EXHIBIT 99.2

Flora Growth Corp.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three and nine months ended September 30, 2022 and 2021

(Unaudited)

(Expressed in United States Dollars)

Flora Growth Corp.
Interim Condensed Consolidated Statements of Financial Position
(Unaudited - Prepared by Management)
(in thousands of United States dollars)
As at:		September 30, 2022				December 31, 2021
ASSETS
Current
Cash		$	5,900			$	37,614
Restricted cash			1				2
Trade and amounts receivable (Note 3)			4,392				5,324
Loans receivable and advances			255				273
Prepaid expenses			1,990				1,700
Biological assets (Note 4)			91				37
Inventory (Note 5)			10,280				2,993
Total current assets			22,909				47,943
Non-current
Property, plant and equipment (Note 6)			4,349				3,750
Right of use assets (Note 6 and 11)			3,258				1,229
Intangible assets (Note 9)			12,652				9,736
Goodwill (Note 9)			28,856				20,054
Investments (Note 7)			839				2,670
Other Assets			271				97
Total assets		$	73,134			$	85,479
LIABILITIES
Current
Trade payables and accrued liabilities		$	7,559			$	5,628
Current portion of long term debt			5				18
Current portion of lease liability (Note 11)			1,102				412
Other accrued liabilities			18				61
Total current liabilities			8,684				6,119
Non-current
Non-current debt			79				-
Non-current lease liability (Note 11)			2,137				908
Deferred tax (Note 16)			1,531				1,511
Other long term liabilities (Note 8)			6,537				-
Total liabilities			18,968				8,538
SHAREHOLDERS' EQUITY
Share capital (Note 12)			120,160				102,428
Options (Note 13)			6,242				3,712
Warrants (Note 14)			9,276				10,670
Accumulated other comprehensive loss			(2,723	)			(1,108	)
Deficit			(78,457	)			(38,536	)
Non-controlling interest			(332	)			(225	)
Total shareholders' equity			54,166				76,941
Total liabilities and shareholders' equity		$	73,134			$	85,479

Nature of operations (Note 1); Provisions, commitments and contingencies (Note 15); Subsequent events (Note 22)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Page 2

Flora Growth Corp.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
(Unaudited - Prepared by Management)
(in thousands of United States dollars, except per share amounts which are in thousands of shares)
		For the three months ended September 30, 2022				For the three months ended September 30, 2021				For the nine months ended September 30, 2022				For the nine months ended September 30, 2021
Revenue (Note 21)		$	10,765			$	2,093			$	25,682			$	4,211
Cost of sales			5,936				1,474				14,351				2,580
Gross profit before fair value adjustments			4,829				619				11,331				1,631
Unrealized gain on changes in fair value of biological assets (Note 4)			152				-				198				-
Realized fair value amounts included in inventory sold (Note 4)			(10	)			-				(12	)			-
Gross Profit			4,971				619				11,517				1,631
Operating Expenses
Consulting and management fees			3,237				1,905				8,480				4,167
Professional fees			802				904				2,898				1,670
General and administrative			1,186				610				3,615				2,091
Promotion and communication			2,195				34				6,914				1,214
Travel expenses			288				140				889				283
Share based compensation (Note 13)			139				393				2,994				488
Research and development			170				(20	)			592				65
Depreciation and amortization (Notes 6 and 9)			985				67				2,697				186
Bad debt expense (Note 3)			631				-				1,036				100
Goodwill impairment (Notes 9 and 10)			-				-				16,000				-
Other expenses (income), net			346				198				1,524				131
Total operating expenses			9,979				4,231				47,639				10,395
Operating Loss			(5,008	)			(3,612	)			(36,122	)			(8,764	)
Interest expense			75				57				144				121
Foreign exchange loss (gain)			128				(38	)			328				(116	)
Unrealized loss from changes in fair value (Note 7 and Note 8)			2,177				-				3,510				-
Net loss before income taxes			(7,388	)			(3,631	)			(40,104	)			(8,769	)
Income tax benefit (Note 16)			-				-				-				-
Net loss for the period		$	(7,388	)		$	(3,631	)		$	(40,104	)		$	(8,769	)
Other comprehensive loss
Exchange differences on foreign operations			1,048				463				1,615				663
Total comprehensive loss for the period		$	(8,436	)		$	(4,094	)		$	(41,719	)		$	(9,432	)
Net loss attributable to:
Flora Growth Corp.		$	(7,358	)		$	(3,608	)		$	(39,969	)		$	(8,705	)
Non-controlling interests			(30	)			(23	)			(135	)			(64	)
Comprehensive loss attributable to:
Flora Growth Corp.		$	(8,406	)		$	(4,071	)		$	(41,584	)		$	(9,368	)
Non-controlling interests			(30	)			(23	)			(135	)			(64	)
Basic and diluted loss per share attributable to Flora Growth Corp.		$	(0.10	)		$	(0.08	)		$	(0.54	)		$	(0.21	)
Weighted average number of common shares outstanding - basic and diluted (Note 17)			76,611				44,199				74,335				41,152

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Page 3

Flora Growth Corp.
Interim Condensed Consolidated Statement of Shareholders' Equity (Deficiency)
(Unaudited - Prepared by Management)
(in thousands of United States dollars, except for share amounts which are in thousands of shares)
		Common Shares								Options				Warrants				Accumulated other comprehensive (loss) income				Accumulated Deficit				Non-Controlling interest (Deficiency)				Shareholders' Equity (Deficiency)
		#				$				$				$				$				$								$
Balance, December 31, 2020			38,355				27,254				2,396				3,961				39				(17,287	)			(113	)			16,250
Initial public offering			3,333				16,667				-				-				-				-				-				16,667
Initial public offering issuance costs			-				(3,145	)			-				1,320				-				-				-				(1,825	)
Regulation A and Other Offerings (Note 16)			55				267				-				-				-				-				-				267
Common shares issued for investments			225				1,125				-				-				-				-				-				1,125
Share issuance costs			-				(2,264	)			-				-				-				-				-				(2,264	)
Warrants exercised			3,769				11,114				-				(757	)			-				-				-				10,357
Warrants cancelled			-				9				-				(9	)			-				-				-				-
Options issued			-				-				488				-				-				-				-				488
Other comprehensive loss – exchange differences on foreign operations			-				-				-				-				(663	)			-				-				(663	)
Current year net loss attributable to Flora			-				-				-				-				-				(8,705	)			(64	)			(8,769	)
Balance, September 30, 2021			45,737				51,027				2,884				4,515				(624	)			(25,992	)			(177	)			31,633
Balance, December 31, 2021			65,517				102,428				3,712				10,670				(1,108	)			(38,536	)			(225	)			76,941
Share repurchase (Note 12)			(368	)			(255	)			-				-				-				-				-				(255	)
Common shares issued for business combinations (Notes 8 and 12)			9,500				14,697				-				-				-				-				-				14,697
Common shares issued for other agreements (Note 12)			811				1,470				84				-				-				-				-				1,554
Acquisition of noncontrolling interest (Note 8)			131				220				63				-				-				(365	)			28				(54	)
Options issued (Note 13)			-				-				3,567				-				-				-				-				3,567
Options exercised (Note 13)			545				102				(20	)			-				-				-				-				82
Options expired/cancelled (Note 13)			-				-				(1,164	)			-				-				413				-				(751	)
Restricted stock granted (Note 13)			770				95				-				-				-				-				-				95
Warrants exercised (Note 14)			473				138				-				(41	)			-				-				-				97
Warrants expired/cancelled (Note 14)			-				1,353				-				(1,353	)			-				-				-				-
Share issuance costs			-				(88	)			-				-				-				-				-				(88	)
Other comprehensive loss – exchange differences on foreign operations			-				-				-				-				(1,615	)			-				-				(1,615	)
Current year net loss attributable to Flora			-				-				-				-				-				(39,969	)			(135	)			(40,104	)
Balance, September 30, 2022			77,379				120,160				6,242				9,276				(2,723	)			(78,457	)			(332	)			54,166

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Page 4

Flora Growth Corp.
Consolidated Statement of Cash Flows
(Unaudited - Prepared by Management)
(in thousands of United States dollars)
		For the nine months ended September 30, 2022				For the nine months ended September 30, 2021
Cash flows from operating activities:
Net loss		$	(40,104	)		$	(8,769	)
Adjustments to net loss:
Depreciation and amortization			2,697				186
Stock-based compensation			3,184				488
Impairments			16,000				-
Changes in fair value of investments, biological assets and liabilities			3,312				-
Bad debt expense			1,036				100
Interest expense			123				18
Income tax benefit			-				-
Income tax (paid) received			-				-
			(13,752	)			(7,977	)
Net change in non-cash working capital:
Trade and other receivables			909				(9,692	)
Inventory			(884	)			(1,025	)
Prepaid expenses and other assets			353				(1,596	)
Trade payables and accrued liabilities			(458	)			1,005
Net cash used in operating activities			(13,832	)			(19,285	)
Cash flows from financing activities:
Common shares issued			-				18,067
Equity issue costs			(88	)			(2,431	)
Exercise of warrants and options			179				10,357
Repayments of lease liability			(707	)			(97	)
Common shares repurchased			(255	)			-
Interest paid			(126	)			-
Loan borrowing (repayments)			66				(247	)
Net cash (used) provided by financing activities			(931	)			25,649
Cash flows from investing activities:
Loans provided			-				(268	)
Loan repayments received			-				224
Purchases of property, plant and equipment and other assets			(948	)			(1,472	)
Purchase of investments			-				(3,653	)
Business and asset acquisitions, net of cash acquired			(15,388	)			(1,284	)
Net cash used in investing activities			(16,336	)			(6,453	)
Effect of exchange rate on changes on cash			(615	)			(613	)
Change in cash during the period			(31,714	)			(702	)
Cash and cash equivalents at beginning of period			37,614				15,523
Cash and cash equivalents at end of period		$	5,900			$	14,821
Supplemental disclosure of non-cash activities
Right of use assets and lease liabilities acquired (Note 11)		$	2,042			$	-
Common shares issued for business combinations (Notes 8)			14,917				-

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Page 5

Flora Growth Corp. Notes to the interim condensed consolidated financial statements (unaudited) For the nine months ended September 30, 2022 and September 30,2021 (United States dollars, except shares and per share amounts)

1. NATURE OF OPERATIONS

Flora Growth Corp. (the “Company” or “Flora”) was incorporated under the laws of the Province of Ontario, Canada on March 13, 2019. The Company is a manufacturer of global cannabis products and brands, building a connected, design-led collective of plant-based wellness and lifestyle brands. The Company’s registered office is located at 365 Bay Street, Suite 800, Toronto, Ontario, M5H 2V1, Canada and our principal place of business in the United States is located at 3406 SW 26^th Terrace, Suite C-1, Fort Lauderdale, Florida 33312.

These interim condensed consolidated financial statements have been prepared on a going concern basis, meaning that the Company will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations.

2. BASIS OF PRESENTATION

Statement of compliance

These interim condensed consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards (“IFRS”) and International Accounting Standards 34, Interim Financial Reporting (“IAS 34”), issued by the International Accounting Standards Board (“IASB”). These interim condensed consolidated financial statements do not include all notes of the type normally included within the annual financial statements and should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2021 included in our Annual Report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”), which have been prepared in accordance with IFRS issued by the IASB and interpretations issued by the IFRS Interpretations Committee (“IFRIC”).

These consolidated financial statements were approved and authorized for issuance by the Board of Directors of the Company on November 22, 2022.

Basis of consolidation

These interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions were eliminated on consolidation. Subsidiaries are entities the Company controls when it is exposed, or has rights, to variable returns from its involvement in the entity and can affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are included in the consolidated financial results of the Company from the date of acquisition up to the date of disposition or loss of control. As at September 30, 2022, the Company had the following subsidiaries:

Subsidiaries		Country of incorporation		Ownership		Functional currency
Cosechemos YA S.A.S.		Colombia		90%		Colombia Peso (COP)
Flora Growth Corp. Sucursal Colombia		Colombia		100%		Colombia Peso (COP)
Hemp Textiles & Co. LLC		United States		100%		United States Dollar (USD)
Hemp Textiles & Co. S.A.S.		Colombia		100%		Colombia Peso (COP)
Flora Beauty LLC		United States		100%		United States Dollar (USD)
Flora Beauty LLC Sucursal Colombia		Colombia		100%		Colombia Peso (COP)
Kasa Wholefoods Company S.A.S.		Colombia		90%		Colombia Peso (COP)
Kasa Wholefoods Company LLC		United States		100%		United States Dollar (USD)
Grupo Farmaceutico Cronomed S.A.S.		Colombia		100%		Colombia Peso (COP)
Labcofarm Laboratorios S.A.S.		Colombia		100%		Colombia Peso (COP)
Breeze Laboratory S.A.S.		Colombia		100%		Colombia Peso (COP)
Vessel Brand Inc.		United States		100%		United States Dollar (USD)
Just Brands LLC		United States		100%		United States Dollar (USD)
Just Brands International LTD		United Kingdom		100%		British Pound (GBP)
High Roller Private Label LLC		United States		100%		United States Dollar (USD)
Flora Growth US Holdings Corp.		United States		100%		United States Dollar (USD)
Flora Growth Management Corp.		United States		100%		United States Dollar (USD)
Cardiff Brand Corp.		United States		100%		United States Dollar (USD)
Keel Brand Corp.		United States		100%		United States Dollar (USD)
Flora Growth F&B Corp.		United States		100%		United States Dollar (USD)
Masaya Holding Corp		United States		100%		United States Dollar (USD)

Page 6

Flora Growth Corp. Notes to the interim condensed consolidated financial statements (unaudited) For the nine months ended September 30, 2022 and September 30,2021 (United States dollars, except shares and per share amounts)

Basis of measurement

The interim condensed consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments that are measured at fair value and biological assets as explained in the accounting policies included in the audited consolidated financial statements of the Company for the year ended December 31, 2021. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

The unaudited interim condensed consolidated financial statements are presented in United States dollars (“$”) unless otherwise noted.

Significant Accounting Policies and Critical Judgments and Estimation Uncertainties

The interim condensed consolidated financial statements were prepared using the same accounting policies, judgments, estimates and assumptions as those used in the Company’s consolidated financial statements for the year ended December 31, 2021, except as noted below for the following new significant transactions that occurred in 2022.

Contingent Purchase Consideration

Contingent consideration is measured at its acquisition date fair value and is included as part of the consideration transferred in a business combination, subject to the applicable terms and conditions. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as a liability is remeasured at subsequent reporting dates with the corresponding gain or loss recognized in profit or loss. Management exercises judgment to determine the classification of contingent consideration as equity or liability based on the terms of the agreement and potential for the consideration to result in a cash outflow by the Company. Fair value estimates are determined using appropriate valuation techniques based on the nature of the terms in the purchase agreement.

3. TRADE AND AMOUNTS RECEIVABLE

The Company’s trade and amounts receivable are recorded at amortized cost. The trade and other receivables balance as at September 30, 2022 and December 31, 2021 consists of trade accounts receivable, amounts recoverable from the Government of Canada for Harmonized Sales Taxes (“HST”) and other receivables.

		September 30, 2022				December 31, 2021
Thousands of United States dollars
Trade accounts receivable		$	5,311			$	5,565
Allowance for expected credit losses			(2,219	)			(1,252	)
HST receivable			468				259
Other receivables			832				752
Total		$	4,392			$	5,324

Changes in the trade accounts receivable allowance in the nine months ended September 30, 2022 primarily relate to establishing allowances for expected credit losses. There were no write-offs of trade receivables during the nine months ended September 30, 2022. The Company has no amounts written-off that are still subject to collection enforcement activity as at September 30, 2022. There was an additional $0.3 million of expected credit losses recorded in other receivables as at September 30, 2022. The Company’s aging of trade accounts receivable is as follows:

		September 30, 2022
Thousands of United States dollars
Current		$	1,409
1-30 Days			643
31-60 Days			499
61-90 Days			336
91-180 Days			404
180+ Days			2,020
Total trade receivables		$	5,311

Page 7

Flora Growth Corp. Notes to the interim condensed consolidated financial statements (unaudited) For the nine months ended September 30, 2022 and September 30,2021 (United States dollars, except shares and per share amounts)

4. BIOLOGICAL ASSETS

The Company’s biological assets consist of cannabis plants throughout the growth cycle including propagation, vegetative and flowering stages. Cannabis plants cease being biological assets upon harvest when the fair value at time of harvest is transferred to harvested cannabis inventory. The Company has no biological assets with title restricted or pledged as collateral, and no significant commitments for development or acquisition of biological assets as at September 30, 2022.

The changes in the carrying value of biological assets are as follows:

Thousands of United States Dollars
		THC Cannabis				CBD Cannabis				Total
Opening balance at December 31, 2021		$	-			$	37			$	37
Changes in fair value less cost to sell due to biological transformation			74				124				198
Transferred to harvested cannabis inventory upon harvest			-				(144	)			(144	)
Ending balance at September 30, 2022		$	74			$	17			$	91

The valuation of biological assets is based on an income approach (Level 3) in which the fair value at the point of harvesting is estimated based on selling prices less the costs to sell. For in-process biological assets (growing plants), the fair value at the point of harvest is adjusted based on the stage of growth at period-end. Harvested cannabis is transferred from biological assets at their fair value at harvest to harvested cannabis within inventory.

Significant inputs and assumptions used in determining the fair value of cannabis plants are as follows as at September 30, 2022:

		THC Cannabis				CBD Cannabis
Average selling price per gram  (1)		$	0.21			$	0.07
Weighted average yield (grams per plant)  (2)			27.38				27.38
Standard cost per gram to complete production  (3)		$	0.06			$	0.04

_______ 

(1)	Average selling price per gram represents estimated selling price of dried cannabis end products net of excise taxes, where applicable, for the period for all strains of cannabis, which is expected to approximate future selling prices. Increasing this amount results in an increase in fair value.
(2)	Weighted average yield represents the weighted average number of grams of dried cannabis inventory expected to be harvested from each cannabis plant. Increasing this amount results in an increase in fair value.
(3)	Standard cost per gram to complete production is based on estimated future production costs incurred divided by estimated grams produced in the period. Increasing this amount results in a decrease in fair value.

Changes in the assumptions above of 10% would not have a significant impact on the fair value of biological assets as at September 30, 2022.

As at September 30, 2022:

		THC Cannabis				CBD Cannabis
Weighted average fair value less cost to complete and cost to sell a gram of dried cannabis		$	0.15			$	0.04
Expected yield from biological assets (total grams)			248,863				357,159
Weighted average stage of growth			29.2	%			59.7	%

For the nine months ended September 30, 2022, the Company’s biological assets produced the following when harvested:

		THC Cannabis				CBD Cannabis
Kilograms of dried cannabis			-				1,241

Page 8

Flora Growth Corp. Notes to the interim condensed consolidated financial statements (unaudited) For the nine months ended September 30, 2022 and September 30,2021 (United States dollars, except shares and per share amounts)

5. INVENTORY

Inventory is comprised of the following as at September 30, 2022 and December 31, 2021:

Thousands of United States dollars		September 30, 2022				December 31, 2021
Raw materials and supplies		$	2,672			$	899
Harvested cannabis			146				35
Work in progress			447				97
Finished goods			7,015				1,962
Total		$	10,280			$	2,993

6. PROPERTY, PLANT AND EQUIPMENT

In Thousands of United States dollars		Construction in progress				Machinery and Office equipment				Buildings				Vehicles				Land				Subtotal				Right of use assets				Total
Cost at December 31, 2021		$	905			$	1,991			$	928			$	37			$	112			$	3,973			$	1,532			$	5,505
Additions			317				261				31				17				295				921				2,042				2,963
Business combinations (Note 8)			-				506				-				30				-				536				772				1,308
Foreign exchange translation			(141	)			(220	)			(115	)			(6	)			(45	)			(527	)			(119	)			(646	)
Cost as at September 30, 2022			1,081				2,538				844				78				362				4,903				4,227				9,130
Accumulated depreciation
As at December 31, 2021			-				(169	)			(44	)			(10	)			-				(223	)			(303	)			(526	)
Depreciation			-				(340	)			(66	)			(4	)			-				(410	)			(716	)			(1,126	)
Disposals			-				28				-				-				-				28				-				28
Foreign exchange translation			-				37				12				2				-				51				50				101
Accumulated depreciation as at September 30, 2022			-				(444	)			(98	)			(12	)		$	-				(554	)			(969	)			(1,523	)
Carrying value
As at December 31, 2021			905				1,822				884				27				112				3,750				1,229				4,979
As at September 30, 2022		$	1,081			$	2,094			$	746			$	66			$	362			$	4,349			$	3,258			$	7,607

7. LONG-TERM INVESTMENTS

As at September 30, 2022, the Company’s long-term investments consist of common shares and warrants to purchase additional common shares in an early stage European cannabis company. In 2021, the Company purchased common shares from the investee for Euro 2.0 million ($2.4 million), purchased its first tranche of warrants from existing investors in exchange for 225,000 common shares of the Company, and obtained a second tranche of warrants from the investee as an inducement to exercise some of the first tranche of warrants. As at September 30, 2022, the Company owns approximately 9.6% of the investee, or approximately 8.6% on a diluted basis including exercisable warrants of the Company and other investors.

The warrants allow the holder to purchase one common share of the investee for CAD 0.30 ($0.22) for the first tranche, and CAD 1.00 ($0.73) for the second tranche. The warrants were immediately exercisable and expire February 1, 2023.

The Company’s cost of the investments was recorded based on the fair value of the consideration exchanged as at the respective transaction dates. The investee is not a publicly listed entity and has no active quoted prices for its common shares or warrants. Subsequent remeasurements are recorded as FVPL as indicated on the unrealized loss from changes in fair value caption on the statement of loss and comprehensive loss. The Company estimated the fair value of the investments as at September 30, 2022 using Level 3 inputs of the fair value hierarchy with the fair value of the investee common shares at $0.22, the first tranche warrants at $0.05, and the second tranche warrants at less than $0.01.

Page 9

Flora Growth Corp. Notes to the interim condensed consolidated financial statements (unaudited) For the nine months ended September 30, 2022 and September 30,2021 (United States dollars, except shares and per share amounts)

The investee common shares were valued considering price to book value and price to tangible book value of the investee (3.6 and 4.8, respectively) as well as comparable guideline publicly traded companies at the time of initial investment. These initial investment multiples were compared to the guideline public company multiples observed as at September 30, 2022 (1.6 price to book value and 2.2 price to tangible value), with these updated valuation multiples applied to the investee’s estimated book value. The Company also considered the status of the investee’s milestones between the purchase date and year-end for indicators of change in value.

The fair value of the warrants was developed using a Black-Scholes model for each tranche with the following assumptions:

		Warrants CAD 0.30 exercise price				Warrants CAD 1.00 exercise price
Share price		$	0.22			$	0.22
Exercise price		$	0.22			$	0.73
Volatility			100	%			100	%
Risk-free interest rate			3.8	%			3.8	%
Dividend yield			0.0	%			0.0	%
Expected term in years			0.3				0.3
Fair value		$	0.05			$	0.00
Quantity owned			1,666,667				333,333
Fair value		$	83,000			$	1,000

The share price is based on the calculated value of the investee’s common shares as discussed above. The volatility considers actual volatility of comparable guideline public companies.

A schedule of the Company’s long-term investments activity is as follows:

		Investee common shares				Warrants CAD 0.30 exercise price				Warrants CAD 1.00 exercise price
Financial asset hierarchy level		Level 3				Level 3				Level 3				Total
Thousands of United States dollars		$				$				$				$
Balance at December 31, 2021			1,987				625				58				2,670
Loss on changes in fair value			(1,232	)			(542	)			(57	)			(1,831	)
Balance at September 30, 2022			755				83				1				839

The loss on changes in fair value appear in the unrealized loss from changes in fair value caption in the statement of loss and comprehensive loss.

As a sensitivity assessment to the fair value calculations, a 10% change in the valuation multiples applied to the investee common shares results in a 10% change in the fair value as at September 30, 2022 of $76,000. Applying a 10% change in share price to the warrants results in an approximately $22,000 change in fair value, and a 10% change in volatility of approximately $8,000.

8. ASSET ACQUISITIONS AND BUSINESS COMBINATIONS

Just Brands LLC and High Roller Private Label LLC (collectively "JustCBD") business combination

On February 24, 2022, Flora Growth U.S. Holdings Corp., a wholly-owned subsidiary of the Company, completed the acquisition of 100% of the outstanding equity interests in each of (i) Just Brands LLC and (ii) High Roller Private Label LLC for total purchase consideration of $34.4 million. JustCBD is a manufacturer and distributor of consumable cannabinoid products, including gummies, tinctures, vape cartridges, and creams. JustCBD is based in Florida in the United States and was formed in 2017. The Company acquired JustCBD to expand its product offerings, accelerate its revenue growth, expand its customer and distribution footprints in the United States and for the acquisition of human capital through JustCBD's management team.

Page 10

Flora Growth Corp. Notes to the interim condensed consolidated financial statements (unaudited) For the nine months ended September 30, 2022 and September 30,2021 (United States dollars, except shares and per share amounts)

The purchase consideration was comprised of $16.0 million of cash, less $0.2 million returned to the Company in August 2022 due to final calculated closing working capital falling short of the target working capital, 9.5 million common shares of the Company valued at $14.7 million, inclusive of a 15% fair value discount for the required six-month holding period of the shares, and $4.0 million of contingent purchase consideration. The contingent purchase consideration is based on a clause in the purchase agreement that provides that if at any time during the 24 months following the acquisition date, the five-day volume weighted average price (“VWAP”) per share of the Company's common shares as quoted on the Nasdaq Capital Market fails to equal or exceed $5.00, then the Company shall issue a number of additional common shares to the sellers equal to the difference between (x) a fraction, the numerator of which is $47.5 million and the denominator of which is the highest five day VWAP at any point during the 24 months following the closing and (y) the 9.5 million common shares delivered to the sellers at the closing. In no event shall the Company be required to issue more than 3.65 million common shares unless it shall have obtained the consent of the Company’s shareholders to do so. In the event the Company is required to deliver in excess of 3.65 million shares to the sellers (”Excess Shares”) and the Company shall not have obtained shareholder consent, the Company may deliver cash to the sellers in lieu of such Excess Shares determined by a formula set forth in the purchase agreement. The contingent purchase consideration is classified as a financial liability within other long-term liabilities on the statement of financial position as the Company may be required to settle any amounts due in cash instead of common shares if the Company's common shareholders do not provide requisite shareholder approval to issue additional common shares.

The fair value of the contingent purchase consideration at February 24, 2022 was determined using a Monte Carlo simulation incorporating Brownian motion with 100,000 trials through a binomial lattice model. The significant inputs to the valuation included the two-year time period, the Company's closing share price at February 24, 2022 ($1.82), estimated Company common share volatility (100%), and risk free rate of 1.5% to discount the ending result to present value.

The fair value of the contingent purchase consideration at September 30, 2022 was determined using a Monte Carlo simulation incorporating Brownian motion with 100,000 trials through a binomial lattice model. The significant inputs to the valuation include the remaining time period, the Company's closing share price at September 30, 2022 ($0.71), estimated Company common share volatility (100%), and risk free rate of 4.1% to discount the ending result to present value. The Company determined that the balance of this contingent consideration at September 30, 2022 was $5.6 million, with the $1.6 million increase over the balance at February 24, 2022 recorded in the unrealized loss from changes in fair value caption in the statement of loss and comprehensive loss.

The purchase is accounted for as a business combination with amounts recognized as at the acquisition date for each major class of assets acquired and liabilities assumed are as follows:

(Thousands of United States dollars)
Current assets
Cash		$	535
Trade receivables			975
Inventory			5,534
Other current assets			540
Non-current assets
Property, plant, and equipment			536
Right of use assets			772
Other non-current assets			127
Intangible asset			4,533
Goodwill			24,898
Total assets		$	38,450
Current liabilities
Trade payables and accrued liabilities		$	(2,273	)
Current lease liabilities			(644	)
Provision for sales tax			(982	)
Deferred tax			(24	)
Other current liabilities			(99	)
Total liabilities		$	(4,022	)
Total net assets acquired		$	34,428

The fair value of the trade receivables reflects a $0.3 million discount to the gross contractual amounts as allowance for potentially uncollectible amounts. Since the acquisition date through September 30, 2022, JustCBD revenue was $17.8 million with net loss and comprehensive loss of $0.6 million.

Page 11

Flora Growth Corp. Notes to the interim condensed consolidated financial statements (unaudited) For the nine months ended September 30, 2022 and September 30,2021 (United States dollars, except shares and per share amounts)

The intangible assets of $4.5 million are comprised of the following categories and estimated useful lives: tradenames of $3.1 million for eight to nine years, customer relationships of $1.2 million for five to seven years, and know-how of $0.2 million for three years. The Company expects the goodwill and intangible asset values to be deductible for Unites States income tax purposes.

If JustCBD was acquired at January 1, 2022, the combined revenue and net loss of JustCBD and the Company would have increased approximately $5.2 million and $1.6 million, respectively. 

No Cap Hemp Co. business combination

On July 20, 2022, Just Brands LLC., a wholly owned subsidiary of the Company, acquired certain assets, assumed liabilities, employees and processes (together the “purchased assets”) of No Cap Hemp Co. (“No Cap”) for total purchase consideration of $0.9 million. No Cap is a manufacturer and distributor of high quality and affordable CBD products. No Cap is based in Florida in the United States and was formed in 2017. Just Brands LLC acquired No Cap to expand its product offerings and accelerate its revenue growth.

As consideration for the purchased assets of No Cap, Just Brands LLC will pay an amount equal to 10% of the sales of No Cap until such a time that Just Brands LLC will have paid a total of $2.0 million. Also on July 20, 2022, Just Brands LLC advanced $0.2 million to the former owners of No Cap. This $0.2 million will be settled prior to and in the same manner as the consideration for the purchased assets. As these entire amounts are considered contingent consideration, it was valued using discounted cash flow models utilizing two different rates, high and low. The significant inputs to the valuation include the estimated nine-year time period to accumulate the $2.0 million maximum payment and discount rates of 23.5%, high, and 14.3%, low, to estimate the present value of the future cash outflows. The resulting acquisition date fair value of $0.9 million contingent purchase consideration is classified within other long term liabilities on the statement of financial position. At September 30, 2022, the remaining balance outstanding was $0.9 million.

The purchase is accounted for as a business combination with amounts recognized as at the acquisition date for each major class of assets acquired and liabilities assumed are as follows:

(Thousands of United States dollars)
Current assets
Cash		$	(150)
Trade receivables			31
Inventory			725
Other current assets			150
Non-current assets
Intangible asset			-
Goodwill			417
Total assets		$	1,173
Current liabilities
Trade payables and accrued liabilities		$	(272	)
Total liabilities		$	(272	)
Total net assets acquired		$	901

The fair value of the trade receivables reflects a $0.2 million discount to the gross contractual amounts as allowance for potentially uncollectible amounts. Since the acquisition date through September 30, 2022, No Cap revenue was $0.4 million with net income and comprehensive income of $0.1 million.

The Company expects the goodwill to be deductible for Unites States income tax purposes.

If No Cap was acquired at January 1, 2022, the combined revenue of No Cap and the Company would have increased approximately $1.9 million, and the combined net loss would have decreased by $1.0 million.

Acquisition of Minority interests

On January 18, 2022, the Company acquired the remaining 10% of the outstanding equity interests in Flora Beauty LLC from its minority shareholder in exchange for 100,000 common shares of the Company and a stock option exercisable for up to 50,000 common shares of the Company at an exercise price of $1.70 per share that expire five years from the date of the grant.

On January 31, 2022, the Company completed its acquisition of Breeze by acquiring the remaining 10% of the equity interests in Breeze from its minority shareholders in exchange for 30,282 common shares of the Company.

Page 12

Flora Growth Corp. Notes to the interim condensed consolidated financial statements (unaudited) For the nine months ended September 30, 2022 and September 30,2021 (United States dollars, except shares and per share amounts)

9. INTANGIBLE ASSETS AND GOODWILL  

A continuity of intangible assets for the nine months ended September 30, 2022 is as follows:

In Thousands of United States dollars		License				Customer Relationships				Trademarks and Brands				Patents				Non-Compete Agreements				Goodwill				Total
Cost
At December 31, 2021		$	610			$	1,759			$	2,211			$	4,300			$	1,190			$	20,054			$	30,124
Acquired through business combinations (Note 8)			-				1,240				3,063				230				-				25,315				29,848
Impairment (Note 10)			-				-				-				-				-				(16,000	)			(16,000	)
At September 30, 2022		$	610			$	2,999			$	5,274			$	4,530			$	1,190			$	29,369			$	43,972
Accumulated Amortization
At December 31, 2021		$	129			$	26			$	35			$	48			$	66			$	-			$	304
Additions			113				266				459				435				298				-				1,571
At September 30, 2022		$	242			$	292			$	494			$	483			$	364			$	-			$	1,875
Foreign Currency translation			(38	)			(6	)			(32	)			-				-				(513	)			(589	)
Net book value at September 30, 2022		$	330			$	2,701			$	4,748			$	4,047			$	826			$	28,856			$	41,508