New York (CNN Business) – Most cannabis companies that list their stocks in the United States grow their products in indoor greenhouses, often in Canada.
But a company named Flora Growth that went public on the Nasdaq on Tuesday is taking a different approach. Although headquartered in Toronto, its agricultural operations are in Colombia. And it cultivates cannabis the old-fashioned way: outdoors.Why? It’s a lot cheaper.It costs Flora Growth just 6 cents to cultivate a gram of dry flower for medicinal grade cannabis in Colombia, compared to about $1.25 a gram indoors in North America, CEO Luis Merchan said in an interview with CNN Business before the IPO.
Yet other companies aren’t racing to South America, he said, because it takes time for companies to get approval from the Colombian government for licenses and registration to set up cannabis facilities.
Major firms selling in the US and Canada also usually prefer to have their products grown closer to home. For example, Canopy Growth (CGC), a leading Canadian cannabis company whose major investor is Corona-owner Constellation Brands (STZ), announced last year it was ending cultivation operations in Colombia in order to focus more on local suppliers around the globe.