Flora Growth Completes Successful First Cannabis Extraction Through New Facility, Initiates EU-GMP Certification Process

Rhea-AI Summary

Flora Growth Corp. announced the completion of its 10,500 ft² extraction facility via its subsidiary Cosechemos, enhancing its annual distillate capacity to 15,000 L. The first batch of High-THC crude oil has been extracted and submitted for the 2022 quota. Cosechemos is also beginning the EU-GMP certification process, allowing potential export of medical-grade cannabis derivatives. The facility aims to improve product offerings while leveraging low-cost outdoor cultivation, targeting growth in the expanding global cannabis derivatives market.

Positive

• Completion of a 10,500 ft² extraction facility.
• Increased distillate capacity to 15,000 L annually.
• First batch of High-THC crude oil extracted and submitted for quota.
• Initiation of EU-GMP certification process.
• Focus on low-cost outdoor cultivation at 6 cents per gram.

Negative

• None.

• Flora’s cultivation and extraction division, Cosechemos, completed construction of a 10,500 ft² state-of-the-art post-harvest and extraction facility with annual capacity of 15,000 L of distillate
• The first batch of crude oil has been extracted, where the product was submitted to the Colombian Government to obtain Flora’s 2022 quota for High-THC derivatives, building on Flora’s existing quota of 7,900 kg of dried High-THC flower
• Cosechemos has initiated the pre-audit process for EU-GMP certification, which will enable export of medical-grade cannabis derivatives to international markets when paired with its existing GACP certification

MIAMI & TORONTO--(BUSINESS WIRE)-- Flora Growth Corp. (NASDAQ: FLGC) (“Flora” or the “Company”), a leading all-outdoor cultivator and manufacturer of global cannabis products and brands, announced today that its wholly owned subsidiary, Cosechemos, has produced the first batch of crude oil through its newly constructed extraction facility. Further, Cosechemos has initiated the process to become EU-GMP certified. The completed facility will serve as the Company’s primary processing hub, facilitating the drying and processing of Flora’s all-outdoor cultivated flower into finished, packaged dry flower and extracted material for domestic production and export to wholesale cannabis markets.

In December of 2021, Flora’s laboratory quality assurance and regulatory team completed the installation and testing of all extraction equipment. The team successfully extracted the first batch of High-THC crude oil, where the product was submitted to the Colombian Government to obtain Flora’s 2022 quota for THC derivatives. At this time, the team is continuing commercial CBD extraction.

With this major milestone complete, the company has initiated pre-audit work for the completion of the EU-GMP certification. Upon receipt of EU-GMP certification, and when paired with Flora Growth’s recent Good Agricultural and Collection Practices (GACP) certification, Flora will be positioned to target international medical cannabis markets. Flora intends on leveraging its cost advantage - with the Company’s low-cost, outdoor-cultivated cannabis grown as inexpensively as 6 cents per gram - to penetrate international medical cannabis markets with its low-cost dried flower and derivatives.

“Global cannabis markets are growing at an incredible rate, and Flora is ready to meet that demand for cannabis-derivatives with the completion of our new EU-GMP compliant extraction facility in Colombia,” said Luis Merchan, President and CEO of Flora Growth. “This is another major step for Flora Growth, as we are now in a position to seek EU-GMP certification, with the ultimate goal of disrupting the global cannabis derivatives market with our low-cost product. Further, the completion of the facility immediately allows us to supply extracts and derivatives to our CPG portfolio, including Flora Beauty and Kasa brands, unlocking additional cost efficiencies.”

Flora Growth’s post-harvest and extraction facility stands at 10,500 square feet at Flora’s cultivation site in Bucaramanga, Colombia, bringing total extraction capacity to over 15,000 litres of distillate annually. The new facility is fully automated and features cryo-ethanol extraction that yields economical and high-quality cannabinoid derivatives at high-throughput. The facility expedites Flora’s ability to produce dried and packaged flower, derivatives, distillate, and finished goods entirely in-house.

“Being fully integrated, with internal processing, paired with our expanding distribution channels, was a strategic decision and one that we believe will have long-term benefit as the cannabis derivatives market further stabilizes and expands,” said Jason Warnock, CRO of Flora Growth. “This new facility will also help to increase the range of our product offerings, so that our team can not only produce high-quality cannabis flower, but also produce derivatives and active pharmaceutical ingredients (or APIs) for international medical markets.”

About Flora Growth Corp.
Flora is building a connected, design-led collective, of plant-based wellness and lifestyle brands, that delivers the most compelling customer experiences in the world, one community at a time. As the operator of one of the largest outdoor cannabis cultivation facilities, Flora leverages natural, cost-effective cultivation practices to supply cannabis derivatives to its diverse business divisions of cosmetics, hemp textiles, and food and beverage. Visit www.floragrowth.ca or follow @floragrowthcorp on social for more information.

Cautionary Statement Concerning Forward-Looking Statements
This document contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: the size of markets for cannabis and cannabis products; Flora’s ability to cultivate, process, and extract cannabis; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, or the forward-looking events discussed in this document and other statements made from time to time by us or our representatives not occurring, except as may be required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220111005434/en/

Investor Relations:

Evan Veryard

evan.veryard@floragrowth.ca

Public Relations:

Cassandra Dowell

+1 (858) 264-6600

flora@cmwmedia.com

Source: Flora Growth Corp.

FAQ

What recent milestone did Flora Growth Corp (FLGC) achieve?

Flora Growth Corp completed the construction of a 10,500 ft² extraction facility.

How much distillate can the new Flora Growth extraction facility produce annually?

The new facility has an annual capacity of 15,000 liters of distillate.

What is the significance of Cosechemos in Flora Growth's recent announcement?

Cosechemos is responsible for the extraction of High-THC crude oil and the initiation of EU-GMP certification.

What does EU-GMP certification mean for Flora Growth Corp (FLGC)?

EU-GMP certification will enable Flora to export medical-grade cannabis derivatives to international markets.

What is the cost advantage of Flora Growth's cannabis cultivation?

Flora Growth cultivates cannabis at a low cost of 6 cents per gram.