Flora Growth Corp. (NASDAQ: FLGC) has purchased Just Brands LLC and High Roller Private Label LLC for cash consideration of $16 million and 9.5 million privately issued Flora common shares. Just Brands and High Roller are the owners of the JustCBD brand and associated operations. JustCBD generated audited revenues of $28 million and EBITDA of $7 million in the fiscal year 2020 across multiple categories, including gummies, tinctures, vape cartridges, creams, pet wellness, among others, all of which we believe to have meaningful long-term growth potential. Flora said it expects JustCBD’s financial performance to immediately contribute to Flora’s 2022 revenues and earnings. The stock was popping by 11% to lately sell at $2.03.
“We are thrilled to announce this news today and welcome the JustCBD team to Flora. To build such a recognizable brand in this noisy, rapid-growth market is a testament to everyone at JustCBD,” said Luis Merchan, CEO of Flora. “This acquisition continues to strengthen Flora’s foothold in the U.S. wellness market as well as providing meaningful growth acceleration and delivering human capital to the Flora organization. Additionally, there is incredible opportunity to leverage our economically-advantaged cultivation to support the expansion of the JustCBD brand in the global market.”
The company noted in a statement that JustCBD is an established CPG brand with a portfolio of over 300 products and a seamless omnichannel approach that includes a direct-to-consumer business with over 300,000 customers and a network of over 14,000 stores across the United States and internationally. The acquisition should enhance Flora’s infrastructure in the United States with JustCBD’s widespread distribution across mainstream U.S. channels and its production facility in Fort Lauderdale, Florida.
“Our team is incredibly excited to join Flora and rapidly expand JustCBD’s presence in new markets with new growth capital and an established international presence,” said Hussein Rakine, CEO of JustCBD. “Since the beginning, we have worked hard to build JustCBD into a prominent wellness brand in a hyper-growth space by delivering consistent experiences that have resulted in our loyal customer base. By combining our product portfolio with Flora’s, we believe we have an industry leading wellness offering that will thrill our existing customers and attract new ones as we reach new markets.”
Flora intends to leverage synergies between its existing brand portfolio, including Vessel, Tonino Lamborghini, and Mind Naturals, with JustCBD’s extensive U.S. distribution network to further amplify revenue growth for these brands. To date, the majority of JustCBD’s sales have been derived from the U.S. wellness market, where it has developed into a prominent and highly sought-after brand. With the support of Flora’s strong balance sheet, we believe JustCBD is now positioned to expand into international markets where CBD products are permissible, including Germany, Mexico, and Colombia. JustCBD’s database of over 300,000 customers increases Flora’s existing customer base to over 500,000 customers.