Flowr Corp. is the latest Canadian cannabis company to sell off an unneeded property, closing the sale of its Flowr Forest facility in British Columbia for aggregate proceeds of 3.4 million Canadian dollars ($2.6 million) – significantly less than what it invested in the outdoor and greenhouse cultivation site.
Part of the proceeds from selling the Kelowna facility to an unidentified “arm’s length third party” have been used to repay the remaining balance of a credit facility, Flowr noted in a Monday news release.
“The company, now bank debt free, intends to use the remaining proceeds for working capital,” Flowr said in the release.
Flowr had spent CA$10.2 million on the Flowr Forest facility as of the end of 2020, according to a regulatory filing.
The company completed a harvest from the site in 2019 but later impaired all the inventory from that site “pending a Health Canada review of a regulatory interpretation,” the filing said.
After that review, Flowr disposed of its inventory from Flowr Forest and started “assessing its strategic alternatives” for the site.
Canadian cannabis producers have destroyed increasing amounts of cannabis since adult-use legalization in 2018 as the industry tries to rein in oversupply.
Flowr announced an agreement to sell the Flowr Forest facility in June, as it cut 40% of its workforce.
In July, Flowr announced it was selling an R&D facility for CA$15.9 million.
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The latest facility sale “marks the completion of first phase of the Company’s transformation plan,” according to the release.
The company’s shares trade as FLWR on the TSX Venture Exchange.