- The stock price of Flora Growth Corp (NASDAQ: FLGC) increased by over 25% pre-market. This is why it happened.
The stock price of Flora Growth Corp (NASDAQ: FLGC) – a leading all-outdoor cultivator and manufacturer of global cannabis products and brands – increased by over 25% pre-market. Investors are responding positively to Flora Growth announcing that it has entered into a non-binding Letter of Intent (LOI) with Evergreen Pharmacare Pty Ltd., a licensed Australian importer and distributor of medical cannabis products, to supply its premium dried flower and derivative products. Flora Growth expects to ship its medical-grade cannabis products upon completion of its first commercial harvest and obtaining necessary export licenses.
Data firm FreshLeaf Analytics is forecasting the Australian medical cannabis market to surpass AU$200 million in 2021 and notes strong patient growth metrics by a factor of 15x over the past 2 years. And Prohibition Partners estimates that the Australian medical cannabis market could reach $1.5 billion by 2025.
Evergreen is working 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. And Evergreen was born out of necessity for its patients to have quicker access to premium, affordable, AUGMP-certified medication via the Special Access Scheme (SAS) Category B application pathway.
FreshLeaf estimates the pharmacist-only CBD market in Australia will grow to AU$250 million in product sales at market maturity, thus capturing around 2 million consumers and also expects that many existing medical cannabis patients will migrate to the pharmacy channel once low-dose CBD products become available over-the-counter. Currently, about 1-in-4 medicinal cannabis patients take a CBD product at a daily dose below 150mg, spending an average of $8.02 per day or about AU$29 million annually (based on the current medical patient metrics).
“We are absolutely thrilled to enter into this agreement with Flora and to provide Australian cannabis patients with access to premium medical-grade cannabis products at a more affordable price point than ever before due to Flora’s strategic low-cost cultivation and processing operations, as well as their global logistics expertise. Additionally, we were very encouraged by the recent decision from the Therapeutic Goods Administration to provide a new product pathway for cannabidiol (“CBD”) to be sold over-the-counter without a prescription. Pharmacy is a natural progression where you can have medical practitioner oversight for patients consuming it for health, while also addressing the accessibility issue seen in other global jurisdictions.”
— Tristan Hyodo, Chairman of Evergreen
“The agreement with Evergreen will allow us to establish a local partner in Australia while generating incremental revenue from our Colombian cannabis facility and as legislation evolves within Australia. This agreement also provides significant potential upside by allowing us to work with Australian regulators directly and bring our premium brands and established product formulations to the over-the-counter CBD market. Down-scheduling CBD fits well with Flora’s long-term consumer product strategy of providing proven cannabinoid wellness and beauty products to consumers around the world and we are excited to work with our partners on this new opportunity.”
— Jason Warnock, Chief Revenue Officer of Flora Growth
Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.