Flora Growth Signs Definitive Agreement to Acquire Vessel Brand, Entering US Cannabis Consumer Technology Market & Strengthening Management Team
November 03 2021 - 7:05AM
Business Wire
- Vessel, a leader in the luxury cannabis consumer technology
market, will diversify Flora’s premium brand portfolio
- Pending acquisition represents opportunity to fast-forward
Flora’s penetration into U.S. and Canadian cannabis markets by
acquiring a rapidly expanding, industry-leading company with strong
revenue growth
- Vessel leadership to integrate with Flora’s core management
team and leverage their extensive brand building, marketing, and
sales experience to amplify and accelerate growth across Flora’s
global portfolio.
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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version on businesswire.com: https://www.businesswire.com/news/home/20211103005534/en/
Investor Relations: Evan Veryard
evan.veryard@floragrowth.ca
Public Relations: Cassandra Dowell +1 (858) 264-6600
flora@cmwmedia.com
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