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Flora Growth Corp. (“Flora” or the “Company”) is pleased to announce that it signed a non-binding letter of intent (“LOI”) to acquire 90% of Breeze Laboratory S.A.S. (“Breeze”) from Latin Canada Pharma Inc. (the “Transaction”). The Transaction is subject to the parties negotiating and entering into a definitive agreement and the closing of Flora’s current Regulation A+ Tier 2 financing.
This LOI further demonstrates Flora’s willingness to help prevent the spread of COVID-19 through Breeze’s coronavirus prevention kits, while simultaneously fulfilling its business objectives.
Breeze is a cosmetic and dermo-cosmetic development and manufacturing company based in Bogota, Colombia. The company currently manufactures INVIMA (Colombian FDA-equivalent) approved cosmetics and dermo-cosmetics and has started the process of obtaining EU-GMP certification. Once approved, we anticipate that Breeze will be one of the first companies in Colombia to carry this certification.
Breeze also manufactures formulas magistrales (master formulas), also known as compounded medications. These are pharmaceutical products prescribed and prepared by pharmacists to meet the unique needs of a patient and are intended to complement medical prescriptions.
Breeze has initiated the process to become a manufacturer of formulas magistrales that use medicinal cannabis to fight various diseases, such as the treatment of seizures associated with Lennox-Gastaut syndrome (LGS) and Dravet syndrome (SD) in patients who have not responded to anticonvulsant therapy. Other key use-cases for this cannabis-medication include assisting in the treatment of multiple sclerosis, fibromyalgia and lupus, among others.
Notably, Breeze’s revenues are on track to increase 230% in the first half of 2020 compared to the same period in 2019. Further, we expect that Breeze will start manufacturing all Flora Beauty products and the entire cosmetic line of the Cronomed group of laboratories in the second half of 2020. These additional sales are expected to yield meaningful revenue increases for Breeze over the ensuing years.
About the Transaction
The Transaction is subject to the parties negotiating and entering into a definitive agreement and is expected to close as soon as Flora’s current Regulation A+ Tier 2 financing is closed. In the interim, Flora will hold 90% of Breeze’s shares in escrow pending closing of the Transaction. The vendor has permitted Flora to take possession of the Breeze shares to ensure the prompt closing of the Transaction following the execution of the definitive agreement, which indicates the vendor’s good faith intention to close the Transaction on the agreed upon terms.
This Transaction is expected to allow the Flora team to safely develop and integrate Breeze into its existing business divisions, such as Cronomed (pharmaceuticals) and Flora Beauty (cosmetics). We project that Breeze will also be able to capitalize on the contracts and agreements already developed by Flora in the COVID-19 space.
Regarding Coronavirus Prevention Support
Breeze has started selling coronavirus prevention kits (“KEEP CLEAN kits”) that are designed to be a care and protection dermo-cosmetic kit (see image below). The KEEP CLEAN kit is expected to sell for US$15.30 and is currently being recommended by doctors due to its suitability for people with dermatitis. Other key components of the KEEP Clean kit include:
The KEEP CLEAN kits are available for purchase online (keepclean.com.co), through Breeze’s main Colombian distributors, and on Rappi, South American’s largest on-demand consumer delivery service. This is expected to allow Breeze to market its products to approximately 13 million Rappi users across Colombia. Breeze is also in discussions with large distribution partners located in Mexico and the United States.
Damian Lopez, Flora’s CEO, commented: “From a business point of view, the acquisition of Breeze is a unique opportunity to fulfill our objective of rapidly growing our customer-base from the outset by marketing high-value products. However, from a humanity point of view, the most important matter is that we will endeavour to continue to provide concrete solutions to assist in dealing with – and hopefully preventing in some capacity – the spread of this pandemic. We are tirelessly focused on achieving this goal and doing whatever we can to assist those in need during this difficult time.”
Flora Growth Corp.
At Flora, we are building the world’s largest and lowest cost vertically-integrated producer of organic cannabis oils, CBD-infused foods & beverages, and pharmaceutical-grade, medical and cosmetic-grade derivatives from the cannabis plant.
This news release may contain forward-looking statements. These statements include statements regarding the Company’s operations, Breeze’s operations, the Company’s ability to close the Transaction, the closing of Flora’s current Regulation A+ Tier 2 financing, the prevention of the COVID-19 pandemic, the Company’s and Breeze’s 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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