Flora Growth has entered into a binding Letter of Intent to acquire TruHC pharma GmbH in an all-stock deal in exchange for 2,770,562 Flora common shares, valued at $6.4 million based on the closing price of the Flora Growth shares on March 28, 2024 of $2.31 per share. The first tranche of transaction is expected to close in the second quarter of 2024. Flora's wholly-owned subsidiaries have been active in Germany since 2017, obtained the first medical cannabis license in Germany and are responsible for selling the first gram of medical cannabis in the country. "With its acquisition of TruHC, Flora cements its position at the forefront of this historic German and European cannabis opportunity. The acquisition brings an already successful partnership between Flora and TruHC under the Flora brand, providing the potential to unlock greater economic value from future distribution in Germany and Europe. The combined company will leverage TruHC's extensive German network and best-in-class EU-GMP production facility to become the preeminent German supplier of cannabis products," the company says.
"TruHC is purpose built for this moment"
- Based in Hamburg, Germany, TruHC holds a GDP wholesale, and an EU-GMP processing and production license for medical cannabis. It also owns and operates an EU-GMP certified laboratory ready for instant cannabis analysis as required for the new Cannabis Social Clubs.
- The facility of TruHC is a flexible production space with EU-GMP certified modules that can be extended and customized for any production process from processing to extraction and enables a license extension for a future in country cultivation of medical cannabis and supply of cannabis dispensaries expected to be opened in 2025 during phase 3 of legalization. TruHC also holds a narcotic license with EU-GMP certified storage.
- TruHC's licenses were obtained with Germany's forthcoming legalization in mind. They allow TruHC to apply for new medical cannabis & cultivation licenses and become an official cannabis test lab for upcoming cannabis social clubs. It also enables extensive international import of seeds and flowers for future distribution in what is expected to become the largest federally legal recreational cannabis market in the world.
- TruHC's executive team, led by CEO Hendrik Knopp, brings proven leadership in international cannabis operations, manufacturing, facilities buildouts, and license acquisition, including winning the first tender for the cultivation of medical cannabis in Germany for Tilray (formerly Aphria). The TruHC team has held senior leadership positions at Nuuvera and Tilray (formerly Aphria) and made significant foundational private equity investments in leading U.S., Canadian and European cannabis operators.
"The acquisition of TruHC is expected to provide Flora with the runway it needs to maximize the benefits of Germany's cannabis legislation. We intend to touch on many verticals in the medical and recreational cannabis realms in Germany. We anticipate becoming a leader and at the forefront of the industry, which has the potential to spread to the rest of Europe. TruHC brings an EU-GMP facility and a management team that pioneered the cannabis industry in Germany to the Flora family. Together, we are excited to assume pack leadership in a sector poised for explosive growth," said Clifford Starke, Chief Executive Officer.
"This transaction marks the culmination of months of close cooperation and strategic planning. By joining forces, we have created a leader in German cannabis at a uniquely opportune time," said Hendrik Knopp, Chief Executive Officer of TruHC.
For more information:
Flora Growth
www.floragrowth.com