Flowr To Raise Up to $15 Million with Substantial Insider Participation to Fund Portugal Project

Flowr Provides Corporate Update

Announces C$15 Million Private Placement Led By Management and the Board;Adds Seasoned Board Member, Don Duet, and Head of Capital Markets, Thierry Elmaleh

Toronto, Ontario, April 29, 2019 (GLOBE NEWSWIRE) — The Flowr Corporation (TSX.V: FLWR; OTC: FLWPF) (“Flowr” or the “Company”), a Canadian Licensed Producer and global leader in premium cannabis R&D and innovation, today provided a corporate update on various matters. Details are as follows:

Flowr intends to complete a non-brokered private placement of up to 2,400,000 common shares of Flowr at a price of C$6.25 per common share for aggregate gross proceeds of up to C$15 million (the “Private Placement”).

The Company expects to use the proceeds of the Private Placement for general working capital purposes, including for the funding of construction of certain operations of Holigen Holdings Limited (“Holigen”). Holigen is a European-based cannabis company in the process of developing large-scale GMP-compliant cultivation facilities in Portugal and Australia that are expected to provide medical cannabis products, ingredients, and plants and seeds to markets globally.

Investors participating in the Private Placement, and investing an aggregate of approximately C$3,600,000, include Flowr CEO Vinay Tolia, Chairman, Steve Klein, through Core Flow Canada Holdings Inc. (“Core Flow”), as well as individual members of Flowr’s Board of Directors (“Board”), including new Board member Don Duet. The participation of Flowr’s senior management team and Board members demonstrates their long-term commitment to Flowr’s corporate strategy and business model. Closing of the Private Placement is expected to occur on or about May 10, 2019, but is at the discretion of the Company (the “Closing Date”). The Company will announce the outcome of the Private Placement after closing in a subsequent press release. As of the date of this press release, management and Board members currently own or exercise control over 60% of the securities interests of Flowr (taking into account the Company’s 87,045,352 issued and outstanding common shares and 43,950,000 securities held by certain shareholders in a subsidiary of the Company that are convertible into common shares of Flowr for no additional consideration).

Through leading each round of financing for the Company, Core Flow has a strong conviction in Flowr’s edge in designing and constructing highly efficient facilities and producing high quality cannabis products. Moreover, Flowr is building a company, from its management team to cultivators, that I believe is second to none.

Steve Klein, Co-Founder and Chairman

Pricing of the Private Placement was determined by the Board based on the closing price for the common shares on the date prior to announcement of the Private Placement and in compliance with regulatory policies. All common shares issued under the Private Placement will be delivered from Canada and are subject to a hold period expiring four months and one day from the Closing Date.

The Private Placement is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.

The common shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Holigen Investment


Through its investment, Flowr is supporting Holigen’s proposed €45 million investment in Portugal to produce medicinal cannabis outdoors and generate 200 jobs over the next four years. Holigen’s first installation in Portugal is under construction in Sintra, with 21,500 square feet for cultivation, processing, GMP manufacturing and R&D operations. Holigen has been granted a cultivation license for its Sintra indoor facility which now has mother plants growing and in development. In addition, the GMP extraction and packaging areas in the Sintra facility have been completed and the extraction equipment is in place and undergoing testing. The GMP manufacturing inspection for Sintra’s indoor facility is scheduled and expected to occur in June 2019.

In addition, this year, Holigen expects to initiate the installation of one of the largest outdoor cannabis cultivation facilities for cannabis sativa (THC) in the world in Aljustrel, Portugal, which will have a combined production, transformation and R&D area of more than 7,000,000 square feet. Holigen’s Aljustrel site is now security fenced and is expected to be ready for inspection by the Portuguese authorities in May 2019. This project has been designated a Project of National Interest by the Portuguese government, which ensures special handling and prioritization by government agencies and access to low cost financing.


In Australia, Holigen has been licensed by the Office of Drug Control (ODC) to cultivate and manufacture medicinal cannabis products, and was granted Good Manufacturing Practice (GMP) by the Therapeutic Goods Administration for labelling, secondary packaging and release for supply in November 2018. Holigen is on track to have its full manufacturing facility in Australia inspected to Good Manufacturing Practice (GMP) later this year.

Subject to available financing, Phase 1 construction at the Australian facility is expected to be finalized in the second half of this year in preparation for an ODC inspection, and Phase 2 construction is expected be completed by August 2019. Upon completion of construction, inspections, permitting and licensing, Holigen expects to start manufacturing in Australia by the end of this year.

As Holigen continues to progress through its licensing process in Portugal and Australia, it has also been granted cannabis clone import permits from Flowr as well as seed, tissue culture and seedling import permits in Europe and Australia.

Holigen, through partnerships it has and is developing, has access to pharmaceutical distribution in over 35 countries across Europe and the southern hemisphere (excluding South America), including a distribution partner that has approximately 170 client wholesale and distribution outlets and is experienced in international importing and exporting of certain medicines.

Holigen also has a highly skilled team in place with extensive experience in the pharmaceutical, distribution and construction industry, including senior engineers in the opiate industry (cultivation and extraction), senior GMP specialists, senior regulatory pharmacists experienced in dealing with European regulations and pharmacopeia, and senior construction executives.

Further to the announcement made by the Company on December 20, 2018, Flowr is in the process of closing its 19.8% interest in Holigen and is evaluating a further acquisition and/or investment into Holigen. The Company provides no assurances that a transaction with Holigen will be completed as proposed or at all.

Board and Management Update

Flowr also announced changes to its Board of Directors and the addition of Thierry Elmaleh, as Head of Capital Markets.

Current Board member Rishi Shah has stepped down as Lead Independent Director, and current Board member Karen Basian will replace him in the role. Don Duet, former Partner, Head of Global Technology Division, Goldman Sachs, will be filling Mr. Shah’s Board seat, and will join the Audit Committee, Nominating and Corporate Governance Committee and Human Resources and Compensation Committee, the latter of which he will Chair. Additionally, Tom Flow has decided to transition from his role as Co-CEO and Board member to the position of Founder and Managing Partner, enabling him to better focus his time on Flowr’s operations (including the ramp up of Holigen’s business), as the Company continues to focus on scaling its operations globally.

“I can speak for the entire Board of Directors in expressing our gratitude to Rishi and Tom for their many valuable contributions to our company’s governance. We believe that Don’s appointment highlights our continued focus on governance and assembling a Board with diverse skillsets. We are also excited to have Tom back in a role that better utilizes his passion and expertise on our global operational initiatives, as we pursue our goal of growing cannabis of the highest possible quality,” said Mr. Tolia.

Mr. Tolia continued, “with the addition of Thierry on our team, we also believe we are well positioned to continue executing on our capital markets strategy, as Flowr grows and gains additional exposure to the investment community.”

About New Board Member and Head of Capital Markets

Don Duet – Over his nearly 30-year career at Goldman Sachs, Mr. Duet ran the bank’s Technology Division, helping lead investments in emerging companies including Square, Docker and Barefoot Networks. Mr. Duet currently serves as Senior Advisor to McKinsey & Company and as an Advisory Board Member to Centana Growth Partners, a growth equity firm. He graduated from Marist College with a degree in Computer Science.

Thierry Elmaleh – Mr. Elmaleh brings 15 years of progressively more senior leadership experience in capital markets to Flowr. Most recently, Mr. Elmaleh was a Managing Director in the Trading Products division at BMO Capital Markets, which was the first Canadian Schedule 1 Bank to provide investment banking services to the cannabis sector. Prior to joining BMO, Mr. Elmaleh led the buildout of Susquehanna’s US equity and derivatives business in Canada, was a Vice President in Institutional Equity Sales at Bank of America Merrill Lynch & began his career as an investment banking analyst at TD Securities. Mr. Elmaleh has an MBA from the Rotman School of Management at the University of Toronto and a BA in Economics from McGill University.

Grant of Equity IncentivesIn addition, Flowr also announced today that the Board has approved the granting of an aggregate of 615,000 incentive stock options (the “Options”) and aggregate of 100,000 restricted share units (the “RSUs”) to certain officers of the Company. The Options are exercisable at a price of CAD$5.93 per share for a period of five years. The Options will vest either: (i) in equal proportion on a monthly basis over a period of thirty-six months, with the first monthly vesting to occur on March 31, 2019, with each subsequent vesting to occur on each of the following thirty-five (35) subsequent one (1) month anniversaries of that date; or (ii) as to thirty-three and one-third percent (33⅓%) on each anniversary of the date of commencement of employment for the applicable officer. The RSUs will vest as to thirty-three and one-third percent (33⅓%) on each anniversary of the date of commencement of employment for the applicable officer.

About The Flowr Corporation

Flowr, through its subsidiaries, holds a cannabis production and sales license granted by Health Canada. With a head office in Toronto and a production facility in Kelowna, BC, Flowr builds and operates large-scale, GMP-designed cultivation facilities utilizing its own growing systems. Flowr’s investment in research and development along with its sense of craftsmanship and a spirit of innovation is expected to enable it to provide premium-quality cannabis that appeals to the adult-use recreational market and addresses specific patient needs in the medicinal market.

For more information, visit www.flowr.ca. Follow Flowr on Twitter: @FlowrCanada; Facebook: Flowr Canada; Instagram: @flowrcanada; and LinkedIn: The Flowr Corporation.

Original press release

Published by NCV Newswire
NCV Newswire
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