MIAMI & TORONTO--(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 it has entered into a definitive agreement with Canada-based Avaria Health & Beauty Corp. (“Avaria”) to form FloVaria Corp. (“FloVaria”), a joint venture company equally owned by Flora and Avaria.
Through FloVaria, Flora will provide distribution, supply chain, and marketing support of KaLaya products in Colombia, Mexico, and other LATAM countries, while Avaria will initially supply the finished product to FloVaria. In the event that manufacturing costs from Canada become materially higher than the cost to produce in Colombia, FloVaria will explore moving its supply chain activities of Avaria products to Flora Lab. Any profits from the sale of KaLaya products via FloVaria will be divided equally between Flora and Avaria, increasing the value of Flora’s existing distribution channels.
Further, Flora Lab will work to produce FloVaria’s cannabinoid-infused products, with an emphasis on incorporating cannabidiol (“CBD”), using cannabis from Flora’s cultivation facility. These products are expected to be distributed across LATAM using Flora Lab’s established distribution channels, with the goal of exporting to the U.S. market, where Avaria recently launched its KaLaya brand and has seen encouraging sales metrics.
“Since our initial meeting with Avaria, we were impressed by their commitment to research, product development, and most importantly, providing customers with products that work,” said Luis Merchan, President and CEO of Flora Growth. “Avaria has achieved impressive and continued growth of its KaLaya brand based on the quality and efficacy of the product. Our team is very excited to bring their award-winning topical pain products to our LATAM distribution network, and to produce cannabinoid-infused KaLaya products at Flora Lab.”
“We believe that KaLaya products provide the best relief that you can get without a prescription,” said Dr. Keith Burk, M.D., founder and CEO of Avaria. “Our KaLaya pain cream brand has enjoyed strong success since inception and has garnered much consumer praise while receiving numerous industry awards. We’re incredibly excited to partner with Flora Growth to bring our award-winning KaLaya products to new international markets, and moreover, to produce cannabinoid-infused versions of these already established and highly efficacious products that our consumers have been demanding and looking forward to for some time now.”
KaLaya Observational Study on Pain Relief
A perception study with 48 volunteers was conducted by Avaria at Beechwood Clinic in Waterloo, Ontario, in 2019. These patients had acute and/or chronic medical conditions including arthritis, tendonitis, and joint pain, among others, and were asked to evaluate their experience of pain relief after application of KaLaya’s 6x Extra Strength Pain Relief.
The results showed that all volunteers felt improvement in pain or were free of pain within two minutes of application of K6XPR, where 52.1% felt pain relief within one minute. The average reduction in pain is 5 points on a 1-10 point pain score. Results indicate that K6XPR is an effective and efficient topical pain treatment for a variety of acute and chronic pain conditions.
About Flora Growth’s Recent Financing
Having received net proceeds of $31.5M from the recent closing of Flora’s public offering, the Company is well funded for growth as it continues to execute on its business initiatives including an expansion into the U.S. CBD market, a growth investment into recently acquired Vessel Brand, and an expansion into the newly legalized German adult-use cannabis market.
“Since our IPO in May of 2021, we have made substantial progress to expand our distribution network, launched new brands and brand partnerships, and closed or advanced multiple transactions. Looking forward, we expect to use this capital to amplify revenue growth from our operating divisions, identify and acquire new accretive M&A targets, and enter new markets like Germany’s newly formed adult-use cannabis market as legalization developments continue to unfold internationally,” commented Luis Merchan, Flora’s CEO.
About Avaria Health & Beauty Corp.
Privately owned and operated since 1995 by experienced medical professionals, Avaria Health & Beauty Corp., has over 20 years of experience in the formulation, manufacturing, and sale of topical creams, oils, emulsions, liquids, lotions, gels, and salves. Proudly Canadian, Avaria Health & Beauty Corp. is committed to maintaining its status as a 100% Canadian company. Research, development, and manufacturing takes place in Waterloo and Cambridge, Ontario. Avaria Health & Beauty Corp. brands enjoy distribution at all levels of retail and online, domestically, as well as in select international markets.
About Flora Growth Corp.
Flora is building a connected, design-led collective of plant-based wellness and lifestyle brands that delivers the most compelling customer experiences in the world, one community at a time. As the operator of one of the largest outdoor cannabis cultivation facilities, Flora leverages natural, cost-effective cultivation practices to supply cannabis derivatives to its diverse business divisions of cosmetics, hemp textiles, and food and beverage. Visit www.floragrowth.com 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 size of markets for cannabis and cannabis products; the expected performance of FloVaria; the impact of FloVaria on Flora’s business; the market for KaLaya products; Flora’s cultivation yields; Flora’s ability to sell cannabis and cannabis products to international markets; the collaboration with third parties; 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.