Cannabis companies are continuing to pursue listings on prestigious, American stock exchanges.
On late Thursday, Canadian-based Flowr Corp (TSXV: FLWR) announced that it had just received approval to list on the NASDAQ, a significant victory for the company, whose market cap is around C$350 million.
The company noted that its common shares will be listed on the NASDAQ under the ticker symbol FLWR, sharing the same symbol as shares traded on the TSX Venture Exchange.
Headquartered in Toronto with its main production facilities in Kelowna, British Columbia, Flowr is expected to produce over 50,000 kg of premium cannabis flower per year.
“We have made tremendous progress against our strategic priorities in 2019, and the approval of our listing on the Nasdaq further enhances our capital markets objectives. This listing provides us with broader access to investors around the world and is a natural progression for Flowr,” said Vinay Tolia, CEO of Flowr. “Later this year we expect to complete construction of our purpose-built indoor cannabis facility, Kelowna 1, which will position us to pursue further expansion at our Kelowna Campus, while at the same time advancing our global plans through our announced partnership with Holigen Holdings Limited.”
Unlike many other growers, Flowr is focusing on producing marijuana catered to the premium, high-end market.
While many larger companies are trying to expand their cultivation capacities as fast as they can without paying as much attention to quality, smaller producers are having more success by pursuing this high-end, niche approach. Flowr also holds the distinction of housing North America’s first research and development facility focused on advancing cannabis cultivation techniques.
Many large cannabis giants have been struggling to find sources of premium cannabis, with much of the low-quality marijuana being difficult to sell to retailers. One cannabis giant, Tilray (NASDAQ: TLRY) has been struggling significantly to find sources.
Some of these companies have pursued an “asset-light” strategy, relying instead on third-party sources instead of investing in their own production facilities. In reality, this has backfired as many of these third-party sources ended up overestimated their ability to grow cannabis.
In this sense, smaller, premium producers like Flowr are in a good position going forward as their premium cannabis will remain in high demand.
Flowr also has the distinction of a number of major partnerships with Canadian retailers. The most significant of which was their announcement back in January 2019 where they would supply medical cannabis to Canada’s largest pharmacy chain, Shoppers Drug Mart.
The three-year deal was considered a massive step forward for both the two companies and the industry as a whole, with medical cannabis being treated as a pharmaceutical product.
The last cannabis stock that went public on the NASDAQ was Greenlane Holdings (NASDAQ: GNLN), which is less than half the size of Flowr.
Although the company went public with much fanfare, shares have fallen significantly since then as has been the case with many non-cannabis IPO’s in 2019.
Traders would do well to keep an eye out for Flowr’s stock when it does list on the NASDAQ.