Flora Growth Forms JV With Canada's Avaria Health & Beauty Corp Following $34.5M Raise Via Public Unit Offering

Cannabis cultivator and manufacturer Flora Growth Corp. FLGC revealed Friday that it has entered into a definitive agreement with Canada-based Avaria Health & Beauty Corp. to form a joint venture company - FloVaria Corp - equally owned by both entities.

The move follows Flora Growth's announcement that it closed its $34.5 million underwritten public offering of 11.5 million units.

Through FloVaria, Flora will provide distribution, supply chain and marketing support for KaLaya products in Colombia, Mexico and other LATAM countries, while Avaria will initially supply the finished product to FloVaria.

If 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.

Moreover, 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.

In addition, Flora Lab agreed to manufacture FloVaria's cannabinoid-infused products, emphasizing incorporating cannabidiol, using cannabis from Flora's cultivation facility, which will be distributed across LATAM using Flora Lab's established distribution channels, to export to the U.S. market.

Luis Merchan, president and CEO of Flora Growth, said that "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."

More recent news from Flora Growth:

Flora Growth's Stock Plummets On Announcing Pricing of $30 Million Public Offering

Flora Growth Completes Acquisition of Vessel Brand, Seeks To Diversify Its Premium Brand Portfolio

Flora Growth Buys Vessel Brand For $30M In Stock And Cash

Price Action

Flora Growth's shares were trading 2.8302% lower at $2.12 per share during the pre-market session on Friday morning.

Photo: Courtesy of Cytonn Photography on Unsplash

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Posted In: CannabisNewsPenny StocksMarketsjoint ventureLuis Merchan
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