Facility Receives GACP License, First Commercial Harvest Anticipated in 2025
October 23, 2024 8:20 AM EDT | Source: Flora Growth Corp.
Fort Lauderdale, Florida–(Newsfile Corp. – October 23, 2024) – Flora Growth Corp. (NASDAQ: FLGC) (FSE: 7301) (“Flora” or the “Company”) is excited to announce significant progress regarding its strategic investment in Hoshi International Inc. (“Hoshi”) in Portugal. This update showcases the continuous advancements following Hoshi securing a new financial partner in 2023, which has accelerated the progress of its operations.
Hoshi’s new financial partner has undertaken the responsibility of capital expenditures and operational expenses in return for an equity stake in the company. As a result of this collaboration, Hoshi has achieved progress in several key areas:
- Facility Construction: Completed the first phase of construction at the facility, which includes a 1,200-square meter greenhouse with a production capacity of up to 1,500 Kilograms per year.
- Licensing Inspection: Conducted a licensing inspection by the Portuguese regulator and obtained its good agricultural and collecting practice (“GACP”) production and processing license.
- Cannabis Clones: Received the first 70 cannabis clones as part of the pre-licensing process.
The project in Portugal currently employs 18 full-time staff. Approximately $20 million has been invested in the facility to date.
“We are pleased with the progress Hoshi has made over the past 18 months. Our investment in the European cannabis market is in line with our strategic goals. We are confident that Hoshi’s facility will become a significant player in the European cannabis landscape as the market continues to evolve,” said Clifford Starke, Chief Executive Officer.
Flora initially invested $2.4 million in equity into Hoshi in 2021, securing a 10% ownership stake in the company. Hoshi controls 51% of the Portuguese entity operating the facility. As milestones are achieved, Hoshi’s ownership stake will decrease to 25%.
“We have faith in Hoshi’s capabilities to achieve its objectives and timelines. The GACP certifications and the projected commercial harvest in 2025 mark important milestones for both Flora and Hoshi as we capitalize on the growing demand for high-quality cannabis in Europe,” Mr. Starke concluded.
Flora is considering expanding its EU-GMP license from Germany by partnering with Hoshi to establish a direct sales channel. This strategic initiative would enable Flora to secure a long-term supply of high-quality medical cannabis from Hoshi’s low-cost operations.
Portugal has become an appealing jurisdiction for cannabis production, offering a strategic advantage in meeting the demands of Germany and the broader European market. With suitable cannabis cultivation and processing facilities, Portugal provides optimal conditions for producing high-quality medical cannabis that meets stringent European standards. The country’s efficient logistics infrastructure allows for distribution across Europe, while its favorable VAT regime and lower operational costs make it a desirable location for cannabis companies.
About Flora Growth Corp.
Flora Growth Corp. aims to become a leading NASDAQ small-cap international cannabis company. Flora is a cannabis-focused consumer-packaged goods leader and pharmaceutical distributor serving all 50 states and 28 countries with 20,000+ points of distribution worldwide. For more information on Flora, visit www.floragrowth.com.
Investor Relations:
Investor Relations ir@floragrowth.com
Clifford Starke Clifford.Starke@floragrowth.com
