With last month’s application to list its common shares on the NASDAQ Capital Market exchange, The Flowr Corporation (TSXV:FLWR) (OTC:FLWPF) strengthened its standing as one of Canada’s top licensed indoor producers of premium cannabis products for adult- recreational and medicinal markets.
The step-up to NASDAQ from the OTC market signals that Flowr is indeed blossoming. Although listing requirements are rigorous, potential benefits to the company are significant. As a NASDAQ-listed company Flowr can expect deeper trading liquidity, tighter price spreads, and expanded access to global investors, all of which better position the company to meet booming demand and attract growth capital.
Indeed, throughout 2018 cannabis investors grew increasingly bullish, thanks to the opening of Canada’s recreational pot market in October and significant strides in legislation and cultural acceptance of cannabis use throughout the U.S. generally.
For the handful of other Canadian licensed producers currently trading on major U.S. stock exchanges, the move stateside has been a good one. Since debuting on U.S. exchanges last year, Canadian giants Canopy Growth Corp. (NYSE:CGC), Cronos Group (NASDAQ:CRON), and Tilray (NASDAQ:TLRY) experienced outsized gains and significant investor interest. Canopy Growth and Cronos turned in double digit gains of 13.6% and 34% for 2018, respectively, despite negative returns for major U.S. indices over the same periods. In addition, Tilray launched the first pure-play cannabis IPO in the U.S. as part of its uplisting to NASDAQ in July 2018. The offering was massively oversubscribed, with shares opening 36% higher than expected. Tilray finished the day with an additional $153 million in hand to support expansion and finished 2018 with gains in excess of 200%.
Expectations for 2019 and beyond are even rosier. According to Arcview Market Research and BDS Analytics, global sales of legal marijuana are expected to grow 38% in 2019 to $16.9 billion, and top $31 billion by 2022.
NASDAQ’s robust listing requirements will compel Flowr to adhere to increased regulatory scrutiny, including registration of common shares with the Securities and Exchange Commission (SEC). Assuming all applicable requirements are met as expected, a trading date will be released publicly.
Though smaller than other U.S. listed cannabis companies, Flowr has distinguished itself through innovative methodologies (including patented growing systems) and some of the best crop yields in the industry today. The company’s emphasis on increasing yields, reducing costs and producing a high quality product positions Flowr to reach profitability faster and more sustainably than many of its larger competitors.
From its start Flowr has been deliberate in pursuing smart growth strategies. The company builds and operates large-scale, GMP-certified cultivation facilities, and prioritizes research and development, clearly demonstrating that innovation is at the heart of its business strategy and that it expects to be around for the long term. Future projects could include strategic partnerships, export opportunities, ingestibles and other derivatives (when legal in Canada), genetics, and clone sales. The NASDAQ uplist is yet another step in Flowr’s march toward industry leadership and rise as a global enterprise to be reckoned with.
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