Initial 17% Ownership Stake, with Option to
Increase to in Excess of 50%
TSX: ACB
EDMONTON and ANCASTER, ON, Jan. 5, 2018 /CNW/ - Aurora
Cannabis Inc. ("Aurora") (TSX: ACB) (OTCQB: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) and The Green
Organic Dutchman Holdings Ltd. ("TGOD") (privately held) today
announced that the companies have completed a definitive agreement
covering a strategic investment in TGOD by Aurora, as well as a
supply contract (the "Transaction").
Under the terms of the agreement, which the companies anticipate
completing in the coming weeks, Aurora will acquire, through a
private placement ("the "Placement"), a 17.62% interest on a
non-diluted basis. The Placement consists of 33,333,334 units,
priced at $1.65 per unit, for gross
proceeds of $55 million. Each unit
consists of one common share and one half of one common share
purchase warrant, exercisable at $3.00 per common share for a period of 36 months
following closing of the offering.
Upon TGOD achieving certain corporate, operational, construction
and financial milestones, as described below, Aurora shall have the
option to incrementally increase its ownership interest in TGOD to
51%. The completion of the Transaction is subject to customary
closing conditions, as well as the entrance into an investor rights
agreement.
Supply Contract
As part of the agreement, the companies shall enter into a
supply contract, providing Aurora with the right to purchase up to
20% of TGOD's annual production of organic cannabis from TGOD's
Ancaster and Valleyfield facilities. Consequently, Aurora
anticipates being able to procure in excess of 20,000 kg per annum
of premium organic products once TGOD`s Valleyfield and Ancaster facilities are completed and at full
capacity. The supply contract provides Aurora with the right to
purchase up to 33% of TGOD's production at the two facilities if
Aurora increases its ownership interest to 31%.
ALPS-Designed Purpose-Built Cultivation Facility
TGOD will be constructing an ultra high-technology greenhouse
facility, similar to the Aurora Sky facility, at Valleyfield in Quebec, where TGOD owns a 75-acre property.
The initial building permits for the project were received
December, 2017. The facility, which has been designed by ALPS
(Aurora Larssen Projects Inc.), Aurora's greenhouse design and
consulting subsidiary. The facility will measure 820,000 square
feet, making it one of the world's largest purpose-built cannabis
facilities. The new TGOD facility will benefit from the latest
greenhouse technology as implemented at Aurora Sky. Furthermore,
the facility will benefit from some of the lowest cost power in
Canada at under $0.04 per kWh. ALPS will assist TGOD with the
start-up of its facility, leveraging Aurora's deep,
industry-leading large-scale cannabis cultivation experience. The
companies anticipate that this will significantly reduce the
facility's commissioning timeline, and accelerate time to market.
Management anticipates completion of the Valleyfield facility by the fourth calendar
quarter of 2018.
As part of the partnership, Aurora and ALPS will also provide
additional services to TGOD on the completion and commissioning of
its Ancaster facility, which is
anticipated for Q4 2018. The facility, when completed, will measure
150,000 square foot in total, with a production capacity of 14,000
kg of premium organic cannabis per annum.
Working with its project alliance partners Eaton, and Hamilton Utility Corp, TGOD will be
outsourcing its power, heating, cooling and C02
production, and associated CapEx costs, via a scalable six-megawatt
co-gen natural gas micro-grid power plant. Management believes this
is the best possible scenario for its power needs in Ancaster, one that is expected to ultimately
reduce the cost per kWh from upwards of $0.13 to an estimated net cost of $0.045. As a result of this ultra-low-cost power
solution, along with the Company`s advanced automation control
systems, TGOD has the potential to become one of the lowest-cost
cannabis producers in Ontario and
beyond.
Management Commentary
"Aurora and TGOD are establishing a strategic partnership
designed to provide significant, long-term benefits to both
companies," said Terry Booth, CEO.
"Our objective, as a partner in TGOD's facility design, engineering
and construction, and as a cornerstone investor, is to ensure
TGOD's rapid market entry and commercial success. In return, Aurora
will participate in TGOD's accelerated growth, and secure a ready
supply of high-quality organic cannabis products to serve our
Canadian and international customers. This agreement represents
further validation of Aurora's position as the partner of choice in
the cannabis sector, with our ability to deliver an unmatched
combination of investment capital, technology, and expertise in
cultivation and facility design and construction."
"Teaming up with Aurora, the industry's innovation leader,
provides us with a stable, supportive shareholder, through whom we
have access to best-in-class technologies and industry know-how,
which we believe will significantly accelerate our time to market,"
said Csaba Reider, President of
TGOD. "The supply agreement with Aurora validates our strategy to
produce premium priced organic cannabis. With this significant
cornerstone investor and customer, we will be able to leverage our
deep consumer packaged goods and brand building experience, as well
as Aurora`s well-established brand recognition, to pursue rapid
growth."
Rob Anderson, TGOD CEO, added,
"We are pleased to have Aurora as a strategic investor as they not
only inject capital, but also provide industry-leading knowledge,
products and services that will result in cost savings, enhanced
yields and greater returns to TGOD. Furthermore, the agreement
with ALPS will de-risk both project execution and operations, due
to their deep experience with high-technology greenhouse
facilities, including Aurora Sky. Finally, the partnership provides
us with access to additional services and genetics. Based on this
strategic investment by Aurora, we will have raised approximately
$160 million. Consequently, our
102,000 kg per year Valleyfield
facility is now fully funded, positioning us well for our planned
March 2018 IPO."
Additional Terms
Upon TGOD achieving certain milestones, Aurora has the right to
increase its ownership interest in TGOD as follows (b through d can
only be achieved upon TGOD becoming a public company). If
exercised, Aurora has the right to purchase the shares from
treasury at a 10% discount to the listed market price:
a)
|
a number of common
shares equal to 8% of the common shares on a fully-diluted basis 3
months after TGOD becomes listed on a stock exchange in
Canada;
|
b)
|
a number of common
shares equal to 8% of the common shares on a fully-diluted basis if
TGOD's Valleyfield, Quebec project (the "Quebec Project") is
permitted and construction of the Quebec Project has reached 50%
completion, as determined based on the construction budget of the
Quebec Project;
|
c)
|
a number of common
shares equal to 8% of the common shares on a fully-diluted
basis upon the Valleyfield project receiving a cultivation
license; and
|
d)
|
a number of common
shares equal to 12% of the common shares on a fully diluted basis
if TGOD meets certain revenue milestones
|
About Aurora
Aurora's wholly-owned subsidiary, Aurora Cannabis Enterprises
Inc., is a licensed producer of medical cannabis pursuant to Health
Canada's Access to Cannabis for Medical Purposes Regulations
("ACMPR"). The Company operates a 55,200 square foot,
state-of-the-art production facility in Mountain View County,
Alberta, known as "Aurora
Mountain", a second 40,000 square foot high-technology production
facility known as "Aurora Vie" in Pointe-Claire, Quebec on Montreal's West Island, and is currently
constructing an 800,000 square foot production facility, known as
"Aurora Sky", at the Edmonton
International Airport, as well as is completing a fourth facility
in Lachute, Quebec through its
wholly owned subsidiary Aurora Larssen Projects Ltd.
In addition, the Company holds approximately 17.23% of the
issued shares in leading extraction technology company Radient
Technologies Inc., based in Edmonton, and is in the process of completing
an investment in Edmonton-based
Hempco Food and Fiber for an ownership stake of up to 50.1%.
Furthermore, Aurora is the cornerstone investor with a 22.9% stake
in Cann Group Limited, the first Australian company licensed to
conduct research on and cultivate medical cannabis. Aurora also
owns Pedanios, a leading wholesale importer, exporter, and
distributor of medical cannabis in the European Union, based in
Germany. The Company offers
further differentiation through its acquisition of BC Northern
Lights Ltd. and Urban Cultivator Inc., industry leaders,
respectively, in the production and sale of proprietary systems for
the safe, efficient and high-yield indoor cultivation of cannabis,
and in state-of-the-art indoor gardening appliances for the
cultivation of organic microgreens, vegetables and herbs in home
and professional kitchens. Aurora's common shares trade on the TSX
under the symbol "ACB".
About the Green Organic Dutchman Holdings Ltd.
The Green Organic Dutchman Holdings Ltd. established in
2012, is licensed under the Access to Cannabis for
Medical Purposes Regulations ("ACMPR") to cultivate
medical cannabis. The company was granted its
cultivation license in 2016 and sales license in 2017.TGOD
grows high-quality, pesticide-free organic medical cannabis based
on sustainable, all-natural principles, and all products are
laboratory tested to ensure patients have access to a standardized,
safe and consistent product. TGOD carries out its
principal activities producing cannabis from its facilities in
Ancaster, Ontario, as well as
will be constructing a high-technology, ALPS designed facility in
Valleyfield, Quebec. Upon
completion, both facilities combined will measure 970,000 square
feet, with a total production capacity of 116,000 kg per
year. TGOD will have raised approximately $160,000,000, with over 4,500
shareholders positioning us well for our
planned March 2018 IPO. Interested investor information
is available at www.tgod.ca
On behalf of the Boards of
Directors,
AURORA CANNABIS
INC.
Terry
Booth
CEO
This news release includes statements containing certain
"forward-looking information" within the meaning of applicable
securities law ("forward-looking statements"), including, but not
limited to, statements with respect to the completion of the
transaction, completion of the Ancaster and Valleyfield facilities and the performance of
Aurora and TGOD. Forward-looking statements are frequently
characterized by words such as "plan", "continue", "expect",
"project", "intend", "believe", "anticipate", "estimate", "may",
"will", "potential", "proposed" and other similar words, or
statements that certain events or conditions "may" or "will" occur.
These statements are only predictions. Various assumptions were
used in drawing the conclusions or making the projections contained
in the forward-looking statements throughout this news release.
Forward-looking statements are based on the opinions and estimates
of management at the date the statements are made, and are subject
to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from
those projected in the forward-looking statements. The Company is
under no obligation, and expressly disclaims any intention or
obligation, to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as expressly required by applicable law.
Neither TSX nor its Regulation Services Provider (as that
term is defined in the policies of Toronto Stock Exchange) accept
responsibility for the adequacy or accuracy of this
release.
SOURCE Aurora Cannabis Inc.