TSX: ACB; TSX: LIQ
EDMONTON, Feb. 14, 2018 /CNW/ - Aurora Cannabis Inc.
("Aurora") (TSX:ACB) and Liquor Stores N.A. Ltd. ("Liquor
Stores") (TSX:LIQ) (collectively, the "Corporations")
announced today the closing of the previously announced strategic
investment by Aurora in Liquor Stores by way of a non-brokered
private placement (the "Private Placement").
Liquor Stores intends to use the net proceeds from the Private
Placement to establish and launch a leading brand of cannabis
retail outlets, whereby it will convert some number of Liquor
Stores' existing retail locations into cannabis retail stores and
establish new cannabis retail stores. Liquor Stores will also use a
portion of the proceeds to continue to strengthen its existing
liquor retail brands by renovating current liquor store locations,
and also for general corporate purposes.
"We are very pleased to be invested in Liquor Stores, one of
Alberta's most recognizable retail
brands," said Terry Booth, CEO of
Aurora. "Liquor Stores' infrastructure, logistics and capacity to
build and operate a large network of retail outlets provides a
great opportunity for the cannabis industry to service what is
anticipated to be a strong growth market. We look forward to
playing our part in this partnership, and help establishing a new
customer experience for adult consumers."
"Aurora has established itself as a global leader in the
cannabis sector, based in our shared home province of Alberta," said James
Burns, CEO of Liquor Stores. "Combining Aurora's expertise,
insight and strong execution with Liquor Stores' operational
excellence in the retail of adult use controlled substances is huge
win not only for our companies' shareholders, but also for ensuring
that the public policy objectives for legalizing consumer use of
cannabis are met responsibly."
Terms of the Private Placement
In connection with the Private Placement, Liquor Stores has
issued an aggregate of 6.9 million common shares (the
"Shares") at a price of $15.00
per Share for gross proceeds of $103.5
million (the "Initial Investment"). As a result
of the Initial Investment, Aurora now owns approximately 19.9% of
the Shares (on a non-diluted basis).
In addition, Aurora has subscribed for 2.3 million subscription
receipts of Liquor Stores (the "Subscription Receipts") at a
price of $15.00 per Subscription
Receipt for aggregate proceeds of $34.5
million. Following approval from Liquor Stores' shareholders
(other than Aurora, its associates and affiliates) at its next
annual general meeting and the satisfaction of the other escrow
release conditions, the proceeds from the sale of Subscription
Receipts will be released to Liquor Stores and Aurora will increase
its ownership of Shares to approximately 25% (on a non-diluted
basis).
Liquor Stores has also issued to Aurora, for no additional
consideration, two classes of Share purchase warrants: (1)
10,130,000 warrants at an exercise price of $15.75 per Share to allow Aurora to increase its
pro rata equity interest in Liquor Stores to approximately 40% on a
fully diluted basis (the "Sunshine Warrants"); and (2) up to
1,750,000 warrants exercisable by Aurora at an exercise price of
$15.00 upon any conversion of any of
the outstanding 4.70% convertible unsecured subordinated debentures
of Liquor Stores to allow Aurora to maintain its pro rata equity
interest in Liquor Stores (the "Pro Rata Warrants", and
together with the Subscription Receipts and the Sunshine Warrants,
the "Additional Investment"). The exercise of each of the
Sunshine Warrants and the Pro Rata Warrants will be conditional
upon the approval of Liquor Stores shareholders (other than Aurora
and its associates or affiliates) at the next annual general
meeting of Liquor Stores. Completion of the Additional
Investment remains subject to the receipt of required approvals
under the Competition Act (Canada).
Early Warning Report
Prior to the completion of the Initial Investment Aurora did not
hold any Shares. After giving effect to the Initial Investment,
Aurora holds 6,900,000 Shares, representing approximately 19.88% of
the issued and outstanding Shares (on a non-diluted basis). As of
the closing of the Initial Investment, Liquor Stores has 34,709,259
Shares issued and outstanding. If the conditions are met to
convert the 2,300,000 Subscription Receipts into Shares, Aurora
will hold a total of 9,200,000 Shares, representing approximately
24.86% of the 37,009,959 issued and outstanding Shares (on a
non-diluted basis). On the exercise of the 10,130,000 Sunshine
Warrants, Aurora will hold approximately 40% of the issued and
outstanding Shares (on a fully diluted basis). The exercise of the
Pro Rata Warrants allows Aurora to maintain its pro rata equity
interest in Liquor Stores upon the conversion of any of the
outstanding 4.70% convertible unsecured subordinated debentures of
Liquor Stores and therefore will not increase Aurora's ownership
interest in Liquor Stores.
Aurora acquired the securities for investment purposes. Aurora
will evaluate its investment in Liquor Stores from time to time and
may, based on such evaluation, market conditions and other
circumstances, increase or decrease its shareholdings as
circumstances require through the exercise of the Pro Rata Warrants
or Sunshine Warrants, market transactions, private agreements,
or otherwise. A copy of the Early Warning report will be filed by
Aurora in connection with the Private Placement and will be
available on LIQ's SEDAR profile. In order to obtain a copy of the
early warning report, please contact Nilda
Rivera, Aurora's Vice President, Finance, at telephone
number: 604-362-5207. Aurora's registered office is located at 1500
- 1199 West Hastings St. Vancouver,
British Columbia, V6E 3T5.
About Aurora Cannabis Inc.
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
production facility in Mountain View County, Alberta, known as "Aurora Mountain", a 40,000
square foot production facility known as "Aurora Vie" in
Pointe-Claire, Quebec, and an
800,000 square foot production facility, known as "Aurora Sky", at
the Edmonton International
Airport. Aurora is also completing a fourth facility of 48,000
square feet in Lachute, Quebec,
and will shortly begin construction on a 1,000,000 square foot
production facility in Odense,
Denmark, to be known as "Aurora Nordic", via a joint venture
with Alfred Pedersen & Søn
ApS.
Aurora also owns Berlin-based
Pedanios GmbH, the leading wholesale importer, exporter, and
distributor of medical cannabis in the European Union. The Company
offers further differentiation through its wholly owned
subsidiaries 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.
In addition, the Company holds approximately 17.23% of the
issued shares in leading extraction technology company Radient
Technologies Inc., and has a strategic investment in Hempco Food
and Fiber Inc., with options to increase ownership stake to over
50%. Aurora is also the cornerstone investor in two other licensed
producers, with a 22.9% stake in Cann Group Limited, the first
Australian company licensed to conduct research on and cultivate
medical cannabis, and a 17.62% stake in Canadian producer The Green
Organic Dutchman Ltd., with options to increase to majority
ownership.
Aurora's common shares trade on the TSX under the symbol
"ACB".
About Liquor Stores N.A. Ltd.
Liquor Stores operates 231 retail liquor stores. Liquor Stores'
common shares and convertible subordinated debentures trade on the
Toronto Stock Exchange under the symbols "LIQ" and "LIQ.DB.B",
respectively.
Additional information about Liquor Stores N.A. Ltd. is
available at www.sedar.com and its website at
www.liquorstoresna.ca.
Forward-Looking Statements
This press release contains information that constitutes
"forward-looking information" or "forward-looking statements"
(collectively, "forward-looking information") within the meaning of
applicable securities legislation. The use of any of the words
"believe", "continue", "create", "deliver", "expect", "provide",
"will" and similar expressions are intended to identify
forward-looking information. Forward-looking information includes
statements concerning: the use of the net proceeds from the Private
Placement; the anticipated benefits of the Private Placement to
Liquor Stores, Aurora and their respective shareholders, including
Liquor Stores' ability to establish a retail cannabis business; the
anticipated growth of a cannabis retail business in Canada and anticipated market share;
regulatory risks, including risks related to the ability of, and
expected timing for, Liquor Stores' and Aurora's participation in
the retail adult use market for cannabis in Canada; the timing and anticipated receipt of
required government, regulatory and shareholder approvals for the
Additional Investment; and the timing of the annual general meeting
of the shareholders of Liquor Stores and the closing of the
Additional Investment.
In respect of the forward-looking statements and information
concerning the anticipated benefits of the Private Placement and
the anticipated timing for completion of the Additional Investment,
Liquor Stores and Aurora have provided such in reliance on certain
assumptions that they believe are reasonable at this time,
including assumptions as to the implementation of legislation and a
regulatory regime in respect of cannabis that will permit Liquor
Stores to establish a retail cannabis business; that under
applicable laws or rules in respect of cannabis Aurora and its
affiliates will be permitted to own securities of Liquor Stores and
take certain actions with Liquor Stores in furtherance of the
development of a retail cannabis business together; the time
required to prepare and mail Liquor Stores shareholder meeting
materials, including the required information circular; the ability
of the parties to receive, in a timely manner, the required
government, regulatory, shareholder and other third party approvals
required to complete the Additional Investment and participate in
the retail adult use market for cannabis in Canada; the assets and employees of Liquor
Stores and Aurora; and the plans of Liquor Stores to establish
cannabis stores. Dates may change for a number of reasons,
including unforeseen delays in preparing meeting materials,
inability to secure necessary government, regulatory, shareholder
or other third party approvals in the time assumed or the need for
additional time to satisfy the other conditions to the completion
of the Additional Investment. In general, actual outcomes may vary
from the forward-looking information contained in this press
release. Accordingly, readers should not place undue reliance on
the forward-looking statements and information contained in this
press release.
Since forward-looking information addresses future events and
conditions, by its very nature it involves inherent risks and
uncertainties. Risks and uncertainties inherent in the Private
Placement include, but are not limited to, the failure of Liquor
Stores or Aurora to obtain necessary government, regulatory,
shareholder and other third party approvals, or to otherwise
satisfy the conditions to complete the Additional Investment and
participate in the retail adult use market for cannabis in
Canada, in a timely manner, or at
all; and the failure to successfully execute the plans regarding a
retail cannabis business. The failure to obtain approvals, may
result in the Additional Investment not being completed on the
proposed terms, or at all.
Readers are cautioned that the foregoing list of risk factors
is not exhaustive. Additional information on other factors that
could affect the operations or financial results of Liquor Stores
and Aurora are included in reports on file with applicable
securities regulatory authorities which may be accessed on Liquor
Stores' and Aurora's respective company profiles on SEDAR at
www.sedar.com.
The forward-looking information contained in this press
release is made as of the date hereof and Liquor Stores and Aurora
undertake no obligation to update publicly or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, unless so required by
applicable securities legislation.
SOURCE Aurora Cannabis Inc.