MIAMI, Fla.--(BUSINESS WIRE)--Flora Growth Corp. (NASDAQ: FLGC) (“Flora” or the “Company”), a leading all-outdoor cultivator and manufacturer of global cannabis products and brands, is pleased to announce that it has entered into a non-binding Letter of Intent (“LOI”) with Evergreen Pharmacare Pty Ltd. (“Evergreen”), a licensed Australian importer and distributor of medical cannabis products, to supply its premium dried flower and derivative products. The Company expects to ship its medical-grade cannabis products upon completion of its first commercial harvest and obtaining necessary export licenses.
Data firm, FreshLeaf Analytics, forecasts the Australian medical cannabis market to surpass AU$200 million in 2021 and notes strong patient growth metrics by a factor of 15x over the past two years. Furthermore, Prohibition Partners estimates that the Australian medical cannabis market could reach US$1.5 billion by 2025.
Evergreen works with patients and healthcare practitioners, primarily physicians and pharmacists, to provide medical cannabis products and to educate about the authorization and use of medical cannabis. Evergreen was born out of necessity for its patients to have quicker access to premium, affordable, AUGMP-certified medication via the Special Access Scheme (“SAS”) Category B application pathway.
“We are absolutely thrilled to enter into this agreement with Flora and to provide Australian cannabis patients with access to premium medical-grade cannabis products at a more affordable price point than ever before due to Flora’s strategic low-cost cultivation and processing operations, as well as their global logistics expertise,” said Tristan Hyodo, Chairman of Evergreen. “Additionally, we were very encouraged by the recent decision from the Therapeutic Goods Administration to provide a new product pathway for cannabidiol ("CBD") to be sold over-the-counter without a prescription. Pharmacy is a natural progression where you can have medical practitioner oversight for patients consuming it for health, while also addressing the accessibility issue seen in other global jurisdictions.”
FreshLeaf estimates the pharmacist-only CBD market in Australia will grow to AU$250 million in product sales at market maturity, capturing around 2 million consumers, and also expects that many existing medical cannabis patients will migrate to the pharmacy channel once low-dose CBD products become available over-the-counter. Currently, almost 1-in-4 medicinal cannabis patients take a CBD product at a daily dose below 150mg, spending an average of $8.02 per day, or based on the current medical patient metrics, ~AU$29 million annually.
“The agreement with Evergreen will allow us to establish a local partner in Australia while generating incremental revenue from our Colombian cannabis facility and as legislation evolves within Australia,” said Jason Warnock, Chief Revenue Officer of Flora Growth. “This agreement also provides significant potential upside by allowing us to work with Australian regulators directly and bring our premium brands and established product formulations to the over-the-counter CBD market. Down-scheduling CBD fits well with Flora's long term consumer product strategy of providing proven cannabinoid wellness and beauty products to consumers around the world and we are excited to work with our partners on this new opportunity.”
This LOI is the second that Flora has signed since the Colombian government revised its cannabis laws aimed at improving access to cannabis products for Colombians and positioning Colombian cultivators and processors as the leaders to supply the global cannabis market (see press release dated July 26, 2021, for full details on the impact of the legislative announcement to Flora Growth).
About Flora Growth Corp.
Flora is a cannabis company that leverages natural, cost-effective cultivation practices to supply cannabis derivatives to its diverse business divisions of cosmetics, hemp textiles, and food and beverage. As the operator of one of the largest outdoor cultivation facilities, Flora strives to market a higher-quality premium product at below market prices. By prioritizing natural ingredients and value-chain sustainability across its portfolio, Flora creates premium products that help consumers restore and thrive. Visit www.floragrowth.ca or follow @floragrowthcorp on social for more information.
Cautionary Statement Concerning Forward-Looking Statements
This document contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: the impact of legislative changes in Colombia both in Colombia and internationally; the size of markets for cannabis and cannabis products; the Australian market for cannabis products; our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, or the forward-looking events discussed in this document and other statements made from time to time by us or our representatives not occurring, except as may be required by applicable law.