The Flowr Corporation (CVE:FLWR) (OTCMKTS:FLWPF) has provided a global operational update, which includes a headcount restructuring program to better align the company’s strategic objectives in light of the coronavirus (COVID-19) pandemic.
In a statement, the Toronto-based company said Tuesday that it has restructured around 25% of its workforce globally, which is expected to result in annual cost savings of around more than $6 million.
In an effort to becoming cash flow positive in the second half of 2020, the company said it will focus on the premium Canadian dried flower market, building on the positive sales momentum it has seen with its Flowr branded BC Pink Kush and other high THC strains expected to be launched in the market in 2020.
Flowr CEO Vinay Tolia said the changes were part of an ongoing comprehensive review of the company’s operations to “reduce costs, focus on the highest value priorities and accelerate cash flow generation,” in light of the anticipated macro-economic headwinds stemming from the coronavirus outbreak.
“This was an extremely difficult decision that we did not take lightly and would like to thank former and current employees for their tremendous contributions. The resulting company will be a leaner, more efficient organization,” said Tolia.
“Our fundamental thesis that consumers demand quality dried flower has been proven correct as evidenced by heavy demand for our flagship strain, BC Pink Kush. We also look forward to the release of our newest high THC strains BC Louis XIII and BC Tahoe OG in the coming months,” he added.
The Flowr boss also said that given that the company’s Kelowna 1 facility is now fully operational, the company expected to see a step function change in production and sales beginning in the second quarter.
Flowr said it has advanced its Kelowna Campus to a single hub for all aspects of cultivation, processing and packaging to service the Canadian cannabis market.
Kelowna 1 Indoor Facility
• On February 24, 2020, the company received approval from Health Canada to open an additional 10 grow rooms, bringing the total to 20 at the Facility. The ultimate production capacity is expected to be approximately 10,000 kg of premium cannabis when fully optimized
• The company has propagated 7 of the newly licensed grow rooms with the remaining 3 to be planted within the next 30 days
• The company has taken preventative measures to remain a reliable supply chain partner during the coronavirus pandemic
Outdoor and shade-house facility
• The company has decided to delay the launch of its live resin product until its Canadian dried flower operations are generating positive cash flow
• It has decided to selectively plant outdoors to enable optionality for a full outdoor grow to support its revised live resin launch plans
Flowr/Hawthorne R&D Facility
• Flowr and Hawthorne have entered a strategic R&D alliance to build a state of the art, 45,000 square foot R&D facility
• Construction of the R&D facility is substantially complete. The company submitted the evidence package to Health Canada to license the first floor on February 24 and expects to receive licensing approval in Q2 2020
• Once operational, the R&D facility will allow Flowr to stay on the leading edge of cultivation technology and maximize plant health and yields
Meanwhile, in Portugal the company is waiting on final GMP certification in Sintra, and an outdoor crop at Aljustrel is planned for harvest in the fourth quarter.
In Australia, GMP compliant packaging remains and the company recently released for sale its first shipment of dried flower from Canada.
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