Flora Growth Achieves Major Cultivation Milestones

June 8, 2020

Flora Growth Corp. (“Flora” or the “Company”) is pleased to provide an operational update from Cosechemos Ya S.A.S. (“Cosechemos”), Flora’s Colombian cultivation subsidiary. Despite global challenges from COVID-19, Cosechemos has continued operating and has achieved major operational milestones including the completion of its second crop planting, completion of the first phase of construction of the propagation greenhouse, and the commencement of the organic certification process.

Cosechemos’ successful operational results stem directly from the prioritization of employee health and safety through strict COVID-19 mitigation measures.

COVID-19 Mitigation Measures Implemented

After the Colombian government declared the agricultural industry as essential - allowing companies such as Flora to continue their operations - strict COVID-19 mitigation measures were implemented at the Cosechemos cultivation facility.

These measures include:

  • Mandatory entry processes, which include personal temperature measurements, health status diagnosis, change of clothes, hand washing;
  • 5-minute debriefs to start each day;
  • Consistent access to antibacterial soap and hand washing stations;
  • Mandatory masks and gloves while inside the facility; and
  • Dedicated uniforms that remain in the facility for all staff.

The primary focus of these measures is to protect the health and safety of staff and to ensure Flora can continue executing on its business plans. Cosechemos’ Head of Workplace Health and Safety is responsible for the implementation and monitoring of these measures, where she submits regular reports to Flora’s Vice President of Agriculture, Javier Franco.

These measures are not expected to materially affect the cost of operations at the Cosechemos cultivation facility, as the team continues maintaining the recent crop planting.

Second Crop Planting Completed

Flora’s Cosechemos team has achieved a major cultivation milestone; they completed the targeted crop planting, which covers 2.1 hectares (5.19 acres) worth of land at the facility in Giron (Bucaramanga). This specific crop consists of 16,000 plants, with seven different varieties and represents a small fraction of the total 247 acres licensed for cultivation.

The purpose of this planting is to optimize the growing process and determine the best strains to cultivate at the facility using a rigorous scientific process. This includes monitoring plant health, growth rates, density factors, yield, and CBD and THC content, among other metrics.

We intend to use the results of these studies to optimize Cosechemos’ cultivation strategy around CBD output and cost for all future crop plantings.

Javier Franco, Flora’s VP of Agriculture, commented: “These optimization crop plantings are an important step in our development before we scale cannabis production towards the full 247 acres at the farm in Giron (Bucaramanga). We want to ensure we use our capital efficiently and continue to achieve our targeted production cost of US$0.18 per gram for every planting.”

Organic Certification Process Initiated

A second major milestone achieved at Cosechemos was the advancement of the organic certification process. After negotiations with different third-party organic certifiers, the team selected Ceres, a German certifier. The selection was based on the company’s strong presence in Bucaramanga, Colombia and their accreditation and registration with the European Commission and the USDA / NOP standards.

The organic certification of the cannabis cultivation process requires verification of the inputs, growing techniques, and processing, where the entire process is expected to take 3 years from the initiation of organic growing methods. This multi-year process is required to ensure the soil is completely free of non-organic fertilizers and pesticides from earlier farming.

Once the Ceres organic certification is obtained, Flora’s CBD oil can be used to produce certified-organic CBD products under international standards. The organic certification of Flora’s products is expected to demonstrate the Company’s commitment to sustainability and product quality, and likely results in a meaningful price premium to Flora’s non-organic competitors.

In order to further demonstrate its commitment to sustainability and excellent employee health and safety standards, Cosechemos continues to advance the certification process for GLOBAL Good Agricultural Practices (GLOBALG.A.P.). GLOBALG.A.P. is the internationally recognized standard for good farming practices to ensure safe and sustainable agricultural production.

This is a voluntary certification that covers factors such as product safety, environmental sustainability, employee health and safety, and various management controls and systems. With the certification process initiated earlier, Cosechemos is now undergoing an internal review process before review from GLOBALG.A.P., with the final certification expected to be obtained before the end of 2020.

Greenhouse Updates Completed

The final major milestone was the completion of the first phase of construction of the propagation greenhouse. These capital facilities include:

  • A modern automated irrigation system;
  • Automated greenhouse control systems to maintain optimal growing conditions; and
  • Tabletop germination and rooting banks.

This new greenhouse facility is projected to allow the propagation of up to 22,000 plants weekly, which is enough to plant 3 hectares (7.4 acres) of cannabis crop per week.

Damian Lopez, Flora’s CEO, commented: “We are very proud of the major milestones achieved at Cosechemos, our cultivation subsidiary, especially in the face of challenges created by COVID-19. Each of these milestones represents an important step in Flora’s goal of becoming the world’s leading low-cost organic medical cannabis producer. We hope our teams’ continued progress demonstrates to investors that we are still able to take meaningful strides to realize our business plans while completing our Regulation A+ financing.”

Flora Growth Corp.

At Flora, we are building one of the world’s largest and lowest cost vertically-integrated producers of organic cannabis oils, CBD-infused foods & beverages, and pharmaceutical-grade medical and cosmetic-grade derivatives from the cannabis plant.

For further information, contact:
Evan Veryard

+1 416 571 9037
Website: www.floragrowth.ca

Cautionary Notes
This news release may contain forward-looking statements. These statements include statements regarding the Company’s operations, Cosechemos’ operations, including the optimization of its growing process, the completion of Flora’s current Regulation A+ Tier 2 financing, the continued mitigation of the COVID-19 pandemic, the completion of the organic and GLOBALG.A.P. certification processes, the Company’s and Cosechemos’ ability to obtain regulatory approvals to infuse medicinal cannabis into products and the Company’s future plans and objectives. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially. We do not assume any obligation to update any forward-looking statements, except as required by applicable laws.

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