Cannabis producer builds on partnerships with drugstore chain, celebrity chef

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Marijuana Producer

This Canadian cannabis grower aims to leverage deals with a major drugstore chain and provincial governments—and now a celebrity chef.


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THE FLOWR CORPORATION,$6.22, symbol FLWR on the Toronto Venture Exchange (Shares outstanding: 86.7 million; Market cap: $188.7 million; TSI Cannabis Quality Rating (CQR):, announced earlier this year that it had entered into an agreement to supply medical cannabis to Shoppers Drug Mart (wholly owned by Loblaw Cos., symbol L on Toronto).

In March 2019, Shoppers began selling cannabis through its online medical cannabis site ( Shoppers is now the exclusive direct-to-patient online provider of FlowRx products.

Flowr also recently hired celebrity Canadian chef Ryan Reed to develop signature edible cannabis products for the Flowr brand. Reed, a past winner of Iron Chef Canada and Chopped Canada and Victoria’s 2011 Chef of the Year, will collaborate with Flowr to research and develop high-quality edibles. These are expected to be legal for sale in Canada later this year.

Flowr operates what is expected to be an 85,000-square-foot cultivation facility in Kelowna, B.C. Over time, the company aims to build out additional facilities and sites adjacent to what it calls its Kelowna Campus.

On April 23, 2018, Flowr began the harvest of its first crop of medical cannabis at the facility. The interior of the Kelowna Campus continues to be under construction and is being completed in stages. Flowr is now operating 16,000 square feet of growing area in the structure. In anticipation of the phased construction of the Kelowna Campus, Flowr has purchased, or has entered into agreements to purchase, several parcels of near or adjacent land.

Meanwhile, Flowr is one of 32 suppliers picked to supply the B.C. Liquor Distribution Board with recreational cannabis.  As well, the Ontario Cannabis Store has entered into supply agreements with 26 licensed recreational producers including Flowr. The other provinces that Flowr supplies are Nova Scotia and Manitoba.

Flowr also operates a research and development facility dedicated to advancing cannabis cultivation techniques and systems. Its partner in that facility is Scotts Miracle Gro Company (symbol SMG on New York) and that company’s Hawthorne subsidiary.

In December 2018, Flowr acquired a 19.8% interest in European-based Holigen Limited for $6 million. Holigen is currently developing four cultivation facilities in Portugal and Australia along with production and research facilities

In the quarter ended December 31, 2018, Flowr produced 259,091 grams of cannabis, compared to no output a year earlier. Its first sales, in fact, came in the latest quarter, with the company selling 405,584 grams of cannabis (including some from inventory) for overall revenue of $2.9 million. Flowr lost $6.1 million, or $0.10 a share, compared to a loss of $1.9 million, or $0.04 a share. The company holds cash of $27.7 million.

Flowr aims to position itself as a producer of the highest quality medical and recreational cannabis, thanks in part to its research and development with Scotts Miracle-Gro as a partner.

However, startups are inherently risky, especially so in a new market with an evolving regulatory environment and low barriers to entry.

Still, the gap between Flowr’s market cap and its potential sales isn’t as big as it is for many of its competitors. That could also make the company a possible takeover candidate. While that alone is not reason enough to buy the stock, it adds to Flowr’s appeal.

The Flowr Corporation has a 2.5-Leaf Cannabis Quality Rating (CQR). The stock is a speculative buy for aggressive investors who want exposure to the marijuana industry.


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