Flora Growth has been actively acquiring companies over the past few years in hopes of expanding its business both in the U.S. and globally.
READ ON TO DISCOVER WHY ROTH MKM HAS ISSUED A “BUY” RATING ON FLGC WITH A $6.00 PRICE TARGET!
Former President Donald Trump has won a second term in office, defeating Vice President Kamala Harris in the race for the White House on a platform that included support for state-level marijuana legalization and limited federal cannabis reforms.
One of the Trump administration’s most significant cannabis developments to occur during his first term was signing the 2018 Farm Bill. This move legalized hemp creating a massive market for a crop that had been prohibited for more than 80 years as a federally controlled substance.
FLGC commends the President-Elect for his statements in support of cannabis reform and urges his administration to prioritize these critical reforms around rescheduling and SAFE banking that will create economic growth, address inequities, and open pathways for significant advancements in the space.
As of September 2024, cannabis is now legal in 38 U.S. states for medical use and fully legal in 24 U.S. states. As more U.S. states and countries legalize the plant for both recreational and medicinal uses, investors are taking greater interest in adding companies in the growing space to their portfolios.
Federal prohibition has been a thorn in the side of cannabis companies, as federal law makes it significantly more expensive to run these businesses and forces the companies to pay incredibly high tax rates. There's also the reality that many businesses fail five years after they are founded.
Despite this, cannabis products are becoming more widely available, and interest and awareness are growing. Many people hope these products can help them reduce stress, improve sleep, or manage pain.
Around nine-in-ten Americans say marijuana should be legal for medical or recreational use, according to a January 2024 Pew Research Center survey.
Support for marijuana legalization has increased dramatically over the last two decades. In addition to asking specifically about medical and recreational use of the drug, both the Center and Gallup have asked Americans about legalizing marijuana use in a general way. Gallup asked this question most recently, in 2023. That year, 70% of adults expressed support for legalization, more than double the share who said they favored it in 2000.
The Justice Department is also expected to post its proposed rule to reclassify cannabis from Schedule I to Schedule III under the Controlled Substances Act in the Federal Register.
Florida-based Flora Growth Corp. (NASDAQ: FLGC) is a consumer-packaged goods leader and pharmaceutical distributor serving all 50 states and 28 countries with 20,000+ points of distribution around the world.
The company believes the future of the cannabis industry lies in the ability to bring products and medications to communities around the globe.
As an international cannabis company, FLGC is dedicated to building premium brands that enhance well-being and promote a healthier lifestyle. Through the company’s cultivation expertise and innovative solutions, it delivers diverse, high-quality cannabis products to meet the evolving needs of a global market.
With a robust international presence, the company ensures the seamless delivery of quality and innovation to every market it serves.
Built on the foundation of delivering the ultimate experience at every touch point, FLGC’s House of Brands demonstrates a thoughtfulness and executional excellence unparalleled in the industry.
With tremendous revenue growth, the company is building an ecosystem that will support market-leading innovation within categories that matter most to consumers who are exploring plant-based consumer goods.
The Company stands at the forefront of the tremendous U.S market, leveraging the distribution and marketing experience of its leading consumer products brand – JustCBD.
JustCBD is one of the TOP gummy companies in the world!
JustCBD is an established CPG wellness brand with over 300 products and a seamless omni-channel approach that includes a direct-to-consumer business with over 300,000 customers and a network of over 14,000 distribution points across the United States and internationally. Flora acquired the brand in February of 2022.
JustCBD high quality CBD products are made from organically sourced USA-grown hemp. JustCBD carries a wide range of CBD items for sale, including everything from Gummies and oil to soothing creams and pet treats. It has more than 22,000 5-star reviews. Every CBD product is GMP certified, as well as third party laboratory tested to confirm buyers' safety. For more information, visit www.justcbdstore.com.
This NASDAQ-traded small cap firm also has an established pipeline into the massive German market!
In fact, FLGC’s wholly owned subsidiaries have been active in Germany since 2017, obtained the FIRST medical cannabis license in the country and are also responsible for selling the first gram of medical cannabis in Germany.
With the largest population and the greatest purchasing power in Europe, Germany boasts Europe’s fastest growing cannabis market. With the following 2 phases of German legalization expected in the coming 12-18 months, Germany is expected to become the largest federally legal adult use cannabis country!!
This bodes well for Flora Growth Corp. (NASDAQ: FLGC) who has acquired TruHC in an all-share deal valued at $6.4M. Majority control of TruHC was acquired in April of 2024.
Because there is a limited number of entities that can bring flower globally to supply the burgeoning German market.
“The acquisition of TruHC is expected to provide Flora with the runway it needs to maximize the benefits of Germany’s cannabis legislation. We intend to touch on many verticals in the medical and recreational cannabis realms in Germany. We anticipate becoming a leader and at the forefront of the industry, which has the potential to spread to the rest of Europe. Together, we are excited to assume pack leadership in a sector poised for explosive growth.”
Clifford Starke, Chief Executive Officer
TruHC Pharma GmbH is a medical cannabis expert based in Hamburg, Germany that holds an EU-GDP certification as an importer, distributor and manufacturer of medical cannabis, and operates a production facility with a cutting-edge cannabis laboratory. The company also holds an EU-GMP license.
Mr. Hendrik Knopp, a respected lawyer and accomplished entrepreneur, along with the TruHC team, joins the FLGC. family. Mr. Knopp's leadership has been pivotal in establishing Germany's medical cannabis landscape, including securing one of the first cultivation licenses in the country!
Germany made history this year by becoming the largest country in the EU to legalize recreational cannabis! Regulatory Developments in Germany
It was in April 2024 that Germany embarked on a historic cannabis legalization.
Cannabis in Germany has been legal for recreational usage by adults (aged 18 and over) in a limited capacity since April 1st 2024, making it the ninth country in the world to legalize the drug. As of February 2024, it has been assessed that 4.5 million Germans use cannabis. SOURCE
FLGC commends Germany’s upper house lawmakers for passing the recreational cannabis legalization bill, after it was approved by the lower house in March of 2024. The law went into effect on April 1, 2024.
The law cleared its final hurdle, making German laws on cannabis use among the most progressive in the world!
“We welcome Germany’s definitive legalization of recreational cannabis. Our German business represents a significant component of Flora’s global operations and a strategic growth market for the Company. We are excited about the potential of the new legislation on our company.”
Clifford Starke, Chief Executive Officer.
Germany’s quasi-legalization move sets the stage for other European countries to follow suit, with the Netherlands, Switzerland, and the Czech Republic already announcing various forms of adult-use legalization.
Countries such as Germany have taken huge steps in allowing cannabis use owing to its therapeutic benefits. The ongoing research and clinical trials for several marijuana-based medications are expected to fuel the market growth over the forthcoming years.
As the EU’s market for cannabis products continues to grow, Flora Growth Corp. (NASDAQ: FLGC) aims to further capitalize with Phatebo GmbH!
“An early focus on Germany, highlighted by 2017 medical sales and a late 2022 acquisition of FGH, has positioned Flora to capitalize on legislative changes (home cultivation began April 1). Flora intends to leverage Phatebo relationships (part of FGH) to move medical cannabis from third parties into Germany.” - ROTH MKM
Phatebo GmbH is a leading distributor of export pharmaceuticals and medical cannabis products to the burgeoning European Union. Phatebo GmbH accelerates Flora’s expansion in Europe’s largest medical cannabis market.
Phatebo GmbH is a reliable partner in the healthcare industry. This dynamically developing pharmaceutical company is based in Hilzingen Germany, on the western shore of Lake Constance. Through its widespread and qualified supplier network, the company can offer its customers a wide range of branded Rx and OTC medicines, as well as medical devices, at attractive prices.
A recent Frankfurt Stock Exchange listing is anticipated to increase FLGC’s trading liquidity and facilitate investment in Flora by European investors through the Frankfurt listing as major financial hubs like Switzerland, Luxembourg, Lichtenstein, Monaco and others are reached easily.
With a vision to become a market leader in the European pharmaceutical and medical cannabis market, FLGC has recently launched its parallel import business ("PI Business") in Germany and the European Union ("EU"). According to the European Affordable Medicines, the size of Germany's parallel import business, including exports, is close to $4 billion with 47% of exports to EU countries coming from Germany.
This strategic expansion underscores Flora's broadening footprint in key international markets.
The PI Business will enable Flora to provide European consumers with a diverse range of pharmaceuticals at competitive prices while ensuring compliance with the stringent regulations governing the EU market. Flora is a prominent distributor of pharmaceutical products in the European Union and a holder of a medical cannabis licence in Germany.
"Our vision is to become a market leader in the European pharmaceutical and medical cannabis market. Our current access to an extensive distribution network of German pharmaceuticals represents the perfect platform to launch the PI Business. Our goal is to deliver accessible pharmaceuticals to European patients." said Clifford Starke, Chief Executive Officer.
In the second quarter of 2024, Vessel maintained a gross profit margin of 53% on sales of $1.4 million and over 60 new wholesale customers were added to the Vessel network in the quarter, including several Multi-State Operators.
Vessel’s mission is to be the world’s leading producer of consumer technology and accessories. The company’s products are built better, designed smarter and inspire optimism and happiness.
The company’s promise is to make every experience more expressive and personal, and to deliver the best performance in our line. The collection is an honest display of Vessel’s attention to detail and craftsmanship that’s second to none.
Today, cannabis vaping is one of the most preferred methods of cannabis consumption, courtesy largely because of its convenience and effectiveness.
The global e-cigarette and vape market size was valued at USD 28.17 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 30.6% from 2023 to 2030. The public's growing understanding of e-cigarettes being safer than traditional cigarettes, particularly among younger people, is forecasted to fuel market expansion due to numerous studies conducted by medical institutions and associations.
Vessel is consistently rolling out innovative products and is quickly growing into a leading vaping company. It stands among well-known vaporizer companies like Puffco and Pax!
Flora Growth Corp. (NASDAQ: FLGC) has recently closed on its acquisition of Australian Vaporizers. This is a milestone in the company’s efforts to buy e-commerce engines and to use them to sell Vessel!
In August of 2024, FLGC closed on its acquisition of Australian Vaporizers. The acquisition has the potential to drive synergies with Flora’s existing portfolio of brands, including selling Vessel Brand products in Australia, which is Flora’s fastest growing segment.
Australian Vaporizers was founded in 2010 and has become one of the largest online retailers of vaporizers, hardware, and accessories in Australia. It is an online expert for aromatherapy products, specializing in dry herb vaporizers. It has been providing vapes, accessories and knowledge to enthusiasts and newcomers alike. Its website www.australianvaporizers.com.au is a popular designation in the country with a large database of satisfied customers. Australian Vaporizers sold over 92,000 units to over 30,000 active customers through business to business and direct to consumer channels.
One of the biggest disruptors to hit the beverage industry is THC-infused beverages and Flora Growth Corp. (NASDAQ: FLGC) is aiming to be at the forefront of this niche category!
Flora Growth Corp. (NASDAQ: FLGC) Has Formed a 50/50 Joint Venture to Establish Peak USA JV LLC. (“Peak USA”).
This Marks FLGC’s Strategic Entrance into the Growing Cannabis-infused Beverage Market!
The goal is to produce the next generation of beverages for the U.S. market.
According to Headset Data, the beverage market segment currently represents only 1% to 3% of the U.S. cannabis market. First-time daily cannabis use overtook alcohol, with roughly 17.7 million users compared to 14.7 million for alcohol.
The partnership is strategically positioned to establish cannabis beverages distribution in the U.S. by adeptly handling regulations and facilitating market access via CPG channels like wine and liquor stores.
The joint venture will leverage the strengths and resources of both Peak and Flora to capitalize on current commercial opportunities in the beverage market in the U.S., driving mutual growth and success. Peak contributes production know-how, while Flora brings a wealth of brand launching, sales and marketing expertise within the dynamic landscape of lifestyle brands in the U.S.
Several major drink makers including Pabst Blue Ribbon and Constellation are already pushing into the market and are betting people will want cannabis drinks as the market for legal marijuana expands.
In late November of 2023, Total Wine and More, the largest independent alcoholic beverage retailer in the country, became the first major liquor store in the US to sell drinks containing THC.
This proves further that THC-infused beverages are going mainstream!
The drinks are being marketed as an alternative to alcohol which explains why alcohol giants are climbing on board.
The global cannabis beverages market size was USD 2.04 billion in 2023 and is projected to grow from USD 3.09 billion in 2024 to USD 117.05 billion by 2032, at a CAGR of 57.50% during 2024-2032. North America dominated the cannabis beverages market with a market share of 21.14% in 2023.
Why are major players moving towards the hemp beverage space? Because it’s legal in 50 states and these players see the opportunity to create real brands!
Flora Growth Corp. sees the tremendous potential that the THC-infused beverage space encompasses and has additionally joined the U.S. Hemp Beverage Alliance!
Flora Growth Corp. Completes Build-Out of Specialized Beverage Facility, Marking Entry into the $220 Million Beverage Market!
FLGC has recently completed its specialized beverage facility and receipt of requisite permitting, on time and on budget! This milestone facilitates Flora's entry into the burgeoning beverage market where it will use proven technology for Peak USA (whom it has a joint venture with) to gain a competitive edge in the THC-infused beverage space.
According to Headset Data, beverages still represent only about 1% to 3% of the U.S. cannabis market with plenty of room for further growth.
FLGC’s goal is to replicate the success of Peak's Canadian business in the United States. Peak estimates that it produces close to 40% of all cannabis beverages available in Canada!
FLGC has launched its first THC-infused beverage, Melo. This marks Flora's highly anticipated debut into the rapidly growing beverage market, an industry experiencing significant momentum in the Unites States.
Melo, a premium THC-infused beverage, is the result of a strategic joint venture between Flora Growth Corp. and Peak, a renowned provider of advanced cannabis-based products. The collaboration combines Flora's extensive marketing and distribution network with Peak's world-class emulsion technology, which ensures the seamless integration of hemp-derived ingredients into beverage formulations. Melo comes in four flavors - grapefruit, half & half lemonade iced tea, strawberry mango, and wild berries.
Flora's Beverage Approach…
"Melo represents a forward-thinking approach to how we see the future of beverages. It's not just about entering a new market; it's about redefining what consumers expect from their drinks. We are combining the best of what nature offers with cutting-edge science to deliver a product that enhances everyday life, whether it's for relaxation after a long day or simply enjoying a moment of calm," noted Clifford Starke, Chief Executive Officer.
He added, "The beverage industry is ripe for disruption, and hemp offers a unique opportunity to innovate in ways that traditional beverages cannot. We see Melo as a catalyst for change. We believe this product will pave the way for a new category of beverages that resonate with consumers looking for more than just a drink - they're looking for an experience."
Flora Growth Corp. (NASDAQ: FLGC) is a small cap NASDAQ firm WITH CASH ON HAND, that is building a next generation cannabis company. The company is firing on all cylinders across the world to build its name.
“In the second quarter of 2024, we at Flora, demonstrated an aptitude to make accretive acquisitions and form strategic partnerships to capitalize on the most robust market trends. In Germany, we acquired TruHC Pharma GmbH in response to the de-scheduling of cannabis, the reforms surrounding cultivation for personal use, the establishment of cannabis social clubs, and the removal of cannabis from the list of prohibited substances in the Narcotics Act. In the United States, we entered a joint venture with Althea Group Holdings to capitalize on the rapid growth in the beverages market. In Australia, we acquired Australian Vaporizers to expand our e-commerce foothold and Vessel’s reach.” - Clifford Starke, Chief Executive Officer
An industry that was once a shady corner of commerce has turned into a full-fledged industry that is continuing to grow like a weed. And reclassification would send a signal that the industry is gaining legitimacy.
The last presidential election year, 2020, was a great one for many cannabis stocks. In 2020, shares of Trulieve Cannabis soared 167%, and fellow multi-state operators Green Thumb Industries and Curaleaf Holdings saw their stocks rise by 151% and 90%, respectively.
The plant may come back into the spotlight as President Trump heads back to the White House and could be a catalyst to fuel a rally among companies publicly trading in the space!
Positive legislative developments are already happening in Europe and globally where FLGC is doing business and thriving!
With solid financial health as revealed in Q2 and a strategic growth plan, Flora Growth Corp. (NASDAQ: FLGC) is creating a tremendous footprint in one of the fastest growing sectors.
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