Cannabis Investments Colombia

Austin Willson September 15, 2021

Colombian President Ivan Duque made headlines in July when he signed a directive allowing the export of dried cannabis flower from his country, among numerous other changes, that opened up the Colombian cannabis industry. This change has positioned Colombia as a prime supplier to what may become a global market for cannabis if cannabis lobbyists in the European Union and the United States have anything to say about it.

Many cannabis companies are looking at globalization in the cannabis space as an inevitability and are preparing their supply chain and brand portfolio to capitalize on this emerging sector. One such company is Flora Growth Corp. (NASDAQ: FLGC). Flora Growth was one of the first cannabis companies to go public via a direct initial public offering (IPO) on the Nasdaq Stock Market earlier this year.

Looking to become a global cannabis supplier with its own portfolio of brands ranging from medical cannabis to hemp textiles, Flora has focused on achieving low-cost cultivation to increase its supply-chain value while expanding its global distribution network.

Flora Growth’s main cultivation and extraction facility is in Colombia, allowing it to benefit from the region’s prime geographic location and climate for growing cannabis as well as low labor costs. This combination has allowed Flora Growth to keep its cultivation per gram at a price 60% less than its nearest competitor — $0.06 per gram.

Its Colombian cultivation facility also has given it the opportunity to become an international supplier not only for its own brands but for other companies as well. In September, Flora Growth announced that it had received a commercial export quota from the Colombian Technical Quotas Group of 7,900 kilograms of high-THC dried cannabis flower.

High-THC cannabis is a high-margin product for Flora Growth and, according to company management, “will be sufficient to meet the international demand for Flora’s product for the remainder of 2021 and at the onset of 2022.” This exporting power gives the company a large first-mover advantage in the new Colombian export market as one of the first exporters of natural Colombian-grown cannabis.

Looking Across the Atlantic

However, Flora Growth has had its eyes on the global cannabis market for some time now. Earlier in 2021, the company announced a $2 million equity investment in Hoshi International Inc., which will give Flora a direct supply gateway into the European cannabis market.

Flora didn’t stop there though, the company signed a letter of intent with Australian distributor Evergreen Pharmacare in July to supply the distributor with Flora’s dried cannabis flower and derivatives. Evergreen works with patients and healthcare practitioners, primarily physicians and pharmacists, to provide medical cannabis products and to educate about the authorization and use of medical cannabis. Evergreen expands Flora’s global reach and gives Flora Growth a gateway into the Australian and the APAC medical cannabis markets.

Flora Growth is exploring opportunities with distributors in other countries to further expand its global reach. Undoubtedly, the recent export quota granted to Flora Growth from the Colombian government and the general push toward legalization worldwide is a positive trend for the company as it looks to supplant itself as a global supplier of natural outdoor-grown cannabis.

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