Global Weed Brand To Buy Australian Vaporizes For $1.7M In Shares

Cannabis company Flora Growth Corp. FLGC has signed a definitive agreement Monday to buy Australian Vaporizers Pty Limited from a health-tech company, Lifeist Wellness Inc. LFST (FRANKFURT: M5B) LFSWF, a health-tech company. Under the deal, Flora will acquire all of the issued and outstanding shares of Australian Vaporizers in exchange for 600,676 Flora common shares, valued at $1.7 million based on the closing price of Flora's common shares on September 15, 2023, subject to working capital adjustments. The transaction is expected to close in the fourth quarter of 2023.

Australian Vaporizers is expected to be immediately accretive to Flora and is anticipated to provide annual contributions of $5.2 million in revenues, $1.2 million in gross margins, and $500,000 in net income. For its most recently completed six-month period ended May 31, 2023, the acquired business achieved $2.5 million in revenues, $600,000 in gross margins, and $25,000 in net income. At closing, Australian Vaporizers is expected to have a cash hand of at least $300,000, inventories of $800,000, and working capital of $1.1 million.

"In addition to quickly improving the Company's bottom line, Australian Vaporizers has the potential to drive synergies with Flora's existing portfolio of brands, including selling Vessel Brand products in Australia which is Flora's fastest growing segment," Clifford Starke, CEO of Flora stated.

Vessel is Flora's vaporizers brand operating through direct-to-consumer and retail sales. Vessel's products include cannabis consumption accessories, personal storage, and travel accessories for the vape and dry herb categories, which are sold to consumers, dispensaries, smoke shops and cannabis brands.

"I am intimately familiar with Australian Vaporizers' solid track record from my tenure as a board member of Namaste Technologies. The Australian market has demonstrated impressive growth and the acquisition of Australian Vaporizers would allow Flora to be at its forefront," Starke concluded.

Meni Morim, CEO of Lifeist Wellness, commented, "Australian Vapes is a legacy business within Lifeist and its sale represents another step of our transformation into a portfolio of wellness focused products and ventures. The decision to divest Australian Vapes aligns both strategically and financially with our long-term business plans.”

Founded in 2010, Australian Vaporizers has grown to become one of the largest online retailers of vaporizers, hardware, and accessories in Australia. It sold over 92,000 units to over 30,000 active customers through business-to-business and direct-to-consumer channels.

Flora At Benzinga Cannabis Capital Conference

Meanwhile, Flora was awarded Best M&A Deal at the Benzinga Cannabis Capital Conference last year for the acquisition of JustCBD in 2022.

Through JustCBD, Flora's cannabis products reached Amazon and US airports through distribution company OTG Management.

Price Action

Flora's shares closed Friday market session 8.14% higher at $2.79 per share.

The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this September 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.

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