Flora Growth acquires JustCBD for $33 million in cash and stock – New Cannabis Ventures
Flora Growth Completes Acquisition of Category-Leading Wellness Brand JustCBD; Improves US infrastructure and CPG portfolio
- JustCBD is an established CPG brand with a portfolio of over 300 products and a seamless omnichannel approach that includes a direct-to-consumer business with over 300,000 customers and a network of over 14,000 stores in the US and internationally. .
- JustCBD generated audited revenues of US$28 million and EBITDA of US$7 million in fiscal year 2020 across multiple categories including gummies, tinctures, vape cartridges, creams, well -be pets, among others, which we believe have significant long-term growth. potential.
- The acquisition is expected to improve Flora’s infrastructure in the United States with the widespread distribution of JustCBD on mainstream US chains and its production facility in Fort Lauderdale, Florida.
- Flora will host a webinar with JustCBD CEO Hussein Rakine, Flora CEO Luis Merchan and Chief Strategy Officer James Choe on March 2 at 1pm ET where they will outline the accretive nature of the acquisition. Register here.
MIAMI and TORONTO, February 28, 2022–(BUSINESS WIRE)–Flora Growth Corp. (NASDAQ: FLGC) (“Flora” or the “Company”), a leading cultivator and manufacturer of global cannabis products and brands, today announced that it has acquired a 100% equity interest in Just Brands LLC (“Just Brands”) and High Roller Private Label LLC (“High Roller”) for cash consideration of US$16.0 million and 9.5 million privately issued common shares of Flora, subject to some potential future adjustments. Just Brands and High Roller are the owners of the JustCBD brand and related operations (collectively “JustCBD”).
- Should accelerate revenue and profit growth: Flora expects JustCBD’s financial performance to immediately contribute to Flora’s revenue and earnings in 2022.
- Early creation of significant distribution synergies in the United States: Flora intends to leverage synergies between its existing portfolio of brands, including Vessel, Tonino Lamborghini and Mind Naturals, with JustCBD’s extensive US distribution network to further amplify the revenue growth of these brands.
- Should offer opportunities for global expansion: To date, the majority of JustCBD’s sales come from the US wellness market, where it has become a top and highly sought-after brand. With the support of Flora’s strong balance sheet, we believe JustCBD is now positioned to expand into international markets where CBD products are permitted, including Germany, Mexico and Colombia.
- Increases the customer database: JustCBD’s database of over 300,000 customers increases Flora’s existing customer base to over 500,000 customers.
- Adds exceptional human capital: Members of the JustCBD operations team are expected to join the Flora team as integral leaders of Flora’s US expansion strategy. This includes JustCBD CEO Hussein Rakine, who was named to the 2022 Forbes 30 Under 30 list for retail and e-commerce.
- Potential for long-term supply chain efficiencies: Flora will explore integrating its supply chain using CBD oils and isolates from its Cosechemos culture with JustCBD products to leverage its own cost-advantaged culture to reduce the cost of goods.
We are delighted to announce this news today and welcome the JustCBD team to Flora. Building such a recognizable brand in this noisy and fast-growing market is a testament to everyone at JustCBD. This acquisition continues to strengthen Flora’s presence in the US wellness market, while providing significant growth acceleration and providing human capital to the Flora organization.
Luis Merchan, CEO of Flora
Additionally, there is an incredible opportunity to leverage our cost-effective culture to support the expansion of the JustCBD brand into the global market.
For additional information on the terms of the transaction and to obtain a copy of the acquisition agreement, please refer to the report on Form 6-K filed on February 28, 2022 by Flora with the United States Securities and Exchange Commission -United.
About JustCBD Operations
Founded in 2017, JustCBD has quickly become a market leader in consumable cannabinoids. JustCBD’s operations consist of a manufacturing facility and distribution center located in Fort Lauderdale, Florida. Products in the brand portfolio include an assortment of gummies, tinctures, vape cartridges, creams, among others. As part of its commitment to product quality, JustCBD also offers third-party testing for all products on its website and offers consumers a 30-day satisfaction guarantee.
“Our team is incredibly excited to join Flora and rapidly expand JustCBD’s presence in new markets with new growth capital and an established international presence,” said Hussein Rakine, CEO of JustCBD. “From the beginning, we have worked hard to build JustCBD into a leading wellness brand in a hyper-growth space by delivering consistent experiences that have built customer loyalty. By combining our product portfolio with that of Flora, we believe we have an industry-leading wellness offering that will delight our existing customers and attract new ones as we reach new markets.
Roth Capital Partners acted as exclusive financial advisor to Just Brands on the transaction.
About the Flora / JustCBD Webinar
Flora will host a webinar with JustCBD CEO Hussein Rakine, Flora CEO Luis Merchan and Chief Strategy Officer James Choe on March 2 at 1pm ET where they will outline the accretive nature of the acquisition. Register here.
About Flora Growth Corp.
Flora is building a connected, design-driven collective of plant-based wellness and lifestyle brands, designed to deliver one of the world’s most compelling customer experiences, one community at a time. As operator of one of the largest outdoor cannabis cultivation facilities, Flora relies on natural and cost-effective cultivation practices to supply cannabis derivatives to its various business divisions of cosmetics, hemp and food and beverages. Visit www.floragrowth.com or follow @floragrowthcorp on social media [media] for more information.
original press release
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