Aurora Cannabis Acquires Europe's Largest Organic Hemp Company

Significant Supply to Fuel Global CBD Wellness and Organic Hemp-Based Supplements Expansion

Aurora Cannabis Inc. (TSX: ACB) (OTCQB: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) today announced that it has acquired Europe’s largest manufacturer, processor and supplier of certified organic hemp and hemp products, Agropro UAB, in addition to hemp processor and distributor Borela UAB.

Agropro, a hemp seed processing and contracting firm, and its sister company Borela UAB (“Borela”), a processor and distributor of organic hulled hemp seeds, hemp seed protein, hemp flour and hemp seed oil, currently has 1,600 hectares (4,000 acres) under contract, possibly producing more than 1,000,000 kg of organic berry with additional contracts available to expand to more than 3,000 hectares across Lithuania, Latvia, Estonia, and Poland.

Previously, the companies were focused solely on the creation and sale of hemp seed-based products to markets across Europe, North Asia and America. Each year amounts of CBD were abandoned on the field unutilized.

Post-acquisition, Aurora intends to extract, refine and productize the organic hemp biomass into a wide range of wellness products that are organic to generate new and significant revenue streams in this burgeoning market. With increasing recognition of the medical and general health benefits of CBD-based products, Aurora continues executing on a CBD-focused plan that covers the whole value chain, from supply, through genetics research and clinical trials, to product development and distribution to several domestic and international markets across five continents.

In addition to the market potential, hemp is an food supplement and meat substitute for its large and fast growing health food, vegetarian and vegan markets, due to its high protein content. Through its majority owned subsidiary Hempco, Aurora is executing on a number of hemp food market opportunities, and intends to incorporate Agropro supply and distribution with Hempco’s to enhance market access and accelerate growth of margin, premium hemp-based product offerings.

On February 1, 2018, Borela’s hemp grain processing facility became the only hemp company to receive a BRC quality certification, enabling Borela to supply supermarkets.   The operations of borela also have received USDA Organic, other certifications, in addition to Eco-Cert, enabling the company to promote premium products across big markets.

The organic certification achieved by Agropro and Borela will enable the launch of new premium products, positively impacting the Company’s margin profile for hemp-based products.

“Agropro’s position as Europe’s leading manufacturer of premium organic hemp Together with the significant and previously unutilized CBD production from the large quantities of currently discarded biomass, makes this an accretive acquisition and one that positions Aurora nicely to become a worldwide leader in organic CBD-based wellness products, said Terry Booth, CEO”

Neil Belot, Chief Global Business Development Officer, added,”With our industry-leading team of crop and plant scientists, extraction and product formulation expertise, and wide-reaching worldwide distribution networks and partnerships, we expect increasing production, extraction, refinement and supply of CBD, in addition to other hemp-based food products. With a broad European footprint, extensive contracted land agreements and solid existing revenue streams, Agropro and Borela provide further expansion of our international footprint, while playing a significant role in the implementation of our CBD wellness and hemp-based food products plan.”

Skirmantas Nikstele Co-Founder & Chief Executive Officer of Agropro, added,”As the largest producer, processor, and supplier of organic hemp products in Europe, we have developed a strong reputation for quality and consistency with our clients across the planet. Through Aurora, we gain access to a wider distribution network, in addition to an access to industry-leading science to help ramp up production, while enhancing margins through the introduction of new products, proven production techniques, and robust genetics.”

The hemp plant consists of three components. Seeds, which can be used in food and personal care products, leaves and flowers, which produce cannabidiol (CBD), used in medical products, supplements and beauty products, and stem, which generates fiber and hurd, used in paper goods, construction materials, clothing and other fabrics.

EFAs play a very important part in critically important processes, such as detoxification and the formation of neurotransmitters, hormones and brain cells. Hemp seed is not only rich in essential fatty acids, it also represents a significant source for amino acids, which are the building blocks of protein. Essential amino acids aren’t produced by our bodies, and must come from food. Hemp seeds contain all 9 essential amino acids, in addition to other nutritionally important minerals and vitamins, including iron, zinc, carotene, vitamin B1, vitamin B2, vitamin B6, vitamin D, vitamin E, magnesium, calcium, potassium, and enzymes.

These characteristics have caused continued market growth of hemp-based products. The hemp seed market, as a sub category, is anticipated to reveal stronger growth.

With Agropro and Borela, Aurora has obtained the distribution channels, in addition to the capacity to process the material and a supply of hemp seed products. Market reach will be further strengthened through integration with Hempco, while Aurora’s science teams will spearhead research into further wellness and medical applications, in addition to cultivation yield enhancements.

Terms of the Transaction

Aurora bought 100% of the issued and outstanding shares of Agropro UAB and Borela UAB for total cash consideration of €5,364,000 (approximately C$8.1 million) and common shares of Aurora equal to €960,000 (approximately C$1.4 million), depending on the 5-day VWAP as of September 10, 2018. In addition, Aurora will also refinance existing debt totaling €2,076,000 (approximately C$3.1 million) and offer a finder’s fee totaling €1,517,400 (approximately C$2.3 million).

Headquartered in Edmonton, Alberta, Canada with capacity in excess of sales and operations and 570,000 kg per year in 14 countries Aurora is one of leading cannabis businesses and the world’s largest. Aurora is vertically integrated and horizontally diversified across each key segment of the value chain, from facility engineering and design to cannabis breeding and genetics research, cannabis and hemp production, derivatives, higher value-add product development, home farming, wholesale and retail distribution.

Highly differentiated from its peers, Aurora has established a uniquely advanced, consistent and effective production approach, based on purpose-built facilities that incorporate leading-edge technologies across all processes, defined by extensive customization and automation, leading to the massive scale production of high quality merchandise at ultra-low costs. Intended to be scalable and replicable these production facilities are intended to make cannabis of scale, with ultra-low per gram production costs yields, and higher quality. Every one of Aurora’s facilities is constructed to meet European Union (EU) GMP standards, and its first production facility, the newly acquired MedReleaf Markham facility, and its wholly owned European medical cannabis distributor Pedanios, have achieved this level of certification.

In addition to the Company’s rapid organic growth and strong execution on strategic M&A, which thus far includes 10 companies obtained — MedReleaf, CanvasRx, Peloton Pharmaceutical, Pedanios, H2 Biopharma, Urban Cultivator, BC Northern Lights, Larssen Greenhouses, CanniMed Therapeutics, and Anandia — Aurora is distinguished by its reputation as a partner of choice and employer of choice in the World cannabis sector, having invested in and established strategic partnerships with a range of leading innovators, including: The Green Organic Dutchman Holdings Ltd. (TSX: TGOD), Radient Technologies Inc. (TSXV: RTI), Hempco Food and Fiber Inc. (TSXV: HEMP), Cann Group Ltd. (ASX: CAN), Micron Waste Technologies Inc. (CSE: MWM), Choom Holdings Inc. (CSE: CHOO), Namaste Technologies Inc. (TSXV: N), Evio Beauty Group (private), Wagner Dimas (private), CTT Pharmaceuticals (OTCC: CTTH), Capcium Inc. (private), and Alcanna Inc. (TSX: CLIQ).

Aurora’s Common Shares trade on the TSX under the symbol”ACB”, and are a constituent of the S&P/TSX Composite Index.

To find out more about Aurora, please see our investor website, investor.auroramj.com, Twitter, Facebook or Instagram

SOURCE

Published at Wed, 12 Sep 2018 16:32:16 +0000

Posted in: News

Comments are closed.