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  • In 2021, the Company generated gross revenue of approximately $14.9 million and generated gross revenue of $4.3 million during the fourth quarter.
  • During the year, the Company sold 6,627,052 grams of dried cannabis flower, an increase of 372% as compared to the prior year.
  • The Company has expanded in format sizes beyond is signature 3.5 gram jars to include 7 gram and 14 gram bags.
  • Flowr launched BC Dog Walkers in Ontario, British Columbia, and Alberta. The BC Dog Walkers highlight the Company’s ability to react to consumer demand and bring novel formats to market.
  • Flowr exported its first shipment of medical cannabis from Kelowna, British Columbia to Israel in December 2021 valued at $825,000, which has opened up an import revenue channel for the Company.
  • In 2021, the Company repaid approximately $15.6 million in overall indebtedness and had $5.7 million of principal outstanding pursuant to its senior secured facility with ATB Financial at the end of the year. The Company expects to fully repay its senior credit facility with the proceeds of certain non-core asset sales.

Key Subsequent Events:

  • KRS Sale – Company entered into an agreement to sell its interest in the KRS R&D facility to Hawthorne for an aggregate purchase price of $16 million.
  • Holigen Sale – During the second quarter of 2022, Flowr completed the sale of Holigen Limited for aggregate consideration of over $35 million. The consideration was comprised of: (i) approximately $3,750,000 in cash; (ii) 1,900,000 common shares in the capital of Akanda Corp.; (iii) the indirect assumption by Akanda of indebtedness of approximately $5,100,000; and (iv) $1,234,000 of interim funding to Holigen.
  • New Genetics – Flowr has introduced several high-THC strains, including BC Clementine Crush, BC Lemon Ice, BC Spiced Grape and BC Mango Melon OG.
  • Non-Core Asset Sales – The Company is in the process of monetizing other non-core assets, which it expects to result in approximately $3 million to $4 million in cash proceeds.

TORONTO, May 20, 2022 (GLOBE NEWSWIRE) — The Flowr Corporation (TSX.V: FLWR; OTC: FLWPF) (“Flowr” or the “Company”) herein announces its financial and operational results for the fourth quarter and fiscal year ended December 31, 2021. All financial information in this news release is reported in thousands (‘$000s) of Canadian dollars and represents results from continuing operations, unless otherwise indicated.

Tom Flow, Interim Chief Executive Officer of Flowr commented:

“2021 was a pivotal year for Flowr as we renewed our focus on maintaining our status as a premium cannabis producer and making the necessary changes to our business operations to reach profitability. The Company made significant progress towards this objective, as we continue to take the necessary steps to reduce costs and drive revenues. In Q4 2021, we achieved new records in gross and net revenue at $4.4 million and $3.9 million, respectively, contributed by our previously announced strategy of introducing exciting new genetics and formats, enhancing our retail penetration, and solidifying our world class operations out of the K1 facility.

Operationally, the K1 facility has been now fully operational since the second half of 2021 and each grow room is being utilized to ensure our fixed costs are being spread out over a higher number of production grams. We have increased our product offerings significantly with the launch and success of Strawnana, Sour Sis, BC Dog Walkers, and in 2022 introduced several new exciting strains including BC Clementine Crush, BC Lemon Ice, BC Spiced Grape and BC Mango Melon OG, with more planned for the rest of 2022. We have also seen significant growth in retail penetration across our core markets with store distribution well over 50%.

Financially, we have strived to improve our financial position by reducing costs, shedding non-core assets and licenses, significantly reducing overall indebtedness, and raising additional equity capital. The sale of the KRS R&D facility and Holigen as previously announced will further reduce the Company’s indebtedness to approximately $10 million, including $5.7 million under the senior credit facility and $5 million of convertible debentures, with further paydowns to the senior credit facility expected in the second quarter. The Company has reduced SG&A expenses each quarter since the end of 2020 with Q4 2021 SG&A 16% lower than the same period in 2020.

As previously announced, we have closed the sale of Holigen for what we believe to be favourable terms for Flowr shareholders. The Company undertook a robust sale process and was able to transact upon a deal that gave Flowr a significant amount of cash on closing to solidify its balance sheet and also preserve the upside related to our European operations. We still believe the European market is on the cusp of regulatory change and we believe that Holigen will be able to take advantage of those opportunities with the capital and excellent management team from Akanda.

Although we did not reach our full objectives for 2021, we are encouraged by the positive steps we have taken to position Flowr in 2022. Through the various changes that have been implemented, we believe Flowr is in a better position to realize its full potential and deliver results. The next few quarters will be an exciting time for Flowr as the Company takes the last steps towards profitability.”


The following table summarizes the Company’s key financial and operational results:

In thousands of CAD dollars, Three months ended
Year ended
(except loss per share and grams harvested) December 31,
December 31,
2021 2020 2021 2020
Grams harvested – K1 1,270,027 1,195,260 4,278,407 4,336,240
Grams sold 1,406,904 311,308 6,627,052 1,405,495
Gross revenue 4,292 2,066 14,877 9,441
Net revenue(1) 3,801 1,600 12,348 7,513
Cost of sales 5,262 2,904 22,064 11,468
Impairment of inventory 1,515 842 2,394 3,517
Gross loss before fair value adjustments (2,976 ) (2,146 ) (12,110 ) (7,472 )
Selling and marketing and G&A 3,900 4,614 16,327 18,613
Share-based compensation 631 396 (83 ) 3,020
Transaction costs 917 917
Restructuring costs 726
Impairment of assets 57,096 83,979 57,096 83,979
Loss from disposal of subsidiary (909 ) 241
Net loss (63,859 ) (99,750 ) (89,234 ) (127,855 )
Adjusted EBITDA (5,154 ) (5,383 ) (20,058 ) (18,670 )
Basic and diluted loss per share (0.15 ) (0.07 ) (0.23 ) (0.95 )

(1) Gross revenue net of excise tax, provision for returns and concessions.

Financial Results (presented in $000s)

  • Consolidated gross revenue for Q4 2021 amounted to $4,292, representing a 108% increase compared with $2,066 in Q4 2020. Consolidated net revenue during Q4 2021 was $3,801, 138% higher than the $1,600 earned in Q4 2020. Both gross revenue and net revenue for Q4 2021 were the highest quarterly revenue recorded by the Company since inception, contributed by increases in cannabis sales in Flowr Canada.
  • Net revenue from Flowr Canada during Q4 2021 amounted to $3,679 compared with $1,533 in the same period of 2020, while revenue earned by Holigen was $122 during Q4 2021 compared with $67 in the same period 2020. Net revenue from Flowr Canada in Q4 2021 was a new record and the third straight quarter of revenue growth, being 61%, 88%, and 4% higher than the net revenue for Q3, Q2, and Q1 2021 respectively. The increase in revenue from Flowr Canada was contributed by higher grams of products sold during Q4 2021 and the introduction of the new strain BC Strawnana and a new format of pre-rolls, partially offset by a decrease in average prices.
  • Full year gross revenue for 2021 amounted to $14,957 compared with $9,441 in 2020, representing a 58% increase. Net revenue for the full year 2021 totaled $12,348 compared with $7,513 in 2020, representing a 64% increase.
  • Net revenue from Holigen related to tolling service revenue earned in Portugal, which amounted to $122 during Q4 2021 and $712 for the full year 2021, compared with $67 for the same respective periods in 2020.
  • SG&A expenses for Q4 2021 further declined to $3,900 compared with $4,614 in Q4 2020, representing a 15% reduction. SG&A expenses for the full year 2021 was $16,327, 12% lower than the $18,613 recorded for the full year 2020. Since the end of 2020, Flowr has significantly reduced SG&A expenses each quarter, reflecting the cost reduction measures the Company implemented during 2021.
  • Cost of sales for Q4 2021 was $5,262 compared with $2,904 for Q4 2020. The increase in cost of sales resulted from a significantly higher volume of cannabis sold during the current quarter at 1,407 kilograms compared with 311 kilograms sold during Q4 2020. Cost of sales for the full year 2021 was $22,064 compared with $11,468 for 2020 primarily due to the significantly higher volume of cannabis sold.
  • The Company recorded impairment charges totaling $57,096 in Q4 2021 compared with $83,979 in Q4 2020. For Flowr Canada, the Company recorded $24,552 of impairment against goodwill, $1,350 against intangible assets, and $14,498 against property, plant and equipment. For Holigen, an impairment charge of $4,661 was recorded against intangible assets and an impairment charge of $4,289 was recorded against property, plant and equipment.
  • Net loss attributable to shareholders of the Company totaled $61,277 for Q4 2021 compared with a loss of $100,454 for Q4 2020. Net loss attributable to shareholders of the Company for the full year 2021 was $85,532 compared with $125,621 for 2020. The change in net loss for was primarily due to higher revenue, lower SG&A expenses, lower impairment charges, reversal on share-based compensation, partially offset by higher depreciation and amortization, loss on disposal of subsidiary, higher other expenses, and lower income tax recovery.
  • During 2021, the Company significantly reduced its long-term debt outstanding under its senior amended and restated credit agreement (“ARCA”) with a syndicate of lenders led by ATB Financial (“ATB Financial”) by a total of $12,828, bringing the principal amount outstanding to $5,705 at the end of 2021 from $18,533 at December 31, 2020.
  • In Q1 2021, the Company closed a bought deal short form prospectus offering (the “Bought Deal”) for gross proceeds of $15.9 million including the partial exercise of the over-allotment option ($14.4 million net proceeds after fees and transaction costs). In connection with the Offering, the Company issued 31,127,453 units (the “Unit”) at a price of $0.51 per Unit (the “Issue Price”), with each Unit consisting of one common share in the capital of Flowr (each a “Common Share”) and one full Common Share purchase warrant of the Company (each whole warrant, a “Warrant”). Each Warrant is exercisable to acquire one Common Share at an exercise price of $0.64 per Common Share for a period of two years from March 16, 2021 (the “Closing Date”).
  • During Q3 2021, Flowr closed two private placement financings for total gross proceeds of $7,564,000 and issued 36,019,047 units (“Units”) of the Company at a price of $0.21 per Unit, with each Unit consisting of one Common Share and one Common Share purchase warrant which entitles the warrant holder thereof to acquire one Common Share at an exercise price of $0.26 per share any time for a period of 42 months from the closing date.

Operational Updates

  • During 2021, Flowr achieved full operation in all 20 grow rooms at the K1 facility and improved the THC level by an average of +3.9% and consistently increased the output of flowers at high THC levels.
  • Flowr successfully introduced a new format of pre-rolls trademarked Dog Walkers which started delivery in Q4 2021. These 0.35g pre-rolls are packaged in an innovative tin pack of seven pre-rolls and have been listed in British Columbia, Alberta, and Ontario. The initial launch in British Columbia of the Dog Walkers sold out in less than two weeks.
  • During Q4 2021 the Company introduced its high-THC strain BC Strawnana with an average THC of 26.2%, which was accepted for listing in Ontario, British Columbia, Alberta, and Saskatchewan.
  • Over 50 new and exotic genetics have been trialed since Q2 2021. Three of these new strains have been approved for product listing in Q1 of 2022, significantly expanding the Company’s product portfolio. These additional listings will continue Flowr’s push to offer consumers differentiated exotic genetics, with high THC, high terpene contents, strong sensory profiles and premium quality buds.
  • In December 2021 the Company completed its first shipment of premium dried cannabis flowers from Canada to Israel, as part of the previously announced international supply agreement (the “Supply Agreement”) with Focus Medical Herbs Ltd. (“Focus Medical”), a company which IM Cannabis Corp. (NASDAQ: IMCC) (CSE:IMCC) (“IMC”) has an exclusive commercial agreement with in Israel. The first shipment consisted of premium cannabis across two strains for a total of $825,000. The shipment represents the Company’s debut into the Israeli market and the first significant international export.
  • In December 2021, the Company successfully closed the previously announced sale of unused industrial land located in Kelowna, BC for gross sale price of $6.3 million in cash, including $5.3 million paid on closing and a further $1.0 million cash receivable within six months upon satisfaction of certain conditions. Pursuant to the credit agreement with a syndicate of senior lenders led by ATB Financial (the “Credit Facility”), the Company made an early principal repayment of $3 million towards the Credit Facility using proceeds from the land sale, reducing the principal amount outstanding to $5.7 million by the end of 2021. In exchange for the $3 million paydown, ATB Financial proceeded to release its security over Holigen Holdings Limited (“Holigen”).
  • Holigen’s indoor facility in Sintra, Portugal was fully operational with all grow rooms planted and producing E.U. GMP medical cannabis during Q4 2021. The BC Black Cherry and BC Strawnana strains from Flowr have been in production with the first harvest taking place in January 2022.

Key Events Subsequent to December 31, 2021

  • In February 2022 the Company entered into an agreement to sell its interest in the KRS R&D facility (the “KRS Facility”) to Hawthorne Canada Limited (“Hawthorne”) for an aggregate purchase price of $16 million (the “KRS Sale”), to be paid as follows: (i) an initial cash payment of $3.0 million; (ii) full extinguishment of the principal amount outstanding under the existing loan agreement between Flowr and Hawthorne for the construction of the KRS Facility on closing at approximately $12 million; and (iii) the balance of the purchase price of approximately $1.0 million paid in cash upon closing. The KRS Sale is expected to close in Q2 2022 and is subject to certain closing conditions.
  • Flowr has further increased its product offerings 2022 with the launch and success of BC Clementine Crush, BC Lemon Ice, BC Spiced Grape and BC Mango Melon OG, and a further seven new SKU’s to be introduced in Q2 2022 across the provinces of Ontario, Quebec, British Columbia, Alberta and Saskatchewan. For the year 2022 to date, the BC Strawnana Dog Walker pre-rolls was the top ranked SKU and represented approximately 20% market share in Ontario in that size/price category (0.30 to 0.35 grams at above $10/gram), and continues to show strong traction in the provinces of British Colombia and Alberta.
  • The Company has shown significant growth in retail penetration across its core markets. In Ontario, over 65% of stores currently carry at least one Flowr product, representing significant growth from under 50% in August 2021. Across our other major markets, store distribution of Flowr products has grown from approximately 30% to over 60% and from approximately 27% to over 55% in British Colombia and Alberta, respectfully.
  • On April 19, 2022, the Company, through its wholly-owned subsidiary HHL, entered into a share purchase agreement (the “Purchase Agreement”) with Akanda Corp. (NASDAQ: AKAN) (“Akanda”) and Cannahealth Limited (the “Purchaser”), a wholly-owned subsidiary of Akanda. Pursuant to the Purchase Agreement, the Purchaser will acquire from HHL (the “Holigen Sale”) all of interests in HL (including HL’s wholly owned subsidiary RPK) for aggregate consideration of approximately $35 million.

Pursuant to the terms of the Purchase Agreement, the Company has agreed to sell HL to the Purchaser for total consideration payable of approximately $35 million (the “Purchase Price”) consisting of: (i) $3,750,000 in cash; (ii) 1,900,000 common shares in the capital of Akanda (the “Consideration Shares”) which closed at U.S.$10.30 per share on April 19, 2022; (iii) the indirect assumption by Akanda of RPK’s indebtedness of approximately $5.1 million; and (iv) at least $0.8 million of interim funding to Holigen which has already been received by Flowr. If the Purchase Agreement does not close on or prior to May 31, 2022, the interim funding will be repaid to Akanda by the delivery of medical cannabis from Holigen at a price of €2.00 ($2.72) per gram or in cash, at the discretion of Flowr. In connection with the Transaction, Holigen will pay an advisory fee equal to 7% of the Purchase Price, 50% of which is payable in cash and 50% of which is payable in Consideration Shares.

In addition, Akanda agreed to subscribe for $1 million of common shares in the capital of Flowr (the “Private Placement”) at a price per share of $0.07 per share. The Consideration Shares are subject to a customary six-month lockup.

The Holigen Sale closed on April 29, 2022 upon receiving the necessary approvals and satisfaction of other closing conditions.

  • As of December 31, 2021, the Company is in compliance with the senior debt to tangible net worth ratio and the minimum cash covenants. The Company was not in compliance with the minimum EBITDA covenant for the fourth quarter of 2021, the first time the covenant was tested. On May 20, 2022, the Company and its Senior Lenders led by ATB Financial entered into a second amendment to the ARCA (the “Second Amendment”), which included extension of the minimum EBITDA covenant and certain amendments to other financial covenants, repayment terms, and provided the Company with consent to complete its sale of the KRS Facility. Pursuant to the Second Amendment, the Company will proceed to make repayments in aggregate of $2,5 million. Upon closing of the sale of the KRS Facility, under the terms of the Second Amendment, the Company will make another $1.0 million repayment, bringing the principal balance owing down to $1.6 million.
  • The Company has recently listed for sale 17 acres of agricultural property located adjacent to the K1 Facility (“Flowr Forest”). As a non-core asset, the Company believes it will be able to sell Flowr Forest for proceeds of between $3 million to $4 million, which will be used to improve the financial position and working capital of the Company.
  • Effective immediately, John Chou has resigned from his position as Chief Financial Officer for medical reasons. Mike Willetts has been appointed Interim Chief Financial Officer of the Company effective immediately. Mr. Willetts is an experienced business executive with over 25 years of experience in financial leadership and is currently the Chief Financial Officer of GetSwift Technologies Limited and Forward Water Technologies Corp. The Company would like to wish Mr. Chou all the best with his future endeavours.

Adjusted EBITDA (Non-IFRS Measure)

Adjusted EBITDA is defined as net loss, plus (minus) income taxes (recovery), plus (minus) interest income (expense) including finance costs, plus depreciation and amortization, plus share-based compensation, plus (minus) non-cash fair value adjustments on biological assets and inventory sold, plus restructuring and transaction costs, plus (minus) loss (gain) on investments, plus impairment charges, and plus (minus) unusual or non-recurring items. Management believes this measure provides useful information as it is a commonly used measure in the capital markets and as it is a close proxy for repeatable cash used by operations.

For a full discussion of Flowr’s operational and financial results for the year ended December 31, 2021, please refer to the Company’s Management’s Discussion & Analysis and Consolidated Financial Statements for the year ended December 31, 2021, which have been filed on SEDAR.

About The Flowr Corporation

The Flowr Corporation is a Canadian cannabis company with operations in Canada and the European Union. Its Canadian operating campus, located in Kelowna, British Columbia. 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.


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