The price of shares of cannabis operator Flora Growth (FLGC) has surged 278.1% over the past month on optimism surrounding its strategic deal with Avaria and the Colombian government’s updated cannabis law. However, investors’ concerns regarding the company’s uncertain growth potential and negative profit margin could cause its shares to retreat in the near term. So, let’s discuss.Canadian cannabis operator Flora Growth Corp. (FLGC) cultivates and supplies cannabis products to medical dispensaries and pharmacies under Mind Naturals, Flora Lab, Mambe, and other brands worldwide. The Toronto-based company went public on the Nasdaq on May 11. But its shares slipped more than 4% on their first trading day.
However, investors’ bullish sentiment surrounding the Columbian government’s revision of cannabis laws to allow access to cannabis products by Colombians has driven FLGC’s shares to a 278.1% gain over the past month. Global cannabis supplier FLGC is uniquely positioned to benefit from this legislative change.
But the company has yet to announce its earnings since going public. Furthermore, it is not yet profitable in a competitive cannabis landscape. Although a strategic partnership with Avaria and its plans to move its corporate headquarters to Miami from Toronto could bode well for the stock, uncertainty about its growth prospects could unnerve investors.