Interview with Steve Klein (FLOWR)
On September 13, 2018, Steve Klein of FLOWR will speak at Kahner Global's Cannabis Private Investment Summit in New York City. This event gathers industry leaders and investors for a day of collaboration and networking.
Steve Klein is Chairman and Chief Strategist of The Flowr Company, a Canadian licensed producer focused on premium flower production. Flowr also has an exclusive cannabis R&D alliance with Hawthorne Gardening Company, a division of Scotts Miracle Gro.
This interview has been edited for length and clarity.
How did you get into the cannabis business?
I’ve run a family office in New York for many years investing in everything from hotels to hedge funds to tech start-ups. We started looking at investing in cannabis when U.S. states started legalizing many years ago and that led to me meeting Tom Flow. Tom is one of the pioneers of the Canadian industry having co-founded Med-Releaf. After learning about Tom, his team’s capabilities and the Canadian market, I realized I didn’t want to make another cannabis investment, I wanted to start a business with Tom. We’ve been building Flowr together for the past couple of years and are now quickly ramping up production.
What sets Flowr apart from the other Canadian LPs?
The big differentiators for Flowr are our rare ability to grow premium product and do it efficiently at a profit. That focus drives everything we do.
Tom and his team have the ability to build cultivation facilities that are super clean – they meet pharmaceutical manufacturing standards – and run very efficiently. So the cannabis we grow will meet Health Canada purity standards. Most other growers aren’t able to grow that cleanly and they have to treat their flower with gamma irradiation to kill mold and other prohibited matter. Irradiation cleans the product enough to meet health standards but it really hurts the taste and smell. Flowrs’ plants won’t be irradiated, so we’ll provide a much more aesthetically pleasing experience.
That high quality will allow us to stay on the premium end of the spectrum and our efficiency at growing will keep costs low. Those two inputs will lead us to be a very high margin business. As we ramp up to full capacity in our first facility for 2019, we’re scaling that model and expect to be one of the most profitable cultivators and one of the largest LPs.
The holy grail in this business is growing quality flower at scale and at a profit. That’s what we’re building Flowr to do.
What markets are you going to serve?
We think there is going to be a shortage of high quality flower in Canada in both the medicinal and recreational markets. We’re focusing on meeting the demand there initially. Flowr has agreements in place with several of the major medicinal suppliers and recently announced an agreement with British Columbia for recreational use there.
Further down the road, there are lots of opportunities. First and foremost, aligning with other provinces for retail distribution where Flowr will command a premium price for the premium quality product we will be selling. Given Canada's national legalization, Canadian growers are able to export to other countries with legal cannabis programs and we are looking at opportunities for Flowr in export. Eventually, as other form factors become legal to produce in Canada, we’ll look at those products in order to align with and create brands that share our values. We also see massive opportunities emerging from our R&D partnerships.
You recently announced a partnership with Scotts Miracle-Gro. Tell us about that.