Growing low cost cannabis in Columbia As the cannabis industry evolves and border barriers come down, companies growing in certain parts of the world will have an advantage. Luis Merchan CEO of Flora Growth a publicly traded, global cannabis company listed on NASDAQ under symbol FLGC joins Dan Humiston to talk about their global strategy. He shares details of how inexpensive they produce cannabis in Columbian and how they minimize their risk through product diversity. Produce by PodCONX https://podconx.com/guests/luis-merchan https://floragrowth.ca/
Growing low cost cannabis in Columbia
As the cannabis industry evolves and border barriers come down, companies growing in certain parts of the world will have an advantage. Luis Merchan CEO of Flora Growth a publicly traded, global cannabis company listed on NASDAQ under symbol FLGC joins Dan Humiston to talk about their global strategy. He shares details of how inexpensive they produce cannabis in Columbian and how they minimize their risk through product diversity.
https://podconx.com/guests/luis-merchan
RC Flora
[00:00:00] Dan Humiston: Today in raising cannabis capital, we are joined by Louise Marshawn from flora, Luis, welcome to the show.
Luis Merchan: Dan, thanks for having me.
Dan Humiston: I've heard a lot about your company and it's nice to finally meet you. I just jumped right into it, but it's assumed that it's the laws change and the artificial border barriers are removed.
The cannabis industry will file the same business lifecycle as every other industry. So certain aspects of cannabis will become commoditized and the low cost producers will have a huge advantage. So as the industry moves to this next phase, how have you positioned flora to Excel?
Luis Merchan: Thank you for that question. And you're absolutely right. I think over the term, the cannabis industry will continue to. High barriers of entry because it will be a highly regulator environment. However, trade across frontiers and geographies will continue to improve. And we expect over the next three to five years, there will be a [00:01:00] true global cannabis market.
And for that reason, we selected Columbia as a place for our cultivation operations. Columbia presents itself as the best geographical position to grow. Cannabis, which is a specialty called flower. And you probably remember Dan in the nineties, there was a major boom in the flower industry in Columbia.
And Columbia is now the largest producer of flowers. The second largest exporter of flowers. Second, only to the Netherlands. We expect that trajectory , will happen with cannabis and grow. We're seeing Columbia.
Dan Humiston: And there's a lot of other advantages to grow in Columbia that I read on your website. Not that I know this, but the average is hours of sunlight per day. And , the breeze helps with the bugs and there's a lot of other advantages.
Luis Merchan: Yeah, there's a number of factors. So you're absolutely right. A lot of people don't know this, but Columbia is the second, mostbiodiverse country in the world.There are five thermal floors, which means you can grow on an ocean level, but you can [00:02:00] also go at high altitude. Our farm is optimally located.
1500 meters above sea level. And at that altitude, we have nutrient rich soil. We have constant winds of three miles per hour, which reduced the incidence of pathogens. We also have almost 13 hours of sunlight every day of the year. It's a seasonal environment because this allows idea equator. And when you pair that.
With the agricultural know-how of the Colombian population, they Colombian people. Then you are in a great position to grow exceptionally quality product at a very low cost.
Dan Humiston: Man, it like 247 acres there right now.
Luis Merchan: that's correct. And this is just the beginning. Dan. We currently have the largest outdoor cultivation facility potentially in the world, certainly in Columbia and it's 247 acres, about a hundred hectares. The yield in terms of what the output that you can deliver from that land is about three and a half tons per Hector, like two per two and a half acres.
Per [00:03:00] year. So clearly we have a long way to go in terms of fulfilling our first 100 actors, but we are preparing for the future and we have enough land to scale that 21 more times, because we know eventually the demand will be there B because we're growing naturally organically. And, at the lowest cost structure potentially in the world.
Dan Humiston: And, most people need it. It will be like what about, the import export deals? I understand there's some changes down, right?
Luis Merchan: Meaningful change. And I had the opportunity to travel to Columbia last week and meet with the president and his team. We have been working for a long period of time to modify the loss with regards to cannabis regulation in Colombia and the biggest change. And the biggest breakthrough that we achieved last Friday was the ability to.
Export dry flour, to the global markets. As you know, Dan, over 50% of the cannabis industry. Is revenues come from dry flower. So now [00:04:00] Columbia and it's industries and it's companies. So just flora growth. We'll have the ability to export dry flower.
That's a massive change, but also I, my company has multiple business divisions, food and beverage textiles.We take advantage of the entire cannabis plant that needs to yield and uses. And the changes in the law now allow us to manufacture. Sail and export food and beverage products, textile products, and many others, which will be a significant revenue generation opportunity for, of course the country.
But of course, for fuller.
Dan Humiston: Oh, for sure. And I see you have multiple distributions sites across countries. I thought three continents I'm assuming that's one of your biggest challenges, but having all these distribution centers is probably setting you up for the future.
Luis Merchan: This Greg, but Danny, I think it's important that we highlight some of them of what fluoride is and are on our strategic advantages versus nada. We don't claim to be a vertically integrated company. We grow exceptionally high quality [00:05:00] cannabis at a low cost structure, and we have a portfolio of brands and products across multiple industries.
Which helped us both in revenues and margin. But we have established partnerships across the globe to ensure that they help us with the distribution of our derivatives and products, or we are making the strategic investments, investments, such as Hoshi international, where we own a minority stake on that company.
And that company is focused in European union with assets, both in Portugal and Malta. Two key entry points through the European markets that we're going to be able to leverage over the short term.
Dan Humiston: You know, I have another show and she often refers to cannabis byproducts as coal products, because she says there's really no waste in the cannabis plant and that sounds like what, that's, what you're taking advantages. I saw you have an apparel business for fiber and you have the beverage business that you talked about.
Is that all part of the big.
Luis Merchan: you're absolutely right. Then when you submitthe cannabis plant to extraction, you [00:06:00] are only utilizing 20 to 40% of the plant. The balance of the plant as of today, would go to waste if your unused balance for other than compost, if you don't find other uses for it and industrial uses.
Plastics paper, construction, materials, textile fibers. Those are all great opportunities that can be leveraged to ensure that you maximize the yield of the cannabis plant. Andas you see our strategy coming to play, you'll see that we're going to play in all of these industries, because we want to make sure that we deliver optimal efficiency and of course, major economic benefits to our investors.
And of course, great products to our consumers.
Dan Humiston: Well, You're on the right track. And you mentioned investors. And I saw, like, I think it was back in may that you guys went public on NASDAQ. And, , I didn't know that there were very many companies that got accepted on the NASDAQ you're under ticker symbol F. G C F L G C. How are you approved?
[00:07:00] Luis Merchan: Yeah it was not easy. There is certainly a path that we chose intentionally. We knew it was going to be a difficult path, but we wanted to prove to the investor community that we were a legitimate company and that we were willing to stand the rigor of NASDAQ of the sec FINRA and DTC. So it was a long process or almost a year.
But we ensured that we complied with all the requirements of the regulatory agencies in the United States.And we believe we're the first cannabis company to go through a direct listing in NASDAQ, allow us to demonstrate to investors that cannabis is an industry that can be trusted, that can bring long-term value for them.
And clearly we're being rewarded today. And investors have been rewarded. Of course.
Dan Humiston: Clearly, cause I saw where your stock started and I've been watching the numbers. It's been an , upward trajectory since day one, which is has a lot to do with your management. And I think that the approach that you guys are taking, I'm sure the investors obviously they seem excited about it.
Luis Merchan: Yeah, day one, we have [00:08:00] made sure that the human capital is a foundational priority of our company and not no company will be successful without , a great team. And we have been very intentional from our board of directors to our executive team, to the teams that are working in our farms on a daily basis.
We ensure that we provide them with the tools and resources to be successful. And clearly they are the ones that deserve all the credit to to our school.
Dan Humiston: Well, If you want to take a look yeah. The team, there's a profile on everybody on the floor, a website, which will have a link. We'll also have a Louise's information in the show notes. So if anybody wants additional information or if you want to, if you didn't hear this, the ticker symbol, or you want to check out their stock, check out the show notes, we'll have all the information there.
Louise. I'm really excited for you. This is fun. It's great to watch this happening. Thanks for being on the show today.
Luis Merchan: Thank you for having me, Dan and it's great to be here. We'll be happy to come anytime.