Flora Growth Corp. (NASDAQ: FLGC) ("Flora" or the "Company"), a leading all-outdoor cultivator and manufacturer of global cannabis products and brands, announced today it has entered into a definitive agreement in respect of the previously announced acquisition of 100% of Vessel Brand Inc. ("Vessel"). As set forth below, upon the closing of the transaction, Flora will acquire Vessel for aggregate consideration of US$30M, consisting of a combination of cash and the issuance of Flora common shares.
"The Flora team has been working diligently to execute on our various business initiatives and the signing of this agreement represents another significant step forward for the Company in 2021," commented Luis Merchan, President and CEO of Flora Growth. "We are incredibly excited to have reached an agreement to add Vessel to the Flora portfolio. Not only does Vessel have an exceptional product line with strong revenue growth, but its leadership team is second to none. Integration plans with the Vessel team are already well advanced and we expect step-change improvements to the marketing and sales strategies for our core consumer brands like Stardog and Mind Naturals, as well as new brand development in support of our global growth initiatives."
Vessel will bring a proven go-to-market strategy for direct-to-consumer sales for US and international cannabis markets. Vessel has also established relationships with U.S. multi-state operators and Canadian LP's who seek access to Vessel's premium technology offering through their white labeling business. Headquartered in Carlsbad, California, Vessel will serve as a key component of Flora's North American cannabis strategy across its entire product portfolio.
Vessel launched in 2018 with a singular focus - create a more thoughtful consumer experience at all touchpoints. With significant revenue growth year-over-year, Vessel finds continued success by bringing to market innovative products and experiences that elevate consumer expectations. It has a unique lineup of high-end dry-herb accessories and vape pen batteries, bespoke product programs for brands, and decades of go-to-market experience. These high-margin products, along with its development pipeline, are expected to drive incremental revenue and market share growth in new and existing categories.
The acquisition of Vessel is also expected to strengthen Flora's executive leadership team with the addition of the Vessel team's experienced cannabis, sales, marketing, design, and production professionals, including: Founder and CEO, James Choe, CFO, Garrett Potter, VP of Marketing, Jessie Casner, and VP of Performance, Jason Choe.
"As Vessel, and as brand builders in nearly every sector, our promise has been to create unparalleled experiences - we are looking forward to continuing to deliver on that promise with Flora," said James Choe, Founder and CEO of Vessel. "Flora is positioned to be a global leader in plant-based health and wellness by redefining the traditional narrative of a cannabis company. With unrivaled economies in the supply chain, a diverse brand portfolio roadmap, and most importantly a team built to meet the challenges of the industry, we see significant opportunities ahead."
About the Transaction
Pursuant to the terms of the definitive agreement between Flora, Vessel, and certain related third parties, upon the closing of the transaction (the "Closing"), Vessel will merge into a wholly-owned subsidiary of Flora, and Flora will acquire 100% of the equity interests of Vessel for consideration consisting of $8.0 million in cash and 4,557,318 privately issued Flora common shares.
Certain shareholders of Vessel that will receive in excess of a majority of the Flora common shares issued as part of the transaction consideration, will be required to enter into lock-up agreements restricting the transfer of such common shares for a period of six (6) months from the Closing. The Closing is subject to customary closing conditions, including the accuracy of representations and warranties and the fulfillment of certain covenants of the parties. It is anticipated that the Closing will take place in mid-November.
About Vessel Brand Inc.
The industry leader in cannabis consumer technology, Vessel works tirelessly to bring forth innovation and new designs that set industry standards. Vessel's promise is to make every experience more expressive and personal, and to deliver the best performance in its line, not only for its loyal customers but for brand partners as well. For more information, please visit www.vesselbrand.com.
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.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 size of markets for cannabis and cannabis products; Flora's ability to execute on its research and pharmaceutical strategies; the results of Flora's research; the collaboration with third parties; our business prospects and opportunities; and the acquisition of Vessel. 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.
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SOURCE: Flora Growth Corp.
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