On September 16, 2021, Flora Growth Corp. (NASDAQ: FLGC) announced it has signed a Letter of Intent with international importer and distributor Robust Farms Inc.
The letter states that Flora will work to provide the Panama-based company with cannabinoid-containing food and beverages through its Kasa Wholefoods division.
Panama Goes Legal
This partnership was made possible through the passage of Bill 153 on August 30, 2021, by Panama’s National Legislative Assembly. The bill legalizes the use of medical cannabis and creates a regulatory framework to monitor and control access.
Patients that have been authorized, based on specific clinical indications, will have the right to access medical cannabis products through licensed pharmacies. Those pharmacies will be responsible for the distribution of medical cannabis products and will need to apply for a permit and pass a site inspection. Permits will initially be valid for up to two years.
Only seven licenses for the manufacturing of cannabis seeds, plants, and derivatives will be granted to those looking to operate domestic production, and there is no provision for at-home cultivation.
It’s expected that Panama will become the first country in Central America to regulate the use of medical cannabis, however, the new regulations must be approved by President Laurentino Cortizo.
Serve Local, Grow Global
Flora Growth is focused on the balance between international partnerships and serving local communities and feels this differentiates itself from its peers, particularly in Colombia.
The company seeks to prioritize the protection of the earth and its resources by considering its global impact before acting on a local level to enact positive connections to the communities it inhabits.
With regard to its new partnership in Panama, President and CEO Luis Merchan said “It’s important to recognize the continued trend of medical and adult-use cannabis legalization sweeping across the globe. Governments are increasingly recognizing its therapeutic properties, and want to control, regulate and tax these products to foster economic prosperity, as well as bring significant reform in civil rights and criminal justice.”
“We [Flora Growth Corp.] applaud the efforts of Panamanian legislators and advocacy groups to push forward this initiative. Ultimately, it will help provide options for patients who are looking to improve their quality of life by utilizing emerging cannabinoid therapeutic treatments. We look forward to working with local partners to provide our cannabis products to the citizens of Panama.”
Leveraging 6 Cents per Gram to Enter the Global Market
Flora Growth feels well-positioned to continue expanding into global markets with the recent Colombian law change that permits the export of dried cannabis for medical purposes among other positive changes.
With robust infrastructure, access to skilled agricultural labor, and a strong distribution network already in place, Flora Growth is set up for exports of cannabis products to do very well worldwide.
The law prohibiting exports of dried cannabis flower was seen as a barrier to further growth for the country’s cannabis industry and stunted global cannabis markets as well. When lifted in August, while several companies jumped at the opportunity, few were strategically ready to make moves right away. Flora Growth Corp. is among those few.
With the ability to grow at 6 cents per gram, Flora Growth can leverage its natural, low-cost cultivation practices to supply cannabis derivatives to its diverse business divisions and might be able to have better margins than other large-scale operators like Tilray (NASDAQ: TLRY) and Cresco Labs (OTCMKTS: CRLBF).
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