ACB Aurora Cannabis Inc

Filed pursuant to General Instruction II.L. of Form F-10
File No. 333-230692

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus supplement (the “Prospectus Supplement”), together with the accompanying short form base shelf prospectus dated May 10, 2019 (the “Base Prospectus”) to which this Prospectus Supplement relates, as amended or supplemented (this Prospectus Supplement and the Base Prospectus are together the “Prospectus”), and each document deemed to be incorporated by reference herein and therein, constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.

Information has been incorporated by reference in this Prospectus Supplement and the accompanying Base Prospectus from documents filed with securities commissions or similar authorities in each of the provinces of Canada and with the United States Securities and Exchange Commission (the “SEC”). Copies of the documents incorporated herein by reference may be obtained on request without charge from Aurora Cannabis Inc., Suite 500, 10355 Jasper Avenue, Edmonton, Alberta T5J 1Y6 (Telephone: 604-362-5207) (Attn: the Corporate Secretary), and are also available electronically at www.sedar.com.

PROSPECTUS SUPPLEMENT

TO THE SHORT FORM BASE SHELF PROSPECTUS DATED MAY 10, 2019

AURORA CANNABIS INC.

2,480,810 Common Shares

This Prospectus Supplement, together with the accompanying Base Prospectus, qualifies the periodic resale, from time to time, of up to 2,480,810 common shares (the “Resale Shares”) of Aurora Cannabis Inc. (“Aurora”, the “Company” or “we”) held by the selling shareholders named in this Prospectus Supplement under the heading “Selling Shareholders” (the “Selling Shareholders”) during the balance of the 25-month period that the Base Prospectus, including any amendments thereto, remains valid (the “Offering”). Based on the closing price of our common shares on the New York Stock Exchange (the “NYSE”) on May 27, 2020, the aggregate offering amount of the Resale Shares qualified by this Prospectus Supplement is approximately U.S.$38.0 million. See “Plan of Distribution”.

This Prospectus Supplement has been prepared in connection with registration rights provided by us to the Selling Shareholders under a purchase and sale agreement dated May 20, 2020 among us, Aurora USA Holdings Inc., our wholly owned subsidiary ( “Aurora USA”), Reliva, LLC, a Delaware limited liability company (“Reliva”), Miguel Martin, as representative of the Selling Shareholders and the Selling Shareholders (the “Purchase and Sale Agreement”). We completed the acquisition of Reliva on May 28, 2020 in accordance with Purchase and Sale Agreement (the “Acquisition”), pursuant to which Aurora USA acquired 100% of the membership interests of Reliva and, as partial consideration for this acquisition, we issued the Resale Shares to the Selling Shareholders. We agreed in the Purchase and Sale Agreement to register the resale by the Selling Shareholders of their Resale Shares and to bear certain related fees and expenses, as described below under “Selling Shareholders”.

Our common shares are listed on the Toronto Stock Exchange (the “TSX”) and on the NYSE under the trading symbol “ACB”. On May 27, 2020, the closing price of our common shares as reported on the TSX was $21.05 per share and on the NYSE was U.S.$15.30 per share. The TSX has conditionally approved the listing of the Resale Shares, subject to the Company fulfilling all of the listing requirements of the TSX. In addition, the NYSE has approved the listing of the Resale Shares.

Investing in our securities involves a high degree of risk. See “Risk Factors” in this Prospectus Supplement and the Prospectus.

The Selling Shareholders may, from time to time, sell, transfer or otherwise dispose of any or all of the Resale Shares or interests in the Resale Shares on any stock exchange, market or trading facility in the United States on which the Resale Shares are traded or in private transactions within the United States. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. See “Plan of Distribution”. This Prospectus Supplement has not been filed in respect of, and will not qualify, any distribution of the Resale Shares in British Columbia or in any other province or territory of Canada at any time. We will not receive any of the proceeds from the sale or other disposition of the Resale Shares by the Selling Shareholders. The net proceeds received from the sale or other disposition of the Resale Shares by the Selling Shareholders, if any, is unknown. See “Selling Shareholders” for further information.

No underwriter has been involved in the preparation of this Prospectus Supplement or performed any review of the contents of this Prospectus Supplement.

NEITHER THE SEC, ANY STATE SECURITIES REGULATOR NOR ANY CANADIAN SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OFFERED HEREBY OR PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING BASE PROSPECTUS OR OTHERWISE DETERMINED IF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING BASE PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

We are permitted, under a multi-jurisdictional disclosure system adopted by the United States and Canada, to prepare this Prospectus Supplement in accordance with Canadian disclosure requirements, which are different from those of the United States. We prepare our financial statements, which are incorporated by reference in this Prospectus Supplement, in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (the “IASB”). Our financial statements may not be comparable to the financial statements of United States issuers.

Purchasing the Resale Shares may subject you to tax consequences in both the United States and Canada. This Prospectus Supplement and the accompanying Base Prospectus may not describe these tax consequences fully. You should consult and rely on your own tax advisors with respect to your own particular circumstances. See “Certain Canadian Federal Income Tax Considerations” and “Material United States Federal Income Tax Considerations for U.S. Residents”.

Your ability to enforce civil liabilities under United States federal securities laws may be affected adversely because we are a corporation established under the laws of the Province of British Columbia and our principal place of business is in Canada. In addition, some or all of the directors and officers of the Company are residents of jurisdictions other than the United States, and all or a substantial portion of the assets of those persons are or may be located outside the United States. See “Enforceability of Civil Liabilities by U.S. Investors”.

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Investing in the Resale Shares involves a high degree of risk. You should carefully review the risks outlined in the “Risk Factors” section and elsewhere in this Prospectus Supplement and the accompanying Base Prospectus and the documents incorporated by reference herein and therein for a discussion of certain considerations relevant to an investment in the Resale Shares offered hereby.

The head office of the Company is located at Suite 500, 10355 Jasper Avenue, Edmonton, Alberta, T5J 1Y6. The registered office of the Company is located at Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7.

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TABLE OF CONTENTS

Prospectus Supplement

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TABLE OF CONTENTS

Base Shelf Prospectus

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IMPORTANT NOTICE

This document is in two parts. The first part is this Prospectus Supplement, which describes the specific terms of the Resale Shares being offered and the method of distribution of those securities by the Selling Shareholders and also supplements and updates information regarding the Company contained in the accompanying Base Prospectus and the documents that are incorporated by reference into this Prospectus Supplement and the Base Prospectus. The second part is the Base Prospectus, which provides more general information about our common shares and other securities that may be offered from time to time.

This Prospectus Supplement and the Base Prospectus are together referred to as the Prospectus. This Prospectus Supplement is deemed to be incorporated by reference into the Prospectus solely for the purposes of the Offering. Other documents are also incorporated or deemed to be incorporated by reference into this Prospectus Supplement and into the Prospectus. See “Documents Incorporated by Reference”. Both documents contain important information you should consider when making your investment decision. This Prospectus Supplement may add, update or change information contained in the accompanying Base Prospectus. Before investing, you should carefully read both this Prospectus Supplement and the accompanying Base Prospectus together with the additional information about the Company to which we refer you in the sections of this Prospectus Supplement and the accompanying Base Prospectus entitled “Documents Incorporated by Reference”.

You should rely only on information contained in this Prospectus Supplement, the accompanying Base Prospectus and the documents we incorporate by reference in this Prospectus Supplement and the accompanying Base Prospectus. If information in this Prospectus Supplement is inconsistent with the accompanying Base Prospectus or the information incorporated by reference therein, you should rely on this Prospectus Supplement. We have not authorized anyone to provide readers with information that is different. If anyone provides you with any different or inconsistent information, you should not rely on it. The Selling Shareholders may offer the Resale Shares only in jurisdictions where such offers are permitted by law. The information contained in this Prospectus Supplement and the accompanying Base Prospectus is accurate only as of their respective dates, regardless of the time of delivery of this Prospectus Supplement and the accompanying Base Prospectus and you should not assume otherwise. The business, financial condition, results of operations and prospects of the Company may have changed since those dates. We do not undertake to update the information contained or incorporated by reference herein or in the Base Prospectus, except as required by applicable securities laws. This Prospectus Supplement shall not be used by anyone for any purpose other than in connection with the Offering.

ABOUT THIS PROSPECTUS SUPPLEMENT

We have filed the Base Prospectus with the securities commissions in all Canadian provinces other than Québec (the “Canadian Qualifying Jurisdictions”) in order to qualify the offering of the securities described in the Base Prospectus in accordance with NI 44-102. The Alberta Securities Commission issued a receipt dated May 10, 2019 in respect of the final Base Prospectus as the principal regulatory authority under Multilateral Instrument 11-102 – Passport System, and each of the other securities commissions or similar regulatory authorities in the Canadian Qualifying Jurisdictions is deemed to have issued a receipt under National Policy 11-202 – Process for Prospectus Review in Multiple Jurisdictions.

This Prospectus Supplement and the accompanying Base Prospectus are part of a “shelf” registration statement on Form F-10 that we have filed with the SEC under the United States Securities Act of 1933, as amended (the “Securities Act”). The shelf registration statement became effective under the rules and regulations of the SEC on May 14, 2019. This Prospectus Supplement describes the specific details regarding the Offering including the number of Resale Shares that may be offered and sold, and the manner in which offers and sales of these Registrable Securities may be completed by the Selling Shareholders. The accompanying Base Prospectus provides general information about the Company, some of which, such as the section entitled “Plan of Distribution”, may not apply to the Offering. This Prospectus Supplement does not contain all of the information contained in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC. You should refer to the registration statement and the exhibits to the registration statement for further information with respect to us and our securities.

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Some of the information contained or incorporated by reference in this Prospectus Supplement and the accompanying Base Prospectus concerning economic and industry trends is based upon or derived from information provided by industry sources. We believe that such information is accurate and that the sources from which it has been obtained are reliable. However, we cannot guarantee the accuracy of such information and we have not independently verified the assumptions upon which projections of future trends are based.

We are subject to the information requirements of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), and applicable Canadian securities legislation, and in accordance therewith we file reports and other information with the SEC and with the securities regulatory authorities of each of the provinces of Canada. Under a multi-jurisdictional disclosure system adopted by the United States and Canada, we may generally prepare these reports and other information in accordance with the disclosure requirements of Canada. These requirements are different from those of the United States. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required to publish financial statements as promptly as United States companies.

The SEC maintains a website (www.sec.gov) that makes available reports and other information that we file electronically with it, including the registration statement of which this Prospectus Supplement forms a part.

This Prospectus Supplement is deemed to be incorporated by reference into the accompanying Base Prospectus solely for the purposes of the Offering. Other documents are also incorporated or deemed to be incorporated by reference into this Prospectus Supplement and into the accompanying Base Prospectus. See “Documents Incorporated by Reference”. This Prospectus Supplement does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this Prospectus Supplement by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.

Copies of reports, statements and other information that we file with the Canadian provincial securities regulatory authorities are electronically available from the Canadian System for Electronic Document Analysis and Retrieval (“SEDAR”) (www.sedar.com).

FINANCIAL INFORMATION AND ACCOUNTING PRINCIPLES

Unless otherwise indicated, financial information in this Prospectus Supplement has been prepared in accordance with IFRS. The financial information of the Company incorporated by reference herein is presented in Canadian dollars. Unless stated otherwise or as the context otherwise requires, all references to dollar amounts in this Prospectus Supplement are references to Canadian dollars. References to “$” or “C$” are to Canadian dollars and references to “U.S. dollars” or “U.S.$” are to United States dollars. Unless otherwise indicated herein, all share and per share information has been retroactively adjusted to give effect to the Consolidation (as defined below).

On May 27, 2020, the exchange rate for the United States dollar in terms of Canadian dollars, as quoted by the Bank of Canada, was U.S.$1.00 = $1.3780.

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FORWARD-LOOKING STATEMENTS

This Prospectus Supplement, including the documents incorporated by reference, contains forward-looking statements and forward-looking information (collectively referred to as “forward-looking statements”) within the meaning of applicable Canadian securities law and forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may not be based on historical fact, including without limitation statements regarding our expectations in respect of future financial position, business strategy, future production, events or developments that we expect to take place in the future, projected costs and plans and objectives, and global economic events arising from the novel coronavirus outbreak which causes the disease COVID-19 (“COVID-19”). Often, but not always, forward-looking statements can be identified by the use of the words “believes”, “may”, “plan”, “will”, “estimate”, “scheduled”, “continue”, “anticipates”, “intends”, “expects”, and similar expressions.

Such statements reflect our management’s current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and known or unknown risks and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others:

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Such information is included, among other places, in this Prospectus Supplement under the headings “The Company”, “Use of Proceeds”, “Risk Factors”, in our 2019 AIF (as defined below) under the headings “Description of the Business” and “Risk Factors”, in our 2019 Annual MD&A (as defined below) and our Q3 Interim MD&A (as defined below), each of which documents are incorporated by reference into this Prospectus Supplement.

These factors should be considered carefully and readers are cautioned not to place undue reliance on the forward-looking statements. Readers are cautioned that the foregoing list of risk factors is not exhaustive and it is recommended that prospective investors consult the more complete discussion of risks and uncertainties facing the Company included in the Base Prospectus. See “Risk Factors” in this Prospectus Supplement and the accompanying Base Prospectus for a more detailed discussion of these risks. Although we believe that the expectations conveyed by the forward-looking statements are reasonable based on the information available to us on the date such statements were made, no assurances can be given as to future results, approvals or achievements. The forward-looking statements contained in this Prospectus Supplement and the documents incorporated by reference herein are expressly qualified by this cautionary statement. We disclaim any duty to update any of the forward-looking statements after the date of this Prospectus Supplement to conform such statements to actual results or to changes in our expectations except as otherwise required by applicable law.

DOCUMENTS INCORPORATED BY REFERENCE

We incorporate by reference into this Prospectus Supplement documents that we have filed with securities commissions or similar authorities in each of the provinces of Canada, which have also been filed with, or furnished to, the SEC. You may obtain copies of the documents incorporated herein by reference without charge from Aurora Cannabis Inc., Suite 500, 10355 Jasper Avenue, Edmonton, Alberta, T5J 1Y6 (Telephone: 604-362-5207) (Attn: the Corporate Secretary). These documents are also available electronically from the SEDAR filing website of Canadian Securities Administrators (www.sedar.com) and from the EDGAR filing website of the SEC (www.sec.gov) (“EDGAR”). The Company’s filings through SEDAR and EDGAR are not incorporated by reference in this Prospectus Supplement except as specifically set out herein.

The following documents (“documents incorporated by reference” or “documents incorporated herein by reference”) have been filed by us with various securities commissions or similar authorities in the provinces of Canada in which we are a reporting issuer, are specifically incorporated herein by reference and form an integral part of this Prospectus Supplement:

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Any document of the type referred to in section 11.1 of Form 44-101F1 of National Instrument 44-101 – Short Form Prospectus Distributions (“NI 44-101”) filed by us with the securities commissions or similar regulatory authorities in the jurisdictions in Canada in which we are a reporting issuer after the date of this Prospectus Supplement and prior to the termination of the Offering shall be deemed to be incorporated by reference into this Prospectus Supplement.

When new documents of the type referred to in the paragraph above are filed by us with the commissions or similar regulatory authorities in the jurisdictions in Canada in which we are a reporting issuer during the currency of this Prospectus Supplement, such documents will be deemed to be incorporated by reference in this Prospectus Supplement and the previous documents of the type referred to in the paragraph above will no longer be deemed to be incorporated by reference in this Prospectus Supplement.

To the extent that any document or information incorporated by reference into this Prospectus Supplement is included in any report on Form 6-K, Form 40-F, Form 20-F, Form 10-K, Form 10-Q or Form 8-K (or any respective successor form) that is filed with or furnished to the SEC after the date of this Prospectus Supplement, such document or information shall be deemed to be incorporated by reference as an exhibit to the registration statement of which this Prospectus Supplement forms a part. In addition, we may incorporate by reference into this Prospectus Supplement, or the registration statement of which it forms a part, other information from documents that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, if and to the extent expressly provided therein.

Any statement contained in this Prospectus Supplement, the Base Prospectus or in a document incorporated or deemed to be incorporated by reference herein or therein, or deemed to be incorporated by reference herein or therein, will be deemed to be modified or superseded, for the purposes of this Prospectus Supplement, to the extent that a statement contained in this Prospectus Supplement or in any other subsequently filed document that is also incorporated or is deemed to be incorporated by reference in this Prospectus Supplement modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement will not be deemed an admission for any purpose that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this Prospectus Supplement.

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THE COMPANY

The following is a summary of information pertaining to the Company and does not contain all the information about the Company that may be important to you. You should read the more detailed information including, but not limited to, the Base Prospectus, the 2019 AIF, 2019 Annual Financial Statements, 2019 Annual MD&A, our Q3 Interim Financial Statements, Q3 Interim MD&A and the other documents that are incorporated by reference into this Prospectus Supplement.

Business of the Company

The Company is one of the world’s largest cannabis companies. The Company has grown, both organically and via strategic acquisitions, with the vision of creating a world-class cultivation platform producing high quality, consistent cannabis for both the global medical and Canadian consumer use markets. Underpinning this vision is the Company’s differentiated purpose-built growing facilities, which we believe are the most technologically advanced indoor agricultural growing facilities in the world. These facilities consistently produce high-quality cannabis at scale and aim to lower the risk of crop failure, which allows the Company to lower per-unit production costs. We also recognize the need for robust research into the myriad of potential medical uses of cannabis and, as such, have built a leading plant and human science team.

With operations established in the Canadian market, the Company has strategically allocated resources to growing its international footprint to address the growing number of countries legalizing medical cannabis use around the world.

The Company’s principal strategic business lines are focused on the production, distribution and sale of cannabis in Canada and internationally. The Company currently views its primary market opportunities as follows:

Summary of Recent Developments

Common Share Consolidation

On April 8, 2020, the Company received notification from the NYSE that, as a result of its common share price falling below an average of U.S.$1.00 for a consecutive 30 trading-day period, it was not in compliance with one of the NYSE’s continued listing standards. As a partial response to the NYSE notification, on April 12, 2020 the Board approved the Consolidation or our outstanding common shares on the basis of one (1) post-Consolidation common share for twelve (12) pre-Consolidation common shares (the “Consolidation Ratio”). The Consolidation restored compliance with the NYSE’s continued listing standards and we expect our NYSE listing to continue to provide access to a broad range of investors, access to equity capital and trading liquidity. The Company’s past non-compliance with the NYSE’s price listing standard does not affect its business operations or its reporting requirements to any regulatory authorities, nor does it result in a breach or cause an event of default under any of the Company’s agreements with its lenders. In addition, the Company’s past non-compliance with the NYSE price listing standard does not affect the continued listing and trading of our common shares on the TSX. The Consolidation was completed on May 11, 2020 pursuant to section 54(1) of the Business Corporations Act (British Columbia) (the “BCBCA”), with the result that the number of our issued and outstanding common shares was reduced from 1,321,072,394 common shares prior to the Consolidation to 110,089,377 common shares following the Consolidation. Pursuant to section 83 of the BCBCA, each fractional common share remaining after completion of the Consolidation that was less than half (¹⁄₂) of a whole common share was cancelled without consideration to the holders thereof and each fractional common share that was at least half (¹⁄₂) of a whole common share was increased to one whole common share. Additional changes to the Company’s capital structure resulting from the Consolidation are detailed below under “Consolidated Capitalization”.

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Amended ATM Sales Agreement

On May 14, 2019 we entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC and BMO Capital Markets Corp. (the “Initial Sales Agents”), which provided for the issuance and sale from time to time, through or to the Initial Sales Agents, as our agents or principal, of up to U.S.$400,000,000 of common shares (the “ATM Facility”). On April 15, 2020 we entered into an amendment to the Sales Agreement with the Initial Sales Agents, CIBC World Markets Corp. and AltaCorp Capital Inc. to increase the number of common shares that may be sold pursuant to the ATM Facility to a maximum of U.S.$650,000,000 (the “Amendment” and the Sales Agreement, as so amended, the “Amended Sales Agreement”) resulting in an additional U.S.$250,000,000 of common shares that may be distributed pursuant to the ATM Facility.

Acquisition of Reliva

In connection with the Acquisition, we issued the Resale Shares to the Selling Shareholders. The Acquisition represents our initial expansion into the United States CBD market.

Reliva, based in Natick, Massachusetts, is a U.S. provider of hemp derived CBD products for consumers. Through partnerships with wholesalers and retailers, including 8 of the 20 top convenience store chains, Reliva’s products, which include CBD consumables such as drink mixes and gummies, as well as body lotions, lip balms, and other CBD products, are available in over 20,000 retail stores in the United States. Upon completion of the Acquisition, the Reliva management team will remain in place with Miguel Martin continuing as president of Aurora USA and joining the executive leadership team of Aurora. The Acquisition of Reliva is not considered a “significant acquisition” to Aurora under Canadian National Instrument 51-102.

The Purchase and Sale Agreement provides for the payment of the following consideration by us to the Selling Shareholders:

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We have agreed to indemnify the Selling Shareholders against certain liabilities and expenses and to contribute to payments that the Selling Shareholders may be required to make in respect thereof that are directly or indirectly based on or resulting from the resale of the Resale Shares.

In connection with the completion of the Acquisition, we entered into a Second Amendment to the First Amended and Restated Credit Agreement dated September 4, 2019, as amended by an amendment dated March 25, 2020.

Additional information on the Acquisition is provided in the Reliva MCR which is incorporated herein by reference.

Additional risks that we face as a result of our completion of the Acquisition are described below under “Risk Factors – Risks Related to the Acquisition“.

COVID-19 Pandemic

The Company is closely monitoring the rapid evolution of COVID-19 with a focus on the jurisdictions in which the Company operates. During this period of uncertainty, it is our priority to safeguard the health and safety of our personnel, support and enforce government actions to slow the spread of COVID-19, and continually assess and mitigate the risks to our business operations. The Company has taken responsible measures to maximize the safety of staff working at all of its facilities. This includes reorganizing physical layouts, adjusting schedules to improve physical distancing, implementing extra health screening measures for employees and applying rigorous standards for personal protective equipment. The Company has also introduced a special bonus pay program for active facility-based staff. The Company continues to maintain regular communications with legal and government representatives, suppliers, customers and business partners to identify and monitor any potential risks to our ongoing operations.

As at the date of this Prospectus Supplement, the production and sale of cannabis have been recognized as essential services across Canada and Europe. Consumer cannabis sales are primarily with government bodies, which continue to offer end customers online ordering and home delivery options. Consumer market retail stores are generally permitted to remain open subject to adhering to the required social distancing measures. All of the Company’s facilities in Canada and internationally continue to be operational and we continue to work closely with local, national and international government authorities to ensure that we are following the required protocols and guidelines related to COVID-19 within each region. Although there have not been any significant impacts to the Company’s operations to date, the Company cannot provide assurance that there will not be disruptions to its operations in the future.

See “Risk Factors—Infectious diseases, including the COVID-19 pandemic, and related government responses could have a material and adverse effect on our business, financial condition and results of operations.” for a further discussion on the potential impacts of COVID-19.

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SELLING SHAREHOLDERS

The Resale Shares qualified by this Prospectus Supplement are those of our common shares which we issued to the Selling Shareholders upon completion of the Acquisition. We agreed in the Purchase and Sale Agreement to register the resale of the Resale Shares by the Selling Shareholders under the Securities Act and to bear certain related fees and expenses, as described below. The participation of any Selling Shareholder in the filing of this Prospectus Supplement is not an indication of such Selling Shareholder’s intention to sell the Resale Shares at any particular time or in any particular amount, or at all.

We are qualifying resales of the Resale Shares in accordance with the registration rights granted to the Selling Shareholders under the Purchase and Sale Agreement in order to permit the Selling Shareholders to offer the Resale Shares for sale or other disposition from time to time in the manner described below under “Plan of Distribution”. Under the Purchase and Sale Agreement, we will be responsible for payment of all expenses incurred in connection with preparing this Prospectus Supplement and the Base Shelf Prospectus, including all filing and listing fees, printing and copying expenses, fees and disbursements of our legal counsel and fees and disbursements of our independent public accountants. Under the Purchase and Sale Agreement, each Seller will be responsible for payment of all brokerage or selling agent commissions, out-of-pocket expenses incurred by a Seller, fees and disbursements of legal to counsel to the Seller and any transfer taxes incurred in connection with any sales of the Resale Shares by the Seller pursuant to this Prospectus Supplement.

The following table sets forth the identities of the Selling Shareholders and certain information regarding the Selling Shareholders’ ownership of the Resale Shares before and after the completion of the Offering. All Resale Shares shown below are owned beneficially and of record by the Selling Shareholders as of the date of this Prospectus Supplement. Except for the ownership of the Resale Shares, the Selling Shareholders have not had any material relationship with us within the past three years.

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PLAN OF DISTRIBUTION

We are registering the resale of the Resale Shares pursuant to a registration statement filed under the Securities Act on Form F-10 (SEC File No. 333-230692) to permit the resale of the Resale Shares by the Selling Shareholders in the United States, from time to time, after the date of this Prospectus Supplement. We will not receive any of the proceeds from any sale by the Selling Shareholders of the Resale Shares.

Each Selling Shareholder (which, as used herein, includes donees, pledgees, transferees or other successors-in-interest selling Resale Shares or interests in Resale Shares received after the date of this Prospectus Supplement from a Selling Shareholder as a gift, pledge, partnership distribution or other transfer) may, from time to time, sell, transfer or otherwise dispose of any or all of their Resale Shares or interests in Resale Shares on any stock exchange, market or trading facility in the United States on which the Resale Shares are traded or in private transactions within the United States. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

The Selling Shareholders may use any one or more of the following methods when disposing of Resale Shares or interests therein:

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The Selling Shareholders may, from time to time, pledge or grant a security interest in some or all of the Resale Shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Resale Shares, from time to time, under this Prospectus Supplement, or under an amendment to this Prospectus Supplement filed pursuant to General Instruction II.L. of Form F-10 or other applicable provision of the Securities Act amending the list of Selling Shareholders, as necessary, to include the pledgee, transferee or other successors in interest as Selling Shareholders under this Prospectus Supplement. The Selling Shareholders also may transfer the Resale Shares in other circumstances, in which case the transferees, pledgees or other successors in interest may be the selling beneficial owners for purposes of this Prospectus Supplement.

Subject in each case to applicable law, in connection with the sale of the Resale Shares or interests therein, the Selling Shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the Resale Shares in the course of hedging the positions they assume. The Selling Shareholders may also sell Resale Shares short and deliver these securities to close out their short positions, or loan or pledge the Resale Shares to broker-dealers that in turn may sell these securities. The Selling Shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of Resale Shares offered by this Prospectus Supplement, which Resale Shares such broker-dealer or other financial institution may resell pursuant to this Prospectus Supplement (as supplemented or amended, as necessary, to reflect such transaction).

Each of the Selling Shareholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of Resale Shares to be made directly or through agents. We will not receive any of the proceeds from the Offering.

We have agreed under the Purchase and Sale Agreement to pay certain expenses incident to the registration of the Resale Shares, provided that each Seller will be responsible for payment of applicable brokerage or selling agent commissions. See above under “Selling Shareholders”.

The Selling Shareholders also may resell all or a portion of the Resale Shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule.

The Selling Shareholders and any underwriters, broker-dealers or agents that participate in the sale of the Resale Shares or interests therein may be “underwriters” within the meaning of Section 2(a)(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the Resale Shares may be underwriting discounts or commissions under the Securities Act. Selling Shareholders who are “underwriters” within the meaning of Section 2(a)(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.

Under the securities laws of some states of the United States, the Resale Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Resale Shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification is available and is complied with.

This Prospectus Supplement has not been filed in respect of, and will not qualify, any distribution of the Resale Shares in Alberta or in any other province or territory of Canada at any time.

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We have advised the Selling Shareholders that the anti-manipulation rules of Regulation M under the Exchange Act (“Regulation M”) may apply to sales of Resale Shares in the market and to the activities of the Selling Shareholders and their affiliates, which may limit the timing of purchases and sales of any of the Resale Shares by the selling Shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of our securities to engage in market-making activities with respect to the Resale Shares. In addition, to the extent applicable we will make copies of this Prospectus Supplement (as it may be amended from time to time) available to the Selling Shareholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. We and the Selling Shareholders may indemnify any broker-dealer that participates in transactions involving the sale of the Resale Shares against certain liabilities, including liabilities arising under the Securities Act.

We have agreed, jointly and severally, to indemnify the Selling Shareholders against certain liabilities, including liabilities under the Securities Act, relating to the registration of the Resale Shares offered by this Prospectus Supplement.

There can be no assurance that any shareholder will sell any or all of the Resale Shares registered pursuant to the registration statement, of which this Prospectus Supplement and the accompanying Prospectus form a part.

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RISK FACTORS

Investing in the Resale Shares is speculative and involves a high degree of risk.

You should carefully consider the risks below and under the heading “Risk Factors” in the accompanying Base Prospectus and in the 2019 AIF, 2019 Annual MD&A and our Q3 Interim MD&A, and the other documents incorporated by reference into this Prospectus Supplement that summarize the risks that may materially affect our business before making an investment in the Resale Shares. See “Documents Incorporated by Reference”. If any of these risks occur, our business, results of operations or financial condition could be materially adversely affected. In that case, the trading price of our common shares could decline, and you may lose all or part of your investment. The risks set out in the documents indicated above are not the only risks we face. You should also refer to the other information set forth in this Prospectus Supplement, the Base Prospectus and the documents incorporated by reference.

Infectious diseases, including COVID-19 pandemic, and related government responses could have a material and adverse effect on our business, financial condition and results of operations

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. The Company’s business, including its operations, supply chains and interactions with counterparties, and its financial condition may be adversely impacted by the effects of COVID-19 and other infectious diseases.

The extent to which COVID-19 and other infectious diseases may impact the Company’s business, including its operations and the market for its securities and its financial condition, will depend on future developments, which are highly uncertain and cannot be predicted at this time. These include the duration, severity and scope of the outbreak and the actions taken by applicable governmental entities to address and mitigate COVID-19 or any other infectious diseases. In particular, the continued spread of COVID-19 globally could materially and adversely impact the Company’s business including, without limitation, employee health, workforce productivity, increased insurance premiums, limitations on travel, disruption to supply chains and the ability to deliver the Company’s products to end customers. In addition, government efforts to curtail the spread of COVID-19 may result in temporary or long-term suspensions or shut-downs of our operations, impact our customers and affect our supply chain. Such suspensions and disruptions may have a material and adverse effect on the Company’s business, financial condition and results of operations.

In connection with COVID-19, we are taking additional safety measures at our facilities. However, such measures and related government mandates may not be effective, and one or more of our employees may get sick and may come to work infected, necessitating a short or long-term closure of the affected facilities, disrupting production. Such measures and mandates may also increase our expenses and otherwise impair our production levels or cause us to close or severely limit production at our facilities. Further, legal cannabis dispensaries in certain Canadian markets may close voluntarily or be forced to close by the provincial governments, reducing our ability to distribute cannabis. For example, the Ontario government required retail dispensaries in the province to close for a short period, after which they were allowed to reopen, subject to certain limitations. In addition, consumer demand for cannabis and our other products may be reduced as a result of reductions in consumers’ disposable income associated with lay-offs and work or pay limitations due to mandatory social distancing and lockdown measures implemented by governments in the geographies where we operate. Production limitations or stoppages, social distancing measures and other impediments affecting our suppliers, partners or our facilities, should they materialize, may make it difficult, more costly, or impossible for us to conduct portions of our business. Limitations on the function of Health Canada and other regulators as a result of remote work of its employees or redeployment of its resources to addressing the pandemic may delay our communications with the regulatory authorities and delay renewal of our existing licences or the receipt of additional licences required for our operations, should such licences be sought. If macroeconomic conditions continue to worsen in Canada and around the world, demand for cannabis and our other products may significantly decline and industry participants, including our customers and suppliers, may face financial hardship. In addition, the increased market volatility resulting from global business and economic disruption related to the pandemic and measures to contain it has made it more difficult for companies to access capital markets. The duration and severity of the COVID-19 pandemic is currently unknown, and the pandemic may continue for a significant period of time. Any of the foregoing may adversely affect our business, financial position and results of operations.

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Due to the rapid developments and uncertainty surrounding COVID-19, it is not possible to reliably estimate the length and severity of these developments and its impact on the Company. As a result, any of the risks associated with COVID-19 as described above may impact key estimates and assumptions used in the Company’s financial statements. Such changes could be material and may impact, among other things, an impairment of long-lived assets including intangibles and goodwill.

Risks Relating to the Acquisition

We may be unable to realize the anticipated benefits of the Acquisition.

We are acquiring Reliva to realize anticipated benefits of entering the U.S. CBD market. The anticipated benefits are necessarily based on projections and assumptions. We may not realize the anticipated benefits to the extent, or in the time frame, anticipated, or at all. If we do not realize the anticipated benefits, our growth strategy and future profitability could be negatively affected. Our ability to realize the benefits of the Acquisition will depend in part on the timely integration of organizations, operations, procedures, policies and technologies, as well as the harmonization of differences in the business cultures of the two companies and the retention of key personnel. The challenges involved in this integration also include preserving Reliva’s customer, channel partner, supplier and other important relationships; minimizing the diversion of management attention from ongoing business concerns; ensuring that the internal controls over financial reporting of the combined company are effective; and coordinating operations, relationships and facilities in a jurisdiction that we have not previously operated in. Our failure to meet the challenges involved in the integration of Reliva’s business and operations or to otherwise realize the anticipated benefits of the Acquisition may adversely affect the future results of our U.S. business, which could have a material adverse effect on our business, financial condition and results of operations more generally.

We may fail to comply with the rapidly developing regulatory environment in the United States.

We will be operating in a new jurisdiction in which the regulatory environment related to the manufacture, marketing and sale of CBD products is rapidly developing and we may not always succeed in complying fully with applicable regulatory requirements. Our operations in the United States are subject to various laws, regulations and guidelines by governmental authorities relating to the manufacture, marketing and sale of CBD products derived from “industrial hemp,” including, the U.S. Food and Drug Administration (the “FDA”), the U.S. Drug Enforcement Administration (the “DEA”) and the U.S. Federal Trade Commission (the “FTC”), and similar state regulators in each of the states in which we operate or our products are marketed and sold. As used in this prospectus supplement, “industrial hemp” means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a tetrahydrocannabinol (“THC”) concentration of not more than 0.3% on a dry weight basis. Achievement of our business objectives in the United States is contingent, in part, upon compliance with regulatory requirements enacted by federal and state regulatory authorities related to our business and manufacturing, marketing and selling CBD products in the United States. The failure to comply with, or enforcement by, these regulatory regimes could have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally.

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There is significant legal and regulatory uncertainty in the United States regarding the manufacturing, marketing and sale of CBD products and the interpretation or application of, or changes to, laws and regulations related to the manufacturing, marketing and sale of CBD products may have a material adverse effect on our U.S. business.

On December 20, 2018, the U.S. Agriculture Improvement Act of 2018 (the “2018 Farm Bill”) came into effect in the United States. The 2018 Farm Bill, among other things, removed what is often referred to as “industrial hemp” from the U.S. Controlled Substances Act and amended the U.S. Agricultural Marketing Act of 1946 to permit the production and sale of industrial hemp in the United States. The 2018 Farm Bill tasked the U.S. Department of Agriculture (the “USDA”) with promulgating regulations in relation to the cultivation and production of industrial hemp. The 2018 Farm Bill also directed the USDA to promulgate federal regulations that would apply to the production of industrial hemp in every state which does not put forth a state industrial hemp plan for approval by the USDA. The USDA issued an interim final rule in October 2019. Various states are in the process of applying to the USDA for approval of their industrial hemp production regulations and certain state plans have been approved by the USDA. On February 27, 2020, the USDA announced the delay of certain requirements under its interim final rule, including the requirement for labs to be registered by the DEA and the requirement that producers use a DEA-registered reverse distributor or law enforcement to dispose of non-compliant plants under certain circumstances. The 2018 Farm Bill provides that its provisions do not preempt or limit state laws that regulate the production of industrial hemp. Accordingly, some states may choose to restrict or prohibit some or all industrial hemp production or sales within the state and variances in states’ laws and regulations on industrial hemp are likely to persist. Further, each state has discretion to develop and implement its own laws and regulations governing the manufacturing, marketing, labeling, and sale of industrial hemp products, which has created a patchwork of different regulatory schemes applicable to such products in the various states.

Under the 2018 Farm Bill, the FDA has retained authority over the U.S. Federal Food, Drug, and Cosmetic Act (the “FFDCA”)-regulated products (e.g., drugs (human and animal), food (human and animal), dietary supplements and cosmetics) containing industrial hemp and ingredients derived from industrial hemp, including CBD. The FDA has taken the position that CBD is prohibited from use as an ingredient in food and dietary supplements. This position is based on the FDA’s interpretation of the drug exclusion rule in the FFDCA. The drug exclusion rules provides that a substance that has been approved and/or has been subject to substantial clinical investigations as a drug may not be used in a food or dietary supplement, unless the substance was first marketed in a food or dietary supplement prior to the initiation of substantial clinical investigations of the substance as a drug. The FDA’s position is that CBD was not marketed in a food or dietary supplement prior to the time CBD was investigated and approved as a drug (despite the historic use of hemp as consumable product) and, therefore, CBD may not be used as an ingredient in food and dietary supplements.

To date, despite public statements, the FDA has not issued regulations regarding CBD as an ingredient in food and dietary supplements or taken any enforcement action in the courts asserting a violation of the U.S. Federal Food Drug & Cosmetic Act with respect to the manufacturing, marketing and sale of CBD products. However, the FDA has issued several “Warning Letters” to companies that have made unsubstantiated claims about their CBD products being able to treat medical conditions. Some of these letters were co-signed with the FTC and cited the companies for making health and other claims about the efficacy of CBD that were not substantiated by competent and reliable scientific evidence.

Until the FDA formally adopts regulations with respect to CBD products, there is a risk that the FDA could take action against our CBD ingestible products sold in the United States, which could include “Warning Letters,” enforcement actions arising from civil, administrative or other proceedings, fines, penalties, administrative sanctions, settlements, injunctions, product recalls and/or seizures. Moreover, states also have regulatory authority through their own food, drug and cosmetic safety laws and we are subject to similar risks in each state in which our CBD ingestible products are manufactured, marketed, sold, including enforcement actions arising from civil, administrative or other proceedings, fines, penalties, administrative sanctions, settlements, injunctions, product recalls and/or seizures. Any of these actions by federal or state regulators against us and our CBD ingestible products in the United States would have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally.

The FDA and state regulatory authorities could seek to regulate topical products that contain CBD in the United States on the basis that they are being used to treat, mitigate or prevent disease or for use in affecting the structure or any function of the body. For example, the FDA has sometimes asserted that a product qualifies as a drug based solely on the presence of an ingredient widely understood to have drug effects, even in the absence of express claims about them. Consequently, even though we do not make any health or other claims about any of CBD products sold in the United States, topical or ingestible, the FDA or a state regulator could still assert that the products are intended for use as drugs. Ultimately, if the FDA or a state regulator asserts its authority over our topical products, and we cannot or elect not to comply with the onerous regulatory requirements, we could be prevented from producing, marketing and selling topical products containing CBD in the United States. Likewise, if states enforce or adopt regulatory interpretations or restrictions that limit our ability to market our topical products containing CBD in such states it could have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally.

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We may be required to obtain additional licenses, authorizations, approvals and permits in connection with our U.S. business.

We may be required to obtain and maintain certain U.S. federal or state permits, licenses and approvals in the United States relating to the manufacture, marketing and sale of CBD products. We may be unable to obtain or maintain any necessary licenses, permits or approvals. To the extent such permits and approvals are required and not obtained, we may be prevented from operating and/or expanding our U.S. business, which would have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally.

We are subject to a variety of regulatory limitations related to marketing and advertising of our CBD products.

In the U.S., advertising is subject to regulation by the FTC under the Federal Trade Commission Act as well as the FDA under the FFDCA, including as amended by the U.S. Dietary Supplement Health and Education Act of 1994, and by similar state and local regulation. In recent years, the FTC, the FDA and state regulators have initiated numerous investigations of food and dietary supplement products both because of their CBD content and based on allegedly deceptive or misleading marketing claims and have, on occasion, issued “Warning Letters” due to such claims. Some U.S. states also permit content, advertising and labeling laws to be enforced by state attorneys general, who may seek civil and criminal penalties, relief for consumers, class action certifications, class wide damages and recalls of products sold by us. There has also been a recent increase in private litigation that seeks, among other things, relief for consumers, class action certifications, class wide damages and recalls of products. Any actions against us by governmental authorities or private litigants would have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally.

Our participation in the industrial hemp industry could subject us to unexpected enforcement action.

There is uncertainty concerning the legal status of industrial hemp and industrial hemp products containing industrial hemp-derived ingredients, including CBD. The status of products derived from the hemp plant, under both federal and state law can depend on the THC content of the plant or derivative (including whether the plant meets the statutory definition of “industrial hemp”), whether the cultivator, processor, manufacturer or product marketer engages in cannabis-related activities for research versus purely commercial purposes, as well as the form and intended use of the product. Under U.S. federal law, products containing CBD may be unlawful if derived from cannabis, including hemp, with a concentration greater than 0.3% on a dry weight basis or if derived from industrial hemp grown outside the parameters of an approved industrial hemp pilot program or industrial hemp cultivated in violation of the 2018 Farm Bill. Even after enactment of the 2018 Farm Bill, the DEA may not treat all products containing industrial hemp-derived ingredients, including CBD, as exempt from the U.S. Controlled Substances Act. If the DEA takes action against us or other participants in the industrial hemp industry, this would have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally.

We, or the industrial hemp industry and CBD products more generally, may receive unfavorable publicity or become subject to negative consumer perception.

We believe the industrial hemp industry and the manufacturing, marketing and sale of CBD products are highly dependent upon broad social acceptance and consumer perception regarding the safety, efficacy and quality of the products, as well as consumer views concerning regulatory compliance. Consumer perception of our products can be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention, market rumors or speculation and other publicity regarding the consumption of CBD products. There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to industrial hemp or CBD markets or any particular product, or consistent with earlier publicity. Our dependence upon consumer perceptions means that adverse scientific research reports, findings, regulatory proceedings, litigation, media attention or other publicity, whether or not accurate or with merit, could have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally. Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of industrial hemp or CBD in general, or our products specifically, could have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally. Additionally, the industrial hemp industry and CBD products may be impacted by perceived similarities or differences between industrial hemp and CBD, on the one hand, and cannabis that is subject to the U.S. Controlled Substances Act, on the other hand. Consumers, vendors, distributors, channel partners, retailers, landlords/lessors, industry partners or third-party service providers may incorrectly perceive industrial hemp and CBD products as cannabis that is subject to the U.S. Controlled Substances Act, thereby confusing them for goods that are illegal under U.S. federal law, which could adversely impact our ability to sell our CBD products in the United States or to obtain the necessary services or supplies to manufacture, market and sell our CBD products in the United States. Additionally, the parties with which we do business, may perceive that they are exposed to reputational risk as a result of our non-U.S. legal cannabis business activities. For example, we may face challenges making U.S. dollar wire transfers or engaging any third-party supplier. While we have other banking relationships and believe that the services can be procured from other institutions, we may in the future have difficulty maintaining existing, or securing new, bank accounts or clearing services. Failure to establish or maintain business relationships in the United States would have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally.

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We may be subject to litigation in the United States related to marketing, distribution and sale of CBD products.

We may be subject to litigation, claims and other legal and regulatory proceedings from time to time in the ordinary course of our marketing, distribution and sale of our CBD products in the United States. Several companies in the CBD industry in the United States have recently become subject to an increasing number of purported class actions lawsuits relating to their food and dietary supplement products containing CBD. Should we face similar class actions filed against us, plaintiffs in such class action lawsuits, as well as in other lawsuits against us, may seek very large or indeterminate amounts, including punitive damages, which may remain unknown for substantial periods of time. Any such litigation could create a negative perception of our brands, could require us to expend significant resources to defend and could result in a significant award or injunction against us. Any of these results could have a material adverse effect on our U.S. business and could have a material adverse effect on our business, financial condition and results of operations more generally.

Risks Relating to Our Common Shares

Sales of a substantial number of our common shares may cause the price of our common shares to decline.

Any sales of substantial numbers of our common shares in the public market (including those that may be sold by the Selling Shareholders pursuant to this Prospectus Supplement) or the perception that such sales might occur, may cause the market price of our common shares to decline. The market price of our common shares may have been and could continue to be adversely affected by the expiration of lock-up periods which were applicable to certain of the Company’s shareholders, including affiliates of the Company.

Our common shares may experience price and volume volatility and the market price for our common shares may drop below the price you paid.

Securities markets may at times experience a high level of price and volume volatility, and the market price of securities of many companies have experienced wide fluctuations, which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. The price of our common shares has seen significant fluctuation in price over the past 24 months, as investor interest in companies involved in the production, marketing and sale of cannabis and cannabis related products has fluctuated. Such fluctuations may continue to affect the price of the Resale Shares and, as a result, investors may not be able to sell the Resale Shares at or above their acquisition cost.

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The market price of our common shares has in the past been, and may in the future be, subject to large fluctuations which may result in losses for investors. The factors which may contribute to market price fluctuations of our common shares include the following:

We may be subject to class action securities litigation.

In the past, following periods of volatility in the market price of public company securities, shareholders have often instituted class action securities litigation against those companies. We have in the past been and continue to be subject to such litigation. For example, the Company and certain of its directors and officers are subject to class action proceedings in the United States District Court for the District of New Jersey on behalf of persons or entities who purchased, or otherwise acquired, publicly traded securities of the Company between September 11, 2019 and November 14, 2019 and between October 23, 2018 and January 6, 2020. We may in the future be the target of similar litigation. As we intend to actively defend ourselves against any such litigation, significant legal expenses could be incurred, and we could suffer substantial reputational harm which could adversely affect future business opportunities and activity and the Company’s financial condition. Securities litigation could result in substantial costs and damages and divert management’s attention and resources. An adverse resolution of any actions or claims against the Company may materially affect our operating results and financial condition.

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Resales of our common shares in the public market during this Offering by our shareholders may cause the market price of our common shares to fall.

The Selling Shareholders may sell Resale Shares from time to time in connection with this Offering. The sale from time to time of these Resale Shares, could result in resales of our common shares by current shareholders concerned about the potential dilution in their holdings. Sales of substantial amounts of our common shares, or the availability of such securities for sale, could adversely affect the prevailing market prices for our common shares. A decline in the market prices of our common shares could impair our ability to raise additional capital through the sale of securities should we desire to do so.

The Selling Shareholders may sell Common Shares pursuant to this Offering, and the Company may sell additional common shares or securities convertible into common shares, which may adversely affect the market price of our common shares.

The Selling Shareholders may sell Registrable Commons Shares pursuant to the Offering or otherwise sell common shares, or securities convertible into or exchangeable for, or that represent the right to receive, common shares. The Company cannot predict the timing or the amount of future sales by the Selling Shareholders. In addition, the Company is generally not restricted from issuing additional common shares, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common shares. The market price of our common shares could decline as a result of such sales after this Offering or the perception that such sales could occur. With any additional sale or issuance of common shares or other securities that are convertible or exchangeable into, or that represent the right to receive, common shares, investors will suffer dilution to their voting power and economic interest in the Company. Furthermore, to the extent holders of the Company’s stock options or other convertible securities convert or exercise their securities and sell our common shares they receive upon such conversion or exercise, the market price of our common shares may decrease due to the increased number of common shares available in the market.

If we are or become a PFIC for U.S. federal income tax purposes, such treatment could result in adverse U.S. federal income tax consequences for U.S. shareholders.

U.S. investors should be aware that we believe, based on current business plans and financial expectations, we will not be a PFIC for the current tax year. However, we cannot be certain that we will not be so treated for the current year or for future tax years. If we are treated as a PFIC for any year during a U.S. shareholder’s holding period of our Resale Shares, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of our Resale Shares, or any so-called “excess distribution” received on our Resale Shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective “qualified electing fund” election, or “QEF Election”, or a “mark-to-market” election with respect to our Resale Shares. A U.S. shareholder who makes a QEF Election generally must report on a current basis its share of our net capital gain and ordinary earnings for any year in which we are a PFIC, whether or not we distribute any amounts to our shareholders. A U.S. shareholder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the Resale Shares over the shareholder’s adjusted tax basis therein. Each U.S. shareholder should consult their own tax advisors regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership and disposition of our Resale Shares.

We do not intend to pay dividends in the foreseeable future.

The Company has never declared or paid any dividends on our common shares. We intend, for the foreseeable future, to retain our future earnings, if any, to finance our business. As a result, the return on an investment in the Resale Shares will likely depend upon any future appreciation in value, if any, of the Resale Shares and on a shareholder’s ability to sell the Resale Shares. The payment of future dividends, if any, will be reviewed periodically by the Board and will depend upon, among other things, conditions then existing including earnings, financial conditions, cash on hand, financial requirements to fund our commercial activities, development and growth, and other factors that the Board may consider appropriate in the circumstances.

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USE OF PROCEEDS

Any sales or other dispositions of the Resale Shares covered by this Prospectus Supplement are solely for the account of the Selling Shareholders. Accordingly, we will not receive any proceeds from the sale or other disposition of the Resale Shares by the Selling Shareholders.

DESCRIPTION OF THE SECURITIES OFFERED

The Company is authorized to issue an unlimited number of common shares. For a description of the terms and provisions of our common shares, see “Description of Securities—Common Shares” in the Base Prospectus. As of May 27, 2020, there were 110,407,635 common shares outstanding (exclusive of the Resale Shares issued to the Selling Shareholders on May 28, 2020).

CONSOLIDATED CAPITALIZATION

Except as described below, there have been no material changes in our share and debt capital, on a consolidated basis, since March 31, 2020, being the date of the Q3 Interim Financial Statements incorporated by reference in this Prospectus Supplement, other than as described below:

Share Consolidation

The Consolidation of the Company’s outstanding share capital effective May 11, 2020 resulted in the following impacts to the Company’s share capital after giving effect to the Consolidation Ratio:

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Issuances of Additional Securities

From March 31, 2020 to the date of this Prospectus Supplement, the Company has completed the issuance of the following securities of the Company (with all common share references reflected on a post-Consolidation basis):

each as described further below under “Prior Sales”.

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The following table sets out details of all securities convertible or exercisable into common shares that were issued or granted by the Company during the 12 months prior to the date of this Prospectus Supplement (all of the information below has been presented on a post-Consolidation basis):

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