Florida-based Flora Growth has announced the sale of its Colombian-related subsidiaries and assets to a private company for CAD$0.8 million.
The sale will provide Flora Growth with annual savings of US$6.1 million.
The sale includes all of Flora Growth’s operations in Colombia, including its 361-acre Cosechemos farm located in Giron, Colombia and its related processing facilities and inventory, all other assets relating to Flora Lab 2, Flora Lab 4 and Flora’s Colombian food and beverage and consumer products business (collectively, the “Colombian Assets”).
Flora’s Chief Executive Officer, Clifford Starke, commented: “The divestiture of our Colombian Assets is part of our plan to concentrate on core business divisions.
“This being a prominent lifestyle brand in the United States and a player in international pharmaceutical distribution focused on therapeutics, starting with medical cannabis.”
Flora’s Chief Financial Officer, Dany Vaiman, added: “We have made several strategic changes to cut costs and streamline operations.
“These changes are projected to deliver annual cost reductions amounting to US$6.1 million in cumulative annual savings when taken together with the US$3.4 million in savings from the divestiture of the Colombian Assets.”
The sale is expected to close by July 31, 2023 and Flora has stated it intends to maintain a presence in Latin America through Just Brands’ distribution relationships. Flora Growth also stated that its 2023 revenue guidance included some estimates regarding its Colombian Assets. The company’s management believes such guidance should no longer be relied upon and is in the process of reevaluating such guidance, and anticipates providing updated 2023 revenue guidance at the appropriate time.