Flora Growth Joint Venture With Avaria To Bring KaLaya CBD Pain Relief Cream To LATAM Cannabis Dispensaries

Flora Growth Corp. FLGC seeks to create a joint venture with Avaria Inc, a Canadian-based producer and the owner of KaLaya – a popular pain relief cream sold across Canada.

The Miami-based cannabis producer confirmed Tuesday it has signed a non-binding letter of intent to create a joint venture, through which it will handle registration, sales and distribution of KaLaya products in Colombia, Mexico and other Latin American countries.

The news comes on the heels of the company's recent partnership with distributor Tropi with the goal of reaching Colombian consumers. The deal is estimated to generate up to $10 million in annual sales.

Joint Venture Details 

Under the deal, Avaria agrees to supply completed products to the joint venture, while profits from sales will be divided equally among the two parties. The joint venture arrangement will advance the value of Flora’s current distribution channels.

What’s more, Flora Lab will use the cannabis grown at Flora’s facility to manufacture KaLaya’s CBD-infused products, which will be distributed across Latin America using Flora Labs distribution channels with the aim of exporting them to the U.S. market where Avaria is presently rolling out its KaLaya brand. Avaria is not licensed to manufacture cannabis-derived versions of its products at a commercial scale.

KaLaya pain cream brand enjoyed triple-digit growth for three years in a row and was awarded TSC’s number one wellness brand in 2020. It is also the number one ranked topical analgesic brand throughout Purity Life.

“We are very excited to partner with Avaria to bring their established, award-winning KaLaya brand to our LATAM distribution network,” Flora Growth president and CEO, Luis Merchan said. “We believe the product will receive a similarly strong reception as it has in Canada. Moving forward, Flora Lab will work with the Avaria team to produce CBD-infused versions of KaLaya products for distribution across LATAM as well as export into the United States. Given CBD’s association with wellness, KaLaya’s established formulation, and Flora Growth’s low-cost high-quality cannabis, this is a natural partnership we are excited to bring globally.”

Price Action 

Flora Growth’s shares were trading 10.40% lower at $4.05 during Tuesday’s pre-market session.

Photo: Courtesy of Diyahna Lewis on Unsplash