Flora Growth Corp. SEC 10-Q Report

Flora Growth Corp., a leading cannabis company specializing in the cultivation, manufacturing, and distribution of cannabis products, has released its Form 10-Q report for the third quarter of 2025. The report provides a comprehensive overview of the company's financial performance and operational highlights, reflecting both challenges and strategic initiatives undertaken during the period.

Financial Highlights

Revenue: $11.8 million, decreased from $18.0 million in the prior year period, primarily due to lower sales from Phatebo and JustCBD.

Gross Profit: $2.9 million, down from $3.9 million, with a gross margin increase to 25% from 21% due to a favorable sales mix.

Operating Loss: $(977) thousand, improved from $(2,485) thousand, driven by a gain on the disposal and deconsolidation of insolvent subsidiaries and lower headcount-related costs.

Net Loss: $(758) thousand, improved from $(3,374) thousand, reflecting cost reductions and strategic insolvency actions.

Basic Loss Per Share: $(0.04), improved from $(0.38), reflecting the reduced net loss and increased weighted average shares outstanding.

Business Highlights

Revenue Segments: The company's revenue is divided into two main segments: House of Brands and Commercial & Wholesale. The House of Brands segment includes JustCBD, Vessel, and the newly acquired United Beverage Distribution Inc., while the Commercial & Wholesale segment is primarily driven by Phatebo's pharmaceutical distribution operations.

Geographical Performance: The company operates in multiple regions, with significant revenue contributions from the United States and Germany. The U.S. market saw a decrease in sales, particularly from JustCBD, while the German market, driven by Phatebo, also experienced a decline in revenue.

New Product Launches: During 2025, the company acquired United Beverage Distribution Inc., which specializes in cannabis-infused drinks, expanding Flora's product offerings in the beverage category.

Operational Challenges: The company faced operational challenges due to insolvency proceedings for certain Canadian and German subsidiaries, which were part of the Franchise Global Health acquisition. This strategic move was aimed at cost reduction and streamlining operations.

Regulatory Impact: Just Brands faced regulatory challenges in Florida, resulting in stop sale orders for products deemed attractive to children. This led to a settlement and a five-year revocation of its food permit in Florida, impacting the company's ability to distribute certain products in the state.

Future Outlook: The company is focused on leveraging its existing distribution networks and exploring new markets as regulatory frameworks evolve. Management is also evaluating cost reductions and alternative financing options to address cash flow challenges and support growth initiatives.

SEC Filing: Flora Growth Corp. [ FLGC ] - 10-Q - May. 13, 2025