A Kelowna-based cannabis company has sold its research and development facility to its partner for $16 million.
Flowr and Hawthorne teamed up four years ago to build Canada’s first cannabis research and development facility, with Hawthorne supplying advanced lighting, fertilization and irrigation systems, growing mediums and research protocols. Now Flowr is selling the building, which is called Kelowna Research Station, to Hawthorne in a bid to reach profitability.
Hawthorne will make an initial cash payment of $3 million and the full extinguishment of the principal amount outstanding under the existing loan agreement between Flowr and Hawthorne, which is approximately $12 million. The balance of the $16 million will be paid upon closing.
Hawthorne is a subsidiary of Scots Miracle-Gro, which is the world’s leading marketer of branded consumer lawn and garden products.
“The KRS building and Hawthorne partnership has given us the ability to trial and commercialize exotic and unique cannabis strains, giving us a competitive advantage in the Canadian market,” Flowr CEO Darryl Brooker said in a press release. “Moving forward we will maintain a very close relationship with Hawthorne and will continue to benefit from shared research and development, and the partnership will continue through a service agreement.
“In addition, this transaction further improves Flowr’s balance sheet with the cash proceeds of approximately $4 million and the elimination of $12 million of long-term debt outstanding.”
Flowr is also releasing four new genetics this spring that have been approved in Quebec, Ontario, Alberta and B.C. They are BC Clementine Crush, BC Lemon Ice, BC Spiced Grape and BC Mango Melon OG.