High Yields, Low Production Cost Give The Flowr Corporation (TSX.V: FLWR) (OTC: FLWPF) Competitive Advantage in Cannabis Market

January 25, 2019 11:53:13
  • The Flowr Corporation anticipates maximizing yield even further, lowering production costs to C$2.05 per gram in 2019
  • Company seeking strategic partnerships to ensure solid distribution channels and opportunities to advance cultivation techniques
  • Cannabis supply expected to surpass demand, giving competitive advantages to companies with high yields and low production costs

Canadian cannabis product manufacturer The Flowr Corporation (TSX.V: FLWR) (OTC: FLWPF) has designed and built 17 cultivation facilities to date, relying on innovative processes to ensure high yields and low production costs. This methodology could give Flowr a competitive advantage moving forward as anticipated changes occur in the cannabis sector.

A vertically integrated company, The Flowr Corporation produces premium cannabis products and currently operates under three producer licenses issued by Health Canada. Under the guidance of its knowledgeable and experienced executive team, the company has established a flagship Kelowna campus — a facility that’s considered to be one of the most advanced in terms of cannabis cultivation worldwide.

Such assets could provide Flowr with a significant advantage over the competition in the next few years. According to industry analysis, an upcoming supply glut is anticipated in the cannabis sector. Supply is on pace to surpass demand for the product by 2020, a market development that will favor producers capable of ensuring high yields and cost efficiency (http://nnw.fm/sK1DM).

The Flowr Corporation differentiates itself from the competition through the exceptional yield per square foot at its production facilities. As the supply continues to increase, companies will be forced to reduce their prices in order to remain competitive. Flowr has already reached a price point that may be difficult for others to surpass.

To increase its competitiveness even further, Flowr is currently working on optimizing its yield. Company co-founder and Chairman Steve Klein noted that yield is the most important performance indicator in the industry. Higher yields reduce production costs, and, in 2019, Flowr anticipates reaching a cost of C$2.05 per gram.

According to an article published by investment advice website The Motley Fool, Flowr beats most Canadian producers when it comes to crop yields. The company’s cost per gram announced for 2019 is lower than what large marijuana producers such as Canopy Growth Corp. (TSX: WEED) (NYSE: CGC) and Tilray Inc. (NASDAQ: TLRY) are capable of offering.

Flowr has also been working to ensure a solid distribution network via partnerships with reputable industry representatives.

Earlier this month, Flowr and Shoppers Drug Mart announced a multiyear deal for the supply of medical cannabis for the Shoppers online store (http://nnw.fm/VxSg5). Shoppers Drug Mart is Canada’s largest retail pharmacy chain, with 1,300 locations from coast to coast.

The partnership will provide patients with premium medicinal cannabis, according to Flowr co-CEO Tom Flow. Strict processes and state-of-the-art growing facilities enable Flowr to provide patients with high-quality product and consistent benefits.

Flowr focuses on premium and ultra-premium production. As a result, the company anticipates appealing even more to an exclusive group of customers. In addition, this adherence to strict industry standards resulted in a research and development partnership with Scotts Miracle-Gro (NYSE: SMG) subsidiary Hawthorne Gardening. In October 2018, the two companies broke ground on North America’s first research and development facility dedicated to advancing cannabis cultivation techniques (http://nnw.fm/xCi1Q).

For more information, visit the company’s website at www.Flowr.ca

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