Flora Growth CEO Shares Insights On How To Cultivate An Ethical And Fast-Growing Cannabis Company
The cannabis industry has received rapid global growth in recent years, due in part, to the increasing recognition of the plant’s possible medicinal and therapeutic benefits. As cannabis legalization continues to gain momentum, we’ve begun to see an increased production of what is regarded as one of the oldest cultivated plants.
Flora Growth, a vertically integrated cannabis company, entered the industry intending to become the world’s largest producer of low-cost, naturally grown medicinal-grade cannabis oils and extracts in the world.
In Flora’s quest to produce low-cost and high-quality cannabis, the company employed Cosechemos as its flagship cultivation facility. Located in Bucaramanga, Colombia, Cosechamos was chosen for its ideal growing conditions.
The cultivation facility receives approximately 12.8 hours of natural daylight every day. In turn, the facility can have 3+ crop cycles per year as opposed to the typical 1-2 cycles in other geographical locations.
“Colombia is a large country with various climates depending on where you are. We settled on Bucaramanga in the Department of Santander and we chose this area because it has all the ideal conditions for growing cannabis outdoors — ideal climate, sunlight, and access to water,” said CEO of Flora Growth Damian Lopez. “And one of the benefits of the country, and particularly the region, is it has a booming cut flower industry so the labor force is quite skilled and familiar with the agricultural industry.”
Flora’s core product is its organic CBD oils. CBD, which stands for Cannabidiol, is a non-psychoactive drug derived from the cannabis plant. Unlike THC, which is the active ingredient that causes the feeling of a high among users, CBD does not produce a sensation of being “high.”
Research on the benefits of CBD is still ongoing, but studies have shown that CBD is effective in stopping or lessening the number of seizures among patients. The strongest evidence however has been for its effectiveness in treating some childhood epilepsy syndromes such as Dravet syndrome and Lennox-Gastaut syndrome. CBD has also been found to help treat anxiety, insomnia, and various types of chronic pain.
In working to maintain the quality of the crop, Flora’s cultivation facility produces a cannabis crop that is 100% organic. The company’s completely organic crop allows them to expand their portfolio to serve the food and beverage, cosmetics, and wellness markets — all of which are expected to represent over 60% of the total cannabis market share by 2024.
In the cosmetic market, Flora recently launched its beauty brand Flora Beauty. The brand was founded by former Miss Universe Paulina Vega. This beauty division currently has two lifestyle brands: Mind Naturals and AWE.
Mind Naturals is an all-natural beauty and skincare brand that was born out of the recognition that time is our most precious commodity. Their products, which currently include a cleanser, moisturizer, eye cream, and hydrating mask will all be infused with Flora’s organic CBD oils. Mind Naturals only sources green and clean ingredients. Mind is also working to extend its vision for the sustainability of their packaging, with its current sugarcane packaging already actively demonstrating that vision. It is fully recyclable, reduces environmental impact, and doesn’t contaminate existing streams.
The idea behind the name Mind comes from the notion of creating a happy place in a moment of self-care — finding the time to connect with yourself in a moment of clarity and serenity.
“We've spent a ton of time developing Flora Beauty with the right people and with the right ingredients. We're focused on creating a product from high-quality organic ingredients — products that have been derived from the Colombian Amazon and Colombian Jungle. We're also really focused on sustainability,” said Lopez.
The Effects Of COVID
COVID-19 has had a tremendous impact on almost every industry, including cannabis. Many have had to shift their business models and those who sell directly to retail have suffered from widespread closures.
Flora only just launched their retail business. The CEO told Benzinga that their strategy from the beginning was to launch their products electronically, developing the brand, acquiring market share, and then transitioning to brick-and-mortar stores when the time is right.
“We weren't hurt by COVID as much as others, but I think generally all companies are going to feel the effects of it especially if they're selling products to consumers. There's going to be a trend to moving to e-commerce so I think companies that do that well will succeed.”
The CEO continued to say he has a positive outlook for the future of the cannabis market. As we step into the upcoming election in the U.S., many cannabis CEOs and leaders await the effects that the results will have on the industry in regards to federal legalization.
“I think regardless of who wins there will be a movement to legalizing cannabis which I think will be a rising tide that lifts all ships and for companies that are very nimble, that are agile and can move quickly, I think they'll benefit from that,” said Lopez.
What Sets Them Apart
According to Lopez, being shrewd has allowed Flora to grow at double the speed. Acquiring a company with a license was the first step the business took and since then has made strategic moves along the way from choosing the right cultivation facility to focusing on producing organic, high-quality, and low-cost products.
“We tried to focus on growing the business — whether organically like Flora Beauty or through acquisitions like Cosechemos — but not making acquisitions for the sake of buying companies or for a press release. We only close deals that we believe will generate revenue & sales and result in income and value for shareholders,” said Lopez.
In the “cannabis bear market,” many cannabis companies have had a difficult time raising capital and receiving support. The CEO noted how fortunate Flora has been in obtaining support and interest from shareholders.
“I think people are starting to appreciate and understand our story and are really getting behind us.”
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