TORONTO, Jan. 09, 2020 (GLOBE NEWSWIRE) -- Flora Growth Corp. (“Flora” or the “Company”) is pleased to announce that it has entered into a letter of intent (“LOI”) with Latin Canada Pharma Inc. (the “Vendor”) to acquire a 100% equity interest in Grupo Farmaceutico Cronomed S.A.S. (“Cronomed”).
Cronomed is a leading pharmaceutical company headquartered in Bogota, Colombia. Among its extensive line of products, Cronomed produces 16 medical products (including antibiotics, painkillers, anti-inflammatory medications, antihistamines and erectile dysfunction medications), 10 dietary supplement products (including vitamins and essential minerals, weight-loss supplements), 16 nutritional supplement products (including meal replacements, protein powders, collagen powders, sweeteners, hydrating drinks ) and 4 cosmetic products (including sunscreen, topical vitamin ointments and acne treatments)
All of Cronomed’s products are registered and have been approved by the Colombian National Food and Drug Surveillance Institute (INVIMA) (the Colombian equivalent of the FDA in the United States). The INVIMA approval is expected to allow Cronomed to export its products to Latin America and worldwide in an expeditious manner as the INVIMA approval is respected by food and drug agencies worldwide.
Cronomed currently sells its products in Colombia to large distribution network of pharmacies. In 2020, Cronomed plans on expanding its distribution to large supermarket chains, online outlets, and to the Colombian government.
Flora will work with Cronomed’s existing research & development team to explore how Cronomed’s product line can incorporate Flora’s organic-CBD oil to improve the effectiveness of these products.
Damian Lopez, Flora’s CEO, commented: “The acquisition of Cronomed is a significant milestone for Flora. Cronomed is expected to be a significant revenue source for Flora, initially in Colombia and then internationally. There is an untapped opportunity to explore how the inclusion of CBD into medicinal, nutritional and nutraceutical products can enhance their efficacy. Using Cronomed’s existing line of products, we expect to be able to start exploring the infusion of CBD and will start working with the INVIMA to obtain regulatory approval. We believe that Cronomed can deliver tangible results in 2020 and as such, we have structured the transaction in such a way the majority of the purchase price payments are conditional on Cronomed significantly increasing its sales in 2020.”
In order to close the Transaction, Flora must pay to the Vendor:
- On closing of the Transaction an aggregate amount of USD$1,890,000 in cash;
- On such date, which must occur before December 31, 2020, that Cronomed increases its revenue from 2019 by 20%, pay an aggregate amount of USD$2,000,000 in cash; and
- On such date, which must occur before December 31, 2020, that Cronomed increases its revenue from 2019 by 40%, pay an aggregate amount of USD$2,000,000 in cash.
The Transaction is subject to the parties negotiating and entering into a definitive agreement and obtaining of the necessary regulatory approvals.
Flora Growth Corp.
At Flora, we are building the world’s largest and lowest cost vertically-integrated producer of organic cannabis oils, CBD-infused food & beverage, pharmaceutical-grade, medical and cosmetic-grade derivatives from the cannabis plant.
This news release may contain forward-looking statements. These statements include statements regarding the Company’s operations, Cronomed’s operations, the Company’s ability to close the Transaction, the Company’s and Cronomed’s ability to obtain regulatory approvals to infuse CBD into products and the Company’s future plans and objectives. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially. We do not assume any obligation to update any forward-looking statements, except as required by applicable laws.