November 8, 2019
Damian Lopez
Chief Executive Officer
Flora Growth Corp.
65 Queen Street West, Suite 800
Toronto, Ontario M5H 2M5
Re: Flora Growth Corp.
Offering Statement on Form 1-A
Filed on October 11, 2019
File No. 024-11096
Dear Mr. Lopez:
We have reviewed your offering statement and have the following
comments. In some
of our comments, we may ask you to provide us with information so we may better
understand
your disclosure.
Please respond to this letter by amending your offering statement and
providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response. After reviewing any amendment to your offering statement and the
information you
provide in response to these comments, we may have additional comments.
Form 1-A Filed on October 11, 2019
Summary, page 5
1. Please revise your Summary to explain/clarify the status of your business
operations and
your funding. In terms of your operations, it should be clear whether you
have
commenced growing cannabis on a commercial scale, whether you have
produced oil
extracts (of any grade), and whether you presently have the facilities,
labor, and
agreements with "large channel distributors" necessary to achieve your
stated business
objectives. In terms of funding, please highlight the going concern
opinion from your
auditor and, if true, your reliance on offering proceeds to fund your
anticipated business
operations.
Damian Lopez
FirstName LastNameDamian Lopez
Flora Growth Corp.
Comapany 8, 2019
November NameFlora Growth Corp.
Page 2
November 8, 2019 Page 2
FirstName LastName
Company Information, page 6
2. Please place your statement that your subsidiary is a fully licensed
and permitted
cultivator, producer and distributor of CBD medical cannabis in
Colombia in proper
context by disclosing the number of similarly-licensed companies in
Colombia. In light of
your disclosure concerning international export, please indicate
whether you are fully
licensed to (i) export cannabis derivatives from Columbia and (ii)
import derivatives into
any foreign countries.
3. Please expand your disclosure to briefly explain what you mean by the
Vendors' 10% non-
dilutive free carried interest in Cosechemos.
Description of Property, page 6
4. Please revise to disclose the duration of the lease and the option
agreement.
Our Products and Services, page 30
5. We note your disclosure on page 6 indicating that you intend to pursue
international
export; however, your Description of Business does not discuss any
plans for exporting
your future products. Accordingly, please revise to discuss your plans
for exporting
products internationally. To the extent that international export is
not a near term
objective, then please revise the Summary accordingly.
Independent Auditor's Report, page F-3
6. Please request Cosechemos YA S.A.S.'s independent auditor to revise
their audit report to
clarify, if true, that the financial statements comply with the
International Financial
Reporting Standards (IFRS) as issued by the the International
Accounting Standards
Board (IASB). Refer to paragraph (a)(2) of Part F/S of Form 1-A.
Unaudited Pro Forma Condensed Consolidated Financial Statements as of June 30,
2019, page
F-62
7. In light of the fact that the Offering is a "best efforts" offering
with no minimum
requirement, your adjustment to include estimated proceeds does not
appear factually
supportable. As such, please remove the pro forma adjustments
reflected in Note 5(a)
and 5(b) which record the receipt of $50,000,000 in offering proceeds
and $1,143,000 of
estimated offering costs and revise the disclosures in Note 6,
accordingly.
Exhibits
8. We refer to Section 2.7 of the Subscription Agreement filed in Exhibit
4.1 Please tell us
how items (i), (ii) and (iv) are consistent with the offering circular
disclosures and Section
14 of the Securities Act.
9. Please refile Exhibit 6.13 so that it includes the five exhibits
listed in Section 31.
Damian Lopez
Flora Growth Corp.
November 8, 2019
Page 3
10. Please have counsel revise its Exhibit 12.1 opinion to opine that the
Warrants will
constitute valid and binding obligations of the Company enforceable
against the Company
in accordance with their terms. Also, please have counsel opine on the
legality of the
units. For guidance, please see the Division of Corporation Finance
Staff Legal Bulletin
No. 19 (Oct. 14, 2011).
We will consider qualifying your offering statement at your request. If
a participant in
your offering is required to clear its compensation arrangements with FINRA,
please have
FINRA advise us that it has no objections to the compensation arrangements
prior to
qualification.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff. We also remind you that, following qualification of your
Form 1-A, Rule 257
of Regulation A requires you to file periodic and current reports, including a
Form 1-K which
will be due within 120 calendar days after the end of the fiscal year covered
by the report.
You may contact Jacob Luxenburg at 202-551-2339 or Jeanne Baker at
202-551-3691 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Christine Westbrook at 202-551-5019 or Joseph McCann at 202-551-6262
with any other
questions.
Sincerely,
FirstName LastNameDamian Lopez
Division of
Corporation Finance
Comapany NameFlora Growth Corp.
Office of Life
Sciences
November 8, 2019 Page 3
cc: Rebecca G. DiStefano
FirstName LastName