Flora Growth Corp (FLGC) Forms JV With Avaria Health and Beauty to Distribute Award-Winning Pain Products Across LATAM

November 26, 2021 7:07 AM EST

Get instant alerts when news breaks on your stocks. Claim your 1-week free trial to StreetInsider Premium here.

Flora Growth Corp. (NASDAQ: FLGC) (“Flora” or the “Company”), a leading all-outdoor cultivator and manufacturer of global cannabis products and brands, is pleased to announce it has entered into a definitive agreement with Canada-based Avaria Health & Beauty Corp. (“Avaria”) to form FloVaria Corp. (“FloVaria”), a joint venture company equally owned by Flora and Avaria.

Through FloVaria, Flora will provide distribution, supply chain, and marketing support of KaLaya products in Colombia, Mexico, and other LATAM countries, while Avaria will initially supply the finished product to FloVaria. In the event that manufacturing costs from Canada become materially higher than the cost to produce in Colombia, FloVaria will explore moving its supply chain activities of Avaria products to Flora Lab. Any profits from the sale of KaLaya products via FloVaria will be divided equally between Flora and Avaria, increasing the value of Flora’s existing distribution channels.

Further, Flora Lab will work to produce FloVaria’s cannabinoid-infused products, with an emphasis on incorporating cannabidiol (“CBD”), using cannabis from Flora’s cultivation facility. These products are expected to be distributed across LATAM using Flora Lab’s established distribution channels, with the goal of exporting to the U.S. market, where Avaria recently launched its KaLaya brand and has seen encouraging sales metrics.

“Since our initial meeting with Avaria, we were impressed by their commitment to research, product development, and most importantly, providing customers with products that work,” said Luis Merchan, President and CEO of Flora Growth. “Avaria has achieved impressive and continued growth of its KaLaya brand based on the quality and efficacy of the product. Our team is very excited to bring their award-winning topical pain products to our LATAM distribution network, and to produce cannabinoid-infused KaLaya products at Flora Lab.”

“We believe that KaLaya products provide the best relief that you can get without a prescription,” said Dr. Keith Burk, M.D., founder and CEO of Avaria. “Our KaLaya pain cream brand has enjoyed strong success since inception and has garnered much consumer praise while receiving numerous industry awards. We’re incredibly excited to partner with Flora Growth to bring our award-winning KaLaya products to new international markets, and moreover, to produce cannabinoid-infused versions of these already established and highly efficacious products that our consumers have been demanding and looking forward to for some time now.”

KaLaya Observational Study on Pain Relief

A perception study with 48 volunteers was conducted by Avaria at Beechwood Clinic in Waterloo, Ontario, in 2019. These patients had acute and/or chronic medical conditions including arthritis, tendonitis, and joint pain, among others, and were asked to evaluate their experience of pain relief after application of KaLaya’s 6x Extra Strength Pain Relief.

The results showed that all volunteers felt improvement in pain or were free of pain within two minutes of application of K6XPR, where 52.1% felt pain relief within one minute. The average reduction in pain is 5 points on a 1-10 point pain score. Results indicate that K6XPR is an effective and efficient topical pain treatment for a variety of acute and chronic pain conditions.

About Flora Growth’s Recent Financing

Having received net proceeds of $31.5M from the recent closing of Flora’s public offering, the Company is well funded for growth as it continues to execute on its business initiatives including an expansion into the U.S. CBD market, a growth investment into recently acquired Vessel Brand, and an expansion into the newly legalized German adult-use cannabis market.

“Since our IPO in May of 2021, we have made substantial progress to expand our distribution network, launched new brands and brand partnerships, and closed or advanced multiple transactions. Looking forward, we expect to use this capital to amplify revenue growth from our operating divisions, identify and acquire new accretive M&A targets, and enter new markets like Germany’s newly formed adult-use cannabis market as legalization developments continue to unfold internationally,” commented Luis Merchan, Flora’s CEO.

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In

Related Categories

Corporate News, Management Comments

Related Entities

Definitive Agreement, IPO