TORONTO, May 14, May 14, 2020 (GLOBE NEWSWIRE via COMTEX) -- -- Flowr enters into a partnership agreement with Terrace Global to develop Flowr's outdoor operations in Aljustrel, Portugal
-- The parties expect Terrace Global to fund at least C$3 million under this Partnership
The Flowr Corporation (tsx.v:FLWR) /zigman2/quotes/205237089/delayed FLWPF -8.32% ("Flowr" or the "Company") announces it has entered into an Equity Line and Profit Sharing Agreement (the "Agreement" or "Partnership") with Terrace Global Inc. (tsx.v:TRCE) ("Terrace Global") a Canadian company focused on the development of international cannabis assets, whereby the two companies will work together to develop finished cannabis products for the European medicinal market. As part of the Partnership and under the terms of the Agreement, Terrace Global has agreed to fund the operations and certain capital expenditures at the Company's outdoor facility located in Aljustrel, Portugal in exchange for common shares and warrants in Flowr to be issued in certain intervals during 2020 and sharing of net proceeds from the sale of any medical cannabis products produced from the facility. The parties expect Terrace Global to fund at least C$3 million under this Partnership.
"We are very pleased to announce this partnership with Terrace Global who bring a great deal of global cannabis industry experience and expertise to the table which will help us further advance our efforts in commercializing our Holigen business as we embark on one of the first large scale outdoor cultivation projects of medicinal cannabis in Europe," said Vinay Tolia, Flowr's Chief Executive Officer. "There is an increased level of comfort in this partnership given prior successful ventures and working relationships with senior leadership of both Terrace Global and Flowr," added Mr. Tolia.
The Partnership allows for both companies to participate in the planting, growing, cultivation, harvesting and production of high-quality medical cannabis. The Agreement contemplates advancing the planting of up to 12 hectares of land at Aljustrel in 2020 to cultivate medicinal cannabis for the European market. The goal of the Partnership is to develop various strains suitable for the European medicinal market and planting mechanisms which will determine the most effective and efficient systems to grow cannabis outdoors in Portugal. Flowr recently exported to Portugal approximately 14,000 clones to support Holigen's 2020 planting season. The cultivars which were shipped include Flowr's flagship strain BC Pink Kush as well as BC Louis XII and BC Tahoe OG, which were strains successfully grown in Flowr's Canadian outdoor operation, Flowr Forest, and which will be launched in the Canadian recreational market soon as new products. All three of these strains have THC content in excess of 20%.
The Agreement provides for the establishment and approval of cultivation plans and operating budgets (collectively, the "Program") to be approved by Flowr and Terrace Global. Once approved, Terrace Global will provide Flowr with the full amount of funds required by such Program. It is expected that the Company will begin initial planting efforts in Aljustrel immediately. The products created under the terms of the Agreement will be sold by Flowr under the Holigen brand in Europe, and Terrace Global will share in 25% of the net proceeds of sales of such product, which percentage may be reduced to 20% in certain circumstances.
The common shares to be issued to Terrace Global in exchange for the funding of the Program will be issued at a price equal to the volume weighted average trading price of the common shares on the day prior to the day of such subscription less the maximum applicable discount available under the rules of the TSX Venture Exchange, subject in all circumstances to a minimum price of $0.52 per common share, as is determined by dividing the amount of the approved budget by such price. In addition, upon issuance of common shares under the Agreement, Terrace Global will be entitled to an equal number of whole warrants, with each warrant being exercisable to purchase one common share for a period of thirty-six (36) months at an exercise price equal to the greater of (a) $0.76 per common share and (b) the minimum exercise price permitted at that time under the rules of the TSX Venture Exchange. The transactions contemplated by the Agreement are subject to the approval of the TSXV.
In addition, Flowr also announced today that 75,000 incentive stock options (the "Options") and 50,000 restricted share units (the "RSUs") have been granted to an officer of the Company. The Options are exercisable at a price of $0.64. The Options and RSUs will vest in equal tranches of thirty-three and one-third percent (33�?"%) over a period of three years.
About The Flowr Corporation
The Flowr Corporation is a Toronto-headquartered cannabis company with operations in Canada, Europe, and Australia. Its Canadian operating campus, located in Kelowna, BC, includes a purpose-built, GMP-designed indoor cultivation facility; an outdoor and greenhouse cultivation site; and a state-of-the-art R&D facility. From this campus, Flowr produces recreational and medicinal products. Internationally, Flowr intends to service the global medical cannabis market through its subsidiary Holigen, which has a license for cannabis cultivation in Portugal and operates GMP licensed facilities in both Portugal and Australia.
Flowr aims to support improving outcomes through responsible cannabis use and, as an established expert in cannabis cultivation, strives to be the brand of choice for consumers and patients seeking the highest-quality craftsmanship and product consistency across a portfolio of differentiated cannabis products.
For more information, please visit flowrcorp.com or follow Flowr on Twitter: @FlowrCanada and LinkedIn: The Flowr Corporation.
About Terrace Global
Terrace is a Canadian company focused on the development and acquisition of international cannabis assets. Its single-minded goal is to unlock value in new jurisdictions. Terrace was created by a group of pioneers in the cannabis space who have come together to build a best in class portfolio of assets, across international markets. With decades of cross-continent relationships, the Terrace team is uniquely positioned to unlock value in new jurisdictions like no one else can.
For more information about Terrace Global, please visit terraceglobal.ca.
On behalf of The Flowr Corporation:
CEO and Director