Cannabis Powerhouse Flora Growth announces the acquisition of the Global Health franchise

International cannabis company Flora Growth Corp. announced this week that it has signed an agreement to acquire Franchise Global Health Inc., a German-based multinational operator in the medical and pharmaceutical cannabis sectors. The news comes the same week German officials revealed the government’s plan to legalize recreational marijuana, a move that will create the largest legal market for adult cannabis in Europe.

Flora Growth is a global cannabis company with operations in five countries, including one of the largest outdoor marijuana growing operations in the world in Colombia. Under the terms of the agreement, Flora Growth will acquire 100% of the issued and outstanding common shares of Franchise Global Health (FGH). In return, Flora Growth will issue between 36,615,060 and 43,525,951 of its common stock to former FGH shareholders upon termination of the agreement. Completion of the agreement is subject to customary closing conditions, including shareholder and regulatory approval.

Franchise’s German operations primarily operate in the import and distribution markets of pharmaceutical and medical cannabis export, serving 1,200 pharmacies in Germany and supplying non-cannabis-based medical products to 28 other countries. The acquisition is expected to accelerate Flora’s expansion into the European cannabis and pharmaceutical markets with prescription drugs, according to a statement from Flora Growth, “and would provide the company with immediate access to a wealth of knowledge and intellectual property. which FGH has developed, including 41 registered cannabis strains in Colombia and the first registered cannabis seed bank in Copenhagen, Denmark, which hosts 286 strains. “

Germany reveals plan to legalize recreational marijuana

Flora Growth’s acquisition of Franchise was announced the same week German officials revealed details of its plan to legalize recreational cannabis use for adults. Under the plan, which probably wouldn’t be implemented before 2024 and is subject to review by the European Union, adults aged 18 and over would be allowed to possess between 20 grams and 30 grams (about one ounce) of cannabis per personal use.

Luis Merchan, president and CEO of Flora Growth, says the company’s new presence in Germany gives it access to further emerging markets for legal cannabis in Europe.

“This acquisition should give Flora Growth a crucial foothold in Germany, the region’s most important cannabis market,” Merchan writes in an email. “The Global Health franchise would strengthen our international business revenue, provide us with access to pharmaceutical distributors and accelerate the flow of our medical cannabis into Europe.”

The acquisition of all shares in Franchise Global Health will result in the indirect acquisition of its subsidiaries, including Hilzingen-based Phatebo GmbH, a leading distributor of export pharmaceuticals and medical cannabis products in the European Union and ACA Müller ADAG Pharma Vertriebs GmbH (“ACA Müller”), which holds the first German medical cannabis import and distribution license, granted by the government regulators in 2017.

In a statement, Merchan said that “we are connecting our commercial infrastructure and portfolio of medical cannabis products to the German and EU medical market, while gaining direct access to European pharmaceutical distributions. We believe the franchise it will significantly increase our international commercial revenues and provide essential distribution to German pharmacies and a growing wholesale market. “

Flora Growth said the combined companies should “provide at least $ 3.0 million of annualized cost synergies within the first year following the completion of the acquisition, primarily in the areas of reducing corporate administrative expenses.”

“Luis and I share the same vision of creating a leading and sustainable cannabis business. Flora has the right platform to implement this strategy through mergers and acquisitions and organic growth. We are thrilled to join forces, “said Clifford Starke, CEO and Executive President of Franchise Global Health.” Together we have a strong revenue base, a proven consumer packaged goods business that can be replicated in Europe and a distribution network In recent months we have worked tirelessly to identify synergies, reduce costs and create an industry-leading team “.

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