The Flowr Corporation is the latest cannabis company in a crowded launch calendar to raise money ahead of going public. The Canadian cannabis company lead by former MedReleaf founders raised roughly C$36 million in an oversubscribed offering. This raise solidly positions the company for its reverse take over of The Needle Capital Corp. which is expected to happen on or about September 10.
The Flowr Group consists of Tom Flow, a founder and former COO of MedReleaf, as its President and Vinay Tolia, Flowr’s incoming Chief Executive Officer. Flowr builds and operates large-scale, GMP compliant cultivation facilities utilizing its own patented growing systems.
The company recently signed a Memorandum of Understanding to supply premium cannabis to the British Columbia Liquor Distribution Board which will be the sole retailer of non-medicinal cannabis in the province following the October 17 legalization of adult recreational consumption. The company also announced earlier in the year that it had been selected by the Hawthorne Canada subsidiary of The Scotts Miracle-Gro Company(SMG) for an exclusive strategic R&D alliance.
“Completing this oversubscribed offering is another exciting milestone on Flowr’s journey to producing the finest cannabis experience in the world as well as an acknowledgment of investors’ belief in our business model,” said Tolia. “Coming on the heels of obtaining our Health Canada sales license, these funds will enable us to scale operations and provide consumers and patients with Flowr’s clean, consistent, premium-quality product in the medicinal and adult-use markets.”
According to the company statement, the proceeds will be used for the buildout of Flowr’s 85,000 square foot Kelowna, BC cultivation facility. The Kelowna facility, which is currently approximately 20% complete, is being built using proprietary designs and patent-pending growing systems that are expected to enable Flowr to grow ultra-clean, premium quality cannabis at scale and with high yields. Flowr expects the facility to reach full capacity in 2019, targeted to be in excess of 12,000 kilograms annually. The company is also building a 50,000 square foot research and development facility integrated into its Kelowna campus and funded through an exclusive alliance with the Hawthorne Gardening subsidiary.
Following the RTO, the shares will trade on the Toronto Venture Exchange with 13,807,734 subscription receipts sold at a price of C$2.60 per receipt for gross proceeds of C$35,900,104 with Clarus Securities and Eight Capital as the Agents.