Flora Growth Corp. Becomes The First Plant-Touching Company to NASDAQ IPO Without a SPAC, RTO or Dual Listing: Exclusive Interview With Luis Merchan, CEO of Flora Growth

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AUTHOR: Heather Allman




Flora Growth Corp. made an IPO on May 11


The First Plant-Touching Company to NASDAQ IPO Without a SPAC, RTO or Dual Listing


Flora grows cannabis for US $0.06/gram – one of the lowest costs in the world.

With offerings spanning across the food, pharmaceutical drug, clothing, and beauty industries, and a global distribution capacity including operations in the US, Canada and 2,500 distribution points across Latin America.



Determined to prove they are the true global cannabis player, on May 11 this morning, Colombia-based Flora Growth Corp. (NASDAQ: FLGC), launched a U.S.-based IPO and became the first-ever cultivator to list on the NASDAQ without using a SPAC, reverse merger or dual listing (the first “front door” NASDAQ IPO) and the first all-outdoor grower ever listed on the NASDAQ.

Flora also has the largest cultivation licensed for production in Colombia.


  • Global Distribution: Currently operating in the Americas and expanding to Europe and the Asia-Pacific region by 2022

  • Bankers: Boustead Securities, Cantor Fitzgerald and MKM Partners

  • Capital Raises: Pre-IPO US$30M raise, US$15M IPO raise

  • Share Price: $5.00 per share


Competitive Advantages: 

  • Brought on 10,600 shareholders through a pre-IPO raise, making Flora a holder of one of the broadest shareholder bases in cannabis ahead of a NASDAQ listing.


  • Flora has a 60% lower growing cost than their largest competitors.


  • Distribution level — Over 250 Flora products are already being distributed across 2,500 distribution points across Latin America.



In his May 17, 2021, exclusive interview with Cannabis Law Report, Flora Growth Corp.’s CEO, Luis Merchan, discussed the company’s one of this fast-moving company’s latest exciting announcements, the importance —and industry need— for all-outdoor growth practices, and Flora’s sustainability goals for the rest of 2021 and looking forward.

Luis Merchan, CEO of Flora Growth Corp


Cannabis Law Report: We’re here to talk about your first plant touching company to NASDAQ IPO without a lot of other affiliations, but please start out by introducing yourself and telling us a little bit of background about Flora Growth. 

Luis Merchan: Of course, it is good to be here. First of all, a little bit about myself. My name is Luis Merchan, I’m the president and CEO of Flora Growth Corp, and a dual citizen from Colombia and the United States. 

I’ve spent the last 20 years in the US; I came here to get my graduate studies and have worked in retail and CPG for the majority of my corporate career, for a number of very well recognized companies, such as Target and Macy’s. 

At Macy’s, which was the latest company before I joined Flora Growth, I had high level corporate jobs, including leading the sales organization for Macy’s and being responsible for $3.6 billion in revenues across 140 stores in the United States. 

Then the last job that I’ll highlight for you at Macy’s was ‘Workforce Management and Strategy,’ where I was responsible for customer experience for the company, as well as the allocation of capital across the entire organization —which was about a $2.5 million responsibility for the company. 

I joined Flora Growth almost a year ago, on July 1, 2020, as President of Consumer Goods. Flora Growth is a company that was founded in 2019, and with two major competitive advantages and foundational strategies.

The first one was to ensure that the company developed a full scale, outdoor organic cultivation facility out of Colombia.

The second one was to develop a diversified portfolio of brands and products that could get to consumers worldwide. 

The company has done a good job growing those two strategies, and of course, it reached a significant milestone last week when we IPO’d on NASDAQ.


CLR: I read your news about Flora’s new expansion into the UK. Is that correct?

Luis: That is correct. We have over seven brands, and over 300 products that we have developed already. Those products have been generating revenues since the latter part of last year. So we were, for the most part, a pre-revenue company in 2020. Our revenues have significantly improved, of course, over the course of 2021.

Now, we’re expanding our distribution network and our geographies worldwide. Just a few days ago, we announced the exports of some of our food and beverage brands into the Costa Rica markets, which will also enter Central America.

We also announced that some of our skincare and food and beverage products will be exported into the UK.


CLR: I see that you have some plans for flower export eventually, as well?

Luis: I think if you’re starting to follow our company, we tend to do everything at 10 times the speed of everyone else. We did a $30 million pre-IPO equity raise last year that left us with about 85% of the US consumer base.

That signaled to us that the investor community in the US was very open into investing in projects, and that’s when we pursued the NASDAQ IPO. But also, the Colombian environment and the law regulations in the regulatory environment in Colombia are currently very favorable. 

In fact, there is an amendment to the law, that is coming into place any day now, that will allow for the export of dry flower into markets worldwide. We expect that to come in line for us at the latter part of 2021. 

That’s certainly the goal that we’re working towards. We look forward to being the first company from Colombia that will complete exports into international markets for flower.


CLR: I appreciate the timeline. I think moving fast paced, especially in this space, is the way that you have to operate, because cannabis moves fast every day.

Luis: I completely agree and we obviously came into the industry a few years after the first significant Green Rush, and that was, we considered, our competitive advantage: because we were able to learn from the mistakes from the early adopters in terms of how to spend your capital, and how to move quickly to the very challenging regulatory environment. As a result, we have been able to do that. 

But on the other side of this equation, the few companies that that do are able to overcome all these regulatory obstacles, receive all their licenses, achieve organic certifications and new GMP certifications — they’re going to be able to take a big chunk of the market share worldwide, which, as you know, is massive.


CLR: Yes. As I always say, cannabis is global. This is not relegated to any country; this is a truly global endeavor that’s happening across the globe. Let’s talk a little bit about that. How many jurisdictions are you operating in outside the USA and Canada?

Luis: Currently, two continents, and there’s a number of countries in which we’re selling our products. We have a tremendous expansion plan, with our sites aimed into the APEC region, as well as the European Union, for a number of reasons that you’re fully aware of: the global cannabis market is estimated at $250 billion.

I’m fully aligned with your ‘global cannabis’ assessment, and that’s our strategy in our company. We have one market play, it’s a global global play, and you need to make sure that you have a strong, robust plan to expand infrastructure. 

That’s the reason, by the way, why we IPO’d on NASDAQ: this capital race is now giving us the opportunity to execute on a strategy that we have built over time. A strategy that will allow us to reach these markets in a very short amount of time. 

So there’s really great news coming in the next weeks and months for Flora Growth. And, of course, that will also follow our robust fundamentals in terms of revenue generation and reach ritual.


CLR: I do want to get to some of the monetary issues, but since we’re talking about the IPO —with regards to the IPO, would you be able to give us information about the current investors? Are they drawn from our mix of venture capital, private capital, small investors? Is it a mixture of those? 

Luis: I think, in general terms, what I’ll say is that we priced our IPO between $4 and $5, and we listed at the high end price of that range because there was tremendous demand for both institutional investors, as well as retail investors. 

Clearly over the next weeks and months, as our story continues to grow and as the investment community continues to learn about the key differentiators for our growth —all the cannabis companies like our production cost, which is 25 times more cost effective than North American cultivation, and they like our organic, all natural outdoor products from the best geographical regions in the world. 

For these types of premium flower, like our portfolio of brands and products and our expansion strategy, when those things come into place, I expect there’s going to be a different set of investors joining us. The balances and developers will shift a little.

What I can tell you, Heather, is that there’s a lot of interest, of course, and there was much interest prior to the IPO. Obviously, we’re going to continue to monitor and as I have more insight into our investor base as it evolves, I’ll be happy to share some of that.


CLR: Okay, thank you for what you did share; that was helpful. Are you working with other major cannabis players in terms of investment coming from the market in general, or is Flora really trying to take this private company to a public one with just this group of investors they are already working with?

Luis: Well, the cannabis industry, even that $250 billion industry tends to be very small. What I’ll say here is that there’s a highly collaborative environment across the CEOs in the cannabis world. They’re clear to see when a company such as mine, which achieved a significant milestone in many ways.

The face that we did not do direct listing through to NASDAQ IPO is showing other companies the way that this formula helps not only legitimize the industry, but also shows American investors and investors worldwide that regulatory changes are really to legitimize the industry. That fact helps raise all boats. 

What I’ll share with you is that we’re going to continue harder. We have started to partner with some cannabis companies that are in existence today, and we’re going to continue to partner with them to support them and ensure that we get into agreements that allow us to amplify our revenues, amplify our geography, and create synergies that will allow us to reduce costs and improve margins.

That I expect will continue to happen over time. I will also add that there will be a period of condensation in the market and consolidation in the market. I think over the next months and years, we’re gonna see a lot of companies reaching out to big players like ours, or for some support to maximize the revenues, because they are running out of oxygen.


CLR: Agreed. So I would assume that, again, what you hope to achieve in this IPO —in this move for private to public— is really that global reach that you’re talking about, and the ability to produce and keep your production costs low without compromising the quality of the product.

Luis: You said it absolutely perfectly; we are expanding our infrastructure to have a global reach. We assess that over the next months and years, the cannabis industry will continue to facilitate regulation. 

As a result, the global supply chain will need global players that are manufacturing top quality products and that are developing top quality brands. The companies that are doing the work right now, like getting the brand into the consumers hands, but are also developing the infrastructure and that reach worldwide are the ones that are going to really shine in the end. 

That, of course, is the reason why we went public the way we did.


CLR: Yes. I want to applaud the whole way that you approached it. I think it was very interesting. I’m enjoying watching it unfold, because it’s a very intriguing endeavor that seems to be going very successfully so far for Flora Growth.

Luis: Thank you, Heather. Yes, I would say that we have a great product, and, of course, we have a great story. 

But, more importantly, we also have a solid team, —from our Chairman of the Board, who’s a former vice Chairman of PWC in Canada, to our founders, to Paulina Vega, a former Miss Universe and Latino female intrapreneur. We’re partnering only with great talent at all levels in the organization because we know that’s the only way we’re going to be able to deliver long term growth for our investors and great products for our consumers.


CLR: Since you’re talking about working with other people, as far as your workforce, are there any jurisdictions where they’re unionized? 

Luis: No.


CLR: Particularly in the greater processing end of the business, do you offer your workers more than the measly minimum wage in the US? Do you guys really try to keep a good team on your side by offering them inclusiveness, overall?

Luis: Yes, social responsibility, and it’s a core value of our company. 

It all starts with your team, with your employees. At our cultivation facility, we need to follow some of the strictest operational standards that have been developed by the industry. That’s because we are pursuing global gap certification. We are pursuing a National Organic program which is a worldwide organic certification, and of course, EU GMP standards. 

Alongside all those standards, you have to make sure that you provide exceptional working conditions for your workers, which includes vocational clothing education, out of growing programs. 

Also, in our farm, we only hire workers from those particular geographical areas because we want to support the communities in which we’re operating. That has, of course, had a positive effect in the communities as we’re hot right now. 

We’re hiring people from the local communities, they’re spreading the word about the company, and increasing the goodwill that the company has in the regions that they operate. I only mention the cultivation facility, but that translates and permeates through the entire infrastructure of the organization.


CLR: Which leads me to the question about can you now say you grow at the $.06 per gram. I wonder if we can discuss that figure is a little bit. How are you able to achieve that cost saving to consumers, especially when we can see what you’re doing with outdoor cultivation, versus all these other giant greenhouse brands?

Luis: Well, it starts with the first time greenhouses requiring massive investment in infrastructure. That immediately increases your cost of cultivation.



There are a couple of factors by which we have been able to achieve that cost structure. The first one is the geographical conditions under which cannabis is grown. We are on the outskirts of Colombia.

Colombia is the largest producer of cannabis flower in the world and the second exporter of flower in the world’s economy, for example, in the Netherlands. 

Right now, 70% of all the flowers coming to the US come from Colombia. So at one point or another, it is likely that you will have some Colombian flowers in your home.


CLR: Probably so.

Luis: That’s right. So that extends to cannabis, because by all intents and purposes, Cannabis is a specialty flower. That knowledge allows us to grow and extend exceptional quality.

Our inner farm, which is located 1500 meters above sea level, has constant winds of three miles per hour almost 360 days a year, and of course, there’s no seasonality. The weather is optimal the entire year, and our soil is highly nutrient-rich —all of these factors combine into high density planting and a higher yield of flour per plant. And that, of course, reduces your production cost. 

The other factors deal more with the economics of Colombia, and of course, the strength of the US dollar to pesos is a massive one; it’s about $1 to 3000. As of yesterday, 3800 Colombian pesos is very, very, very inexpensive. 



In Colombia, we have natural water deposits in our farm, which are usually some of the highest costs in terms of utilities. Once we build our infrastructure and our irrigation system, our water costs are near zero. 

Then, the agricultural skilled labor in Colombia is nine times more cost effective as that of the United States, for example. When you combine all those factors, you’re able to reach those significant economies more than your other cannabis counterparts.


CLR: On reaching other cannabis markets, you’ve talked about the UK and Costa Rica, and you have some plans for Asia Pacific coming up.

My big question here is about Australia, where Cannabis Law Report is based. Australia has a huge flower shortage issue, due to the high cost of production, locals who are really fully online and exporting, and Australia’s government and bureaucracy being a little bit lazy. Do you still see opportunities in Australia’s market?

Luis: We do in Australia, yes. Australia is 100% on our radar. There’s a few ways in which we’re exploring Australia. Topicals is one of those ways where we see an entry into the market over the short term, it would be a shorter wait than flower. 

However, countries and regions such as those —where you don’t have consistency in operation, when you cannot produce with with the same level of quality batch after batch of cannabis— those are the markets that are going to benefit from an operation such as ours, an operation that is operating at the highest standard levels, because we’re going to be able to provide medical grade cannabis to these regions that are going to satisfy those consumers. We’ll be able to meet the demand.

Of course, this dry flower is a little bit longer away in Australia, but it’s definitely in our sights. As I mentioned, we’re going to continue to pursue this short term opportunity meanwhile, which I think is the topicals market. 



CLR: That’s a great place to start —if you know that topicals-in-market is happening right now, and that even short term, you can get in into the Australia market that way. Then see how that expands.

Luis: Correct. And that’s why we have five divisions or companies: 

  1. Each cultivation facility
  2. Each extraction facility.
  3. State of the art laboratory where we can manufacture all sorts of topicals, and gels and dietary supplements
  4. Food and beverage division, and some pharmaceutical OTC.
  5. We have our textile division of industrial hemp, where we are currently clothing, with our brand called “Starboard Loungewear.”

The reason why we have all of those divisions is because the barriers of entry across each industry are different, and it allows us to explore our good distribution institution transported into those countries where we know we’re going to be able to be extremely profitable long term.


CLR: I understand what you mean; there are countries where your hemp merchandise like clothing is going to be your entry point, rather than just starting out with trying to get into a new country with cannabis flower, or even topicals for that matter.

Luis: Exactly. There are various levels—margin levels and profit levels— for each one of those categories. The positive is that you’re able to develop your distribution network, you’re able to set your flag on that country, and you’re able to start working with distributors. 

That fact is very positive for a brand that eventually, when regulation opens up for a very high margin product like the dry flower, our quality organic dry flower will already be set up there and doing this in operations that we’ll be able to maximize, slowly but surely.


CLR: You might have to consider Florida where I am, because we are the third largest state in cannabis sales and we don’t even have recreational cannabis legalized yet.

Luis: Right. I just came back from Florida yesterday. Regarding Florida, we assess it is going to be a very critical market for the cannabis industry. Our operations in the US are going to be based out of Miami. For that reason, we 100% agree with you. The Florida market is an interesting one, and it’s going to be one that is going to have experienced significant growth for years to come.



CLR: I’m excited to hear that you’re going to be headquartered in Miami, I will definitely have to take a tour at some point.

Luis: Oh, absolutely. I would love for you to see our cultivation facility in Columbia, though  I will tell you not only the fields of cannabis —but just the aroma, as you walk into this beautiful and amazing place.

Our farm is in one of the most beautiful geographies in the world. Completely breathtaking. Once an investor or somebody that is into our project visits the farm, they completely get why we’re so different, why we’re able to achieve these costs, and why our product is of such quality —because it’s truly an exceptional geography.


CLR: From the way that you are just speaking about it, I can tell that you’re not only passionate about it, but you’ve really thought your steps ahead; you’ve thought out all the avenues ahead, and Flora Growth, especially, is looking to expand in as many ways as you can and  into as many communities as you can.

Luis: That is correct. I appreciate you noticing that everything we’re doing, we’re doing a lot of passion. We believe each project is going to be incredibly successful.



CLR: Since we you mentioned you have over 250 products, can you elucidate on some of the ones that especially retail well?

Luis: Of course! Our skincare products are doing exceptionally well. We’ve partnered with a former Miss Universe, and she’s the brand ambassador for us. She developed two brands aimed at the American consumer.

First, one of them is for the mass market and one of them is for the prestige market. The first one which we launched is called “My Natural Skin”” and it also includes all vegan ingredients, no animal tasting, no ingredients that are any bad list from anyone, ever. Then various moisturizers are packed in the first fully biodegradable jar to be used in a skincare brand, which is very beautiful — but most importantly, all the packaging is sustainable. Of course, we try to maintain that idea of sustainability across the entire nutrition area, like CBD, because it goes over very well with consumers. 

The second brand is a prestige brand, which is very luxurious, made with Italian glass and a higher concentration of active ingredients, which is for a more serious skincare consumer in terms of what they’re expecting from the skincare routine. That brand launched not long ago to very good results. We continue to expand our operations.

Additionally, our white label unit performs exceptionally well. We use custom formulas in Colombia, where those are prescription-grade formulas that are given to patients to treat specific issues. That is a big business for us because Columbia has a very high market. That line of business operates really well, and will continue to expand in Colombia and to some other countries and geographies in South America.


CLR: That’s amazing. I’m seriously excited about a biodegradable skincare container because that is my biggest problem right now, with cannabis, the industry at large is that we have a large packaging problem. We have a lot of excess, and what you’re doing by bringing that across your whole line, from production to retail, is very commendable. You’re right, that’s where consumers are heading.

Luis: 100%. The companies that are developing products, and doing the right thing for the environment, and doing the right thing for their employees —one of our core values— but those brands and companies continue to grow and truly thrive. 


CLR: Thank you so much for your time. I would like to ask you the million dollar question here at the end: when do you think there will be some federal legalization in the United States?

Luis: I think we’re all waiting patiently on Senators Schumer and Booker, or the Congress. With respect to that question, I think it is going to be discussed in the third quarter of this year and we’ll likely expect some roll-out on it by early next year, perhaps Q1 of 2022.


I think it’s a very reasonable timeline. Obviously, this will be a significant change, and it’s not a matter of if it’s going to happen, it’s a matter of when it is going to happen.



CLR: I agree with that. I think it’s going to be around Q1 of 2022. It’s good to know I’m on the right track. Thank you for the insightful interview.

Luis: Thank you so much for your time. It’s been a pleasure to meet you.


CLR: Yes, you too. Thanks for talking to the Cannabis Law Report. 


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