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The Flowr Corporation and the Dawn of a New Cannabis KPI

It caught many by surprise this year when The Flowr Corporation FLWPF applied to uplist to NASDAQ.

It caught many by surprise this year when The Flowr Corporation FLWPF applied to uplist to NASDAQ.

“Flowr has made tremendous progress executing on its business plan since becoming a public company last year [October 2018 ] and we believe the Company is well positioned to pursue additional growth opportunities,” said Vinay Tolia, Flowr’s Co-CEO. “A NASDAQ listing is an important step forward for Flowr because we believe it will broaden our access to international investors as we become a truly global company.”

To be frank, the surprise comes strictly in the sense of, well, who are they? And for many investors, FLWPF is a name to know ahead of the cannabis supply glut namely for their advanced growing techniques and their interesting industry connections.

Furthermore, in an industry desperate for metrics, Flowr presents an interesting hypothesis in turning away from square-footage, and looking more closely at a more intricate yield rate.

Flowr has staked their business growth on one important cannabis Key Performance Indicator (KPI), and that is yield per square-foot. Across the industry, CEOs are broadcasting their current cultivation square-footage, and this is fair for them to do as this industry is still in its nascent stages and finding the exact calculus for estimating growth is still emerging. On the other hand, Flowr is focusing on high yields and extremely premium product.

The company’s CEO, Tom Flow, is somewhat of a legend in the space. He co-founded MedReleaf Corp. that was purchased by Aurora Cannabis ACB in July of 2018 for $2.2 billion. After that purchased finalized, Flow (who has his own merits with a patented “flood and drain” system under his name) brought over his best and brightest to Flowr to focus on premium yields that don’t need pesticides or irradiation, which essentially zaps all the flavor from a dried cannabis flower.

Cannabis KPI and Working with Hawthorne Gardening

In setting on this quest, Flow and Flowr piqued the interest of Hawthorne Gardening Co., a subsidiary of Scotts-Miracle Gro SMG. The two have a research alliance and believe they can smash the industry average of yield per square-foot. While industry averages vary, most reports show a median around 100 grams per square-foot. Flowr is targeting 450 grams and already has produced 250 consistently thanks to the early work with Hawthorne and their own in-house IP. So, as many cannabis producers consider lowering their standards to meet rising demand, Flowr is charging ahead with premium cannabis expertly cultivated.

At the end of January, Flowr announced this year that they would be selling cannabis cultivators in seed and clone form. According to the press release, Flowr will sell this extra 3.2 million clones that they don’t need for retail purposes on an annualized basis once its initial cultivation facility is completed, which the Company expects to be by the end of the third quarter of 2019.

“This is an exciting and potentially very big market for Flowr that is a natural extension of our high yield, high quality approach to cultivation,” said Co-CEO Flow. “Growing great cannabis starts with great genetics and clean healthy plants, something few companies are able to provide. As we ramp up production, we believe Flowr will be able to offer the select cultivars we use to produce our premium cannabis to cultivators globally.”

This announcement went a little under the radar, but shows another business multiple for Flowr: selling premium genetic cultivars to Licensed Producers looking to expand their premium offerings or just small-batch growers or nurseries. Now, this kind of news will not roil the markets like Canopy Growth or Tilray, but they are a small name to add to a portfolio, and may be the most consistent of the bunch in the long run.

The saying that there is no such thing as a free lunch is very much true for Robinhood.