Aurora Cannabis Goes On A Buying Binge

Canadian-based Aurora Cannabis Inc. (ACBFF)  has gone a spending spree as the company continues to make acquisitions. Yesterday, while all of us Americans were bonding over turkey, Aurora announced it had entered into a binding share purchase agreement to acquire H2 Biopharma Inc.

The Lachute, Quebec-based H2 is currently completing a purpose-built 48,000 square foot cannabis production facility, less than an hour from Montreal, and near the Pierre-Elliott Trudeau International Airport. The Lachute Facility is expected to be completed by the end of the year and is projected to produce 4,500 kilograms of high-quality cannabis per year. The facility is located on 46 acres of land, which H2 has the right to acquire for $136,000. The Lachute facility has access to ample low-cost power, water and infrastructure to support a very significant capacity expansion – up to or beyond the scale of the Company’s 800,000 square foot Aurora Sky facility, currently under construction near Edmonton International Airport.

“This is another outstanding transaction that further extends Aurora’s lead in establishing advanced-technology, ultra-efficient, low-cost production via purpose-built facilities,” said Terry Booth, CEO. “The Lachute Facility, which is 80% complete and has the land and utilities required for significant additional expansion, is fully consistent with the Aurora Standard and will be instrumental in delivering high-quality products for the Quebec, Canadian and overseas markets.”

This latest Aurora acquisition will be the Company’s fourth production facility in Canada – and the second site in Quebec, in addition to its 40,000 square foot production “Aurora Vie” facility in Pointe-Claire, on the island of Montreal.

Larssen Acquisition

Aurora also announced that it has signed a definitive agreement for the acquisition of 100% of the issued and outstanding shares of Larssen Ltd., a Canadian company that has consulted on the design, engineering, and construction oversight of many greenhouse cultivation facilities.  Larssen will be integrated into a newly incorporated subsidiary, Aurora Larssen Projects Ltd. and will focus on providing a turn-key service offering to Aurora and its domestic and international partners.

Booth added, “The acquisition of Larssen is an immediately accretive, high-margin revenue generating opportunity that also extends our technological leadership in the cannabis sector. We know Thomas and his team very well, as they have been instrumental in the design and engineering of our revolutionary Aurora Sky facility. This will help make the integration of Larssen with Aurora seamless. The establishment of ALPS will add significant capacity to our project execution team, enabling us to further accelerate the expansion of our global presence.”

Hempco Deal Completed

Aurora Cannabis announced that it has completed a non-brokered private placement with Hempco Food and Fiber Inc. for gross proceeds of $3.2 million that was originally announced in September. In relation to the placement, Hempco issued 10,558,676 units, at $0.3075 per unit, to Aurora. According to the company statement, “Each unit consists of one Hempco common share and one non-transferable common share purchase warrant. Each Warrant entitles Aurora to purchase one additional Hempco Share at a price of $0.41 until the second anniversary of the closing date. Each Warrant includes an acceleration clause, providing that if at any time beginning four months and one day after the date the warrant was issued the volume weighted average price per Hempco share on the TSX Venture Exchange (“TSXV”) exceeds $0.65 for a period of 30 consecutive calendar days, Hempco will have a limited right to accelerate the expiration date of the Warrants.”

This all comes as Aurora formally launched its hostile takeover bid for CanniMed Therapeutics. CanniMed had said earlier that while Aurora had expressed interest in a takeover, it hadn’t received a formal request. Aurora disputed that, but today issued a statement saying, “Notice and advertisement of the Offer was placed in the November 24, 2017 edition of the Globe & Mail, and a takeover bid circular will be mailed to CanniMed shareholders. In addition, Aurora will file the offer and takeover bid circular and related documents on SEDAR. The Offer Documents will also be available on Aurora’s website at www.auroramj.com and shareholders are invited to visit cannimed.auroramj.com for further information.”

 

Debra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


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