Flora Growth Completes Acquisition of Vessel Brand, Seeks To Diversify Its Premium Brand Portfolio

Flora Growth Corp. FLGC, a leading all-outdoor cultivator and manufacturer of global cannabis products and brands, announced on Tuesday that it has closed the acquisition of Vessel Brand Inc.

Flora acquired Vessel for $30 million, consisting of a combination of cash and the issuance of Flora common shares.

“We are incredibly excited to welcome the Vessel team into our Company. They are exceptional brand builders with a proven track record of launching brands and capturing market share in the rapidly expanding U.S. cannabis landscape,” said Luis Merchan, resident and CEO of Flora Growth.

“With this acquisition now closed, we can focus on the execution of our combined expansion strategy. The integration of our two organizations is well underway and the Vessel team is expected to substantially enhance the branding and marketing function of Flora Growth as we look to further increase market share in the global cannabis and wellness markets,” Merchan added.

Since its inception in 2018, Vessel’s go-to-market strategy for direct-to-consumer sales in the U.S. and international cannabis markets resulted in rapid revenue growth. Today, Vessel has achieved trailing 12-months revenue of $6.6 million and year-over-year growth of 90%, reported Flora in a press release.

The firm will invest in the expansion of Vessel’s market share in the U.S. and international markets, where Vessel’s established relationships with U.S. multi-state operators and Canadian licensed producers provide an important foothold in the North American cannabis market.

“We are looking forward to formally joining the Flora team and supporting their vision of becoming a global leader in plant-based health and wellness,” said James Choe, founder and CEO of Vessel. “From unrivaled cost-structure to an impressive and expanding brand portfolio, Flora has built a strong foundation for growth which we are now well-positioned to capitalize on in the rapidly expanding cannabis market,” Choe concluded.

Details Of The Transaction

Pursuant to the terms of the definitive agreement, Vessel has merged into a wholly-owned subsidiary of Flora, and Flora has acquired 100% of the equity interests of Vessel for consideration consisting of $8.0 million in cash and 4,557,318 privately issued Flora common shares.

Certain shareholders of Vessel that received in excess of a majority of the Flora common shares issued as part of the transaction consideration have entered into lock-up agreements restricting the transfer of such common shares for a period of six (6) months from the Closing.

Price Action

FLGC traded 1.47% lower, at $4.68 per share, at the time of writing, Tuesday afternoon. 

Photo Courtesy of Lelen Ruete