facility fully constructed in the third quarter of 2019.

Flowr is expected to begin selling a wide selection of cannabis cultivars in both clone and seed form in 2Q 2019. The company expects that its cultivation process will produce more than 3 million high quality clones annually once the initial facility is completed.

On the financing front, the company is looking for additional financing for the Kelowna 2 expansion, which is expected to be four times the size of Kelowna 1 and have 80 grow rooms.

The company recently reported net revenues of around C$3 million for the three months ended December 31, 2018 on sales of nearly 406 kilograms of cannabis.

It has also applied to list on the NASDAQ stock exchange.

According to Co-CEO Tolia, Flowr is one of the few licensed producers in Canada that can compete with the black market on quality.

“People have realized that the plant is hard to grow and meet Health Canada standards,” he said. “Our core competency is the ability to grow high-quality plants at scale.”

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