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Flora Growth Corp. Commends President Biden on Cannabis Rescheduling Move

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On May 17, 2024, Flora Growth Corp (NASDAQ: FLGC) expressed support for President Joe Biden's decision to reschedule cannabis under U.S. federal law. CEO Clifford Starke emphasized Flora's focus on building brands both domestically and internationally, and highlighted the potential benefits of cannabis reform in the healthcare sector. The reclassification aims to move cannabis from Schedule I to Schedule III, allowing greater medical access in the U.S. Flora, with experience in European medical cannabis, looks forward to this potential market opportunity. The Justice Department will open a 60-day public comment period before finalizing the rule.

Positive
  • Flora Growth Corp supports cannabis rescheduling, aligning with potential future market trends.
  • Potential reclassification to Schedule III could increase access to medical cannabis in the U.S.
  • Flora's CEO highlights the company's strength and focus on building both U.S. and international brands.
  • Flora aims to leverage its award-winning products to create a national beverage brand.
  • Rescheduling may open new market opportunities for Flora in the U.S. medical cannabis sector.
Negative
  • The potential rule change is still subject to a 60-day public comment period, delaying immediate benefits.
  • No immediate financial data or significant short-term impacts were announced in the PR.

The rescheduling of cannabis from a Schedule I to a Schedule III substance under U.S. federal law could significantly change the landscape for cannabis companies like Flora Growth Corp. By reclassifying cannabis, the U.S. government would acknowledge its medicinal benefits, making it easier for companies to conduct research and develop new products. For Flora Growth Corp., this could open new revenue streams and partnerships, particularly in the medical cannabis sector.

Short-term: In the short term, the market may react positively to the news, anticipating future growth potential for Flora Growth Corp. Investors might see this as an opportunity to get in early on a company that could benefit from expanded market access and reduced regulatory constraints. However, the actual impact will depend on the finalization of the rule and its implementation timeline.

Long-term: Over the long term, the rescheduling could lead to increased investment in cannabis research and development, potentially resulting in a wider array of high-quality products. For Flora, this could mean a stronger foothold in both the U.S. and international markets, leveraging their expertise in consumer-packaged goods and pharmaceuticals. However, they will face intensified competition as other players also enter the space.

The move to reschedule cannabis under federal law marks a significant shift in the regulatory landscape. Currently classified as a Schedule I substance, cannabis is considered to have no accepted medical use and a high potential for abuse. Reclassifying it as a Schedule III drug places it in the same category as certain medications like anabolic steroids, which are considered to have moderate to low potential for physical and psychological dependence.

This reclassification would reduce legal barriers for cannabis research and commercialization. Flora Growth Corp. could benefit from lower regulatory hurdles, potentially reducing compliance costs and accelerating product development timelines. However, this change also necessitates careful navigation of evolving regulations to ensure compliance and leverage new opportunities effectively.

The 60-day public comment period and subsequent rule finalization process indicate that the rescheduling is not immediate and its implementation could face various challenges and delays. Investors should be aware of these uncertainties when considering the potential impacts.

Fort Lauderdale, Florida--(Newsfile Corp. - May 17, 2024) - Flora Growth Corp. (NASDAQ: FLGC) ("Flora" or the "Company"), a consumer-packaged goods leader and pharmaceutical distributor, commends President Joe Biden and his administration for moving to reschedule cannabis under U.S. federal law.

"We are pleased with the continuous momentum in the U.S. around cannabis reform. We are excited about this proposed change and believe Americans could benefit tremendously," said Clifford Starke, Chief Executive Officer.

"We are focused on building brands in the U.S. and internationally and are operating from a position of strength. We are working on creating a national beverage brand by leaning on our past award-winning products. Quality is of outmost important to Flora, and it is an area in which we intend to pursue partnerships," added Mr. Starke.

"An important area of emphasis is the anticipated impact and access to medical cannabis in the U.S., which is something that has garnered by-partisan support. Flora has a history as a player in European medical cannabis and we eagerly await the opportunity to do so in the U.S. when the time is right," concluded Mr. Starke.

President Biden called the move "monumental" and noting that it is an "important move towards reversing longstanding inequities." The Justice Department is expected to post its proposed rule to reclassify cannabis from Schedule I to Schedule III under the Controlled Substances Act in the Federal Register. A 60-day public comment period is expected before the rule is potentially finalized.

The White House announcement comes shortly after reports emerged that the Drug Enforcement Administration was about to reclassify cannabis as a Schedule III drug.

About Flora Growth Corp.

Flora Growth Corp. is a consumer-packaged goods leader and pharmaceutical distributor serving all 50 states and 28 countries with 20,000+ points of distribution around the world. For more information on Flora, visit www.floragrowth.com.

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Investor Relations:

Investor Relations ir@floragrowth.com

Clifford Starke Clifford.Starke@floragrowth.com

Media:

media@floragrowth.com

Cautionary Statement Concerning Forward-Looking Statements

This press release contains "forward-looking statements," as defined by U.S. federal securities laws. Forward-looking statements reflect Flora's current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words "believe," "expect," "anticipate," "will," "could," "would," "should," "may," "plan," "estimate," "intend," "predict," "potential," "continue," and the negatives of these words and other similar expressions generally identify forward-looking statements. These forward-looking statements include, but are not limited to, statements about: legislative developments in the United States and the potential impacts thereof, and the impact of new product launches and partnerships. Such forward-looking statements are subject to various and risks and uncertainties, including those described under section entitled "Risk Factors" in Flora's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the "SEC") on March 28, 2024, as such factors may be updated from time to time in Flora's periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov/edgar. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in Flora's filings with the SEC. While forward-looking statements reflect Flora's good faith beliefs, they are not guarantees of future performance. Flora disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based on information currently available to Flora (or to third parties making the forward-looking statements).

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/209654

FAQ

What is Flora Growth Corp's stance on cannabis rescheduling?

Flora Growth Corp supports President Biden's decision to reschedule cannabis under U.S. federal law.

What potential benefits could result from cannabis rescheduling to Schedule III?

Rescheduling to Schedule III could increase access to medical cannabis in the U.S. and open new market opportunities.

How does Flora Growth Corp plan to capitalize on the cannabis rescheduling?

Flora Growth Corp plans to build both U.S. and international brands, focusing on creating a national beverage brand and entering the U.S. medical cannabis market.

What experience does Flora Growth Corp have in the medical cannabis industry?

Flora Growth Corp has experience as a player in the European medical cannabis market and aims to apply this expertise in the U.S.

What is the next step in the cannabis rescheduling process?

The Justice Department will post the proposed rule in the Federal Register, followed by a 60-day public comment period.

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