Hawthorne Canada completed the purchase of The Flowr Corp.’s Kelowna research and development facility for 15.9 million Canadian dollars ($12.4 million), the companies announced Wednesday.
Hawthorne Canada built the British Columbia facility in a partnership with Flowr.
Hawthorne Canada is a subsidiary of the Hawthorne Gardening Co., a division of Marysville, Ohio-based Scotts Miracle-Gro Co.
In 2018, Hawthorne and Flowr entered into an agreement to construct the Kelowna facility.
When the building opened in 2020, the companies said it was “North America’s first dedicated cannabis R&D facility focused on cultivation techniques and systems, including growth media, nutrient formulations, irrigation and lighting systems.”
Flowr owned the land and building, and Hawthorne was to finance all construction and development costs through a loan to the Toronto business.
In return, Hawthorne was to have access to the facility for 20 years.
According to financial records, Hawthorne loaned Flowr CA$11.5 million for construction and development.
In February 2022, Flowr agreed to sell its interest in the Kelowna facility for CA$16 million.
That included an initial cash payment of CA$3 million, extinguishment of the principal loan on closing (worth approximately CA$12 million) and another CA$1 million in cash on closing.
Flowr said it plans to use the proceeds of the sale to reduce the outstanding principal debt under its ATB Financial-led credit facility to CA$1 million.
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Earlier this year, Flowr agreed to sell its subsidiary Holigen Holdings, which owns two cultivation facilities in Portugal, to United Kingdom-based medical cannabis company Akanda Corp. for CA$35 million.
Flowr trades on the TSX Venture Exchange as FLWR.
