Flora Growth to acquire Koch & Gsell
by CM Staff
Under the Heimat brand, Koch & Gsell manufactures and distributes a range of hemp products that contain less then 1% THC.
Heimat’s hemp cigarettes are sold in over 2,500 stores across Switzerland.
TORONTO — Flora Growth Corp., a cultivator and manufacturer of global cannabis products, announces that it has signed a Letter of Intent to acquire 100% of the outstanding equity interests of Switzerland based Koch & Gsell and its wholly-owned hemp brand, Heimat.
Under the Heimat brand, Koch & Gsell manufactures and distributes a range of hemp products that contain less then 1% THC, including pure hemp and blended hemp and tobacco cigarettes, as well as bulk flower and teas in over 2,500 stores across Switzerland. Koch & Gsell distributes its Heimat pure hemp cigarettes and a variety of Swiss grown hemp flowers in Luxembourg and Belgium, expanding throughout Europe and standing at the doorstep to Asian countries.
The Heimat brand, if acquired, will represent an addition to the Flora brand portfolio as a potential high growth brand, with trailing twelve-month revenues of US$7.6M. Pursuant to the terms of the LOI and subject to the definitive acquisition agreement and approvals, upon the closing of the transaction, Flora will also invest CHF 2 million (Swiss Francs), or approximately US$2.2M, to try and grow the Heimat brand into new markets and to strengthen Heimat’s position in the Swiss market.
Following consummation of the transaction, Koch & Gsell will continue to be led by Founder and CEO, Roger Koch, who has been responsible for growing the Heimat brand across Switzerland and into new international markets in Europe and Asia.
As part of the transaction, Flora anticipates acquiring all of Koch & Gsell’s hemp, blended hemp and tobacco cigarette manufacturing technology. The proprietary cigarette manufacturing technology can produce over 40,000 packs of 20 cigarettes per day. The technology is patented in over 80 jurisdictions throughout the world, where Flora anticipates bringing this technology into new markets to produce hemp, cannabis, or blended cigarette products, utilizing Flora’s high-quality, low-cost cannabis input.
“The proposed acquisition of Koch & Gsell is a testament to our growth strategy. We are looking for partners that complement our distribution, enhance our supply chain and generate meaningful revenues in core markets that complement our existing portfolio of products and our premium cannabis inputs,” said Luis Merchan, CEO of Flora.
