First License to Import, Manufacture,
Store, and Distribute Medical Cannabis Containing THC in
Mexico
TSX | NYSE: ACB
EDMONTON, Dec. 10, 2018 /PRNewswire/ - Aurora Cannabis Inc.
("Aurora" or the "Company") (TSX: ACB) (NYSE: ACB) (Frankfurt: 21P; WKN: A1C4WM) announced today
that, further to the Company's press release dated December 7, 2018, the Company has entered into a
Letter of Intent to acquire all of the issued and outstanding
shares of Farmacias Magistrales S.A. ("Farmacias"), subject to
customary due diligence provisions, the completion of
definitive agreements, and regulatory and government approval.
As previously announced, Farmacias recently became Mexico's first and only federally licensed
importer to date of raw materials containing THC, gaining the
necessary licenses, facilities, and permissions to import raw THC
material, and manufacture, store, and distribute medical cannabis
products containing over 1% THC. This transaction firmly
establishes Aurora's first-mover advantage in one of the world's
most populous countries, where more than 130 million people will
have federally legal access to a range of Aurora's non-flower
medical cannabis products containing THC.
Under the regulations governing the Mexican medical cannabis
market, domestic cultivation, import or sale in Mexico of dried flower products is prohibited.
Consequently, Farmacias is the only company to date with the
ability to supply THC containing products, and the only
THC-containing offerings available initially will be Aurora-sourced
higher-margin derivative products.
Transaction Highlights:
- Farmacias has been granted Mexico's first and only license to date to
import raw materials containing > 1% THC, a rigorous and
exacting process which took over four years to successfully
complete.
- Farmacias owns and operates a high-quality 12,000 sq. ft.
facility in Mexico City for the
production of pharmaceuticals. The facility is licensed for the
import of raw pharmaceutical ingredients, including cannabinoids
(THC and CBD).
- Products available for sale currently include:
-
- Pharmaceuticals - kidney disease, blood pressure,
anesthetic medications.
- Nutraceuticals - protein powders and vitamin
supplements.
- Cosmetics - anti-aging creams, hair growth products,
tanning lotions, etc.
- Farmacias has developed a strong and well-established
distribution network with an extensive potential reach across
Mexico through approximately
80,000 retail points for the sale of CBD products, as well as 500
pharmacies and hospitals for the distribution of THC products.
- Further licenses held by Farmacias enable the company to import
CBD concentrate and produce medical and wellness products, and the
transaction provides a powerful asset for Aurora in Latin America, complementing Aurora's large
CBD production footprint in Colombia and Uruguay, through MedColombia and ICC Labs,
respectively.
- Dried flower containing THC is currently prohibited for
domestic cultivation, import or sale in Mexico, creating a large potential market with
strong barriers to entry, permitting only the sale of higher-margin
derivative products.
Farmacias intends to use the imported THC and CBD concentrates
to produce various cannabis oil products for initial introduction
to the medical market. It furthermore intends to rapidly broaden
its portfolio of products to include capsules, topical
solutions, and sprays and various other delivery
formats. Farmacias is currently licensed to manufacture, among
others, oral, nasal, and suppository products.
Management Commentary
"This transaction positions Aurora with exclusive access to
supply THC-containing medical cannabis to a large market of more
than 130 million people, while also enabling us to capture the full
margin of the medical cannabis we sell there," said Terry Booth, CEO of Aurora. "Farmacias has a
large distribution network of both retail outlets and pharmacies,
which will enable us to quickly scale up our operations across
Mexico. Integrating Farmacias with
our operations in Canada and
Latin America will not only
accelerate growth, it will build substantial long-term shareholder
value."
Julio Sánchez y Tépoz, Secretary of the Federal Commission for
Protection Against Health Risks ("COFEPRIS"), the Mexican
government body responsible for medical cannabis licensing added,
"We are pleased to have issued the first THC licenses in the
country to Farmacias Magistrales, and we look forward to promoting
the development of a tightly regulated medical cannabis industry
that facilitates safe and effective access for the people of
Mexico."
Neil Belot, Chief Global Business
Development Officer for Aurora, noted, "Together, Farmacias and
Aurora will be well positioned to become a key player in the
development of the medical cannabis market in Mexico. We were impressed by the quality of
management, assets and operations, and look forward to working
closely with the Farmacias team to execute on our significant first
mover advantage."
Cesar Vargas Dominguez,
Commercial Director of Farmacias, added, "This transaction
validates our work over the last four years toward obtaining a
portfolio of exclusive licenses in Mexico, a complicated process which we have
now completed successfully. Aurora is our partner of choice
because of its production capacity, global reach, product quality,
patient-first culture, and commitment to a science-based approach
to medical cannabis. We look forward to becoming part of the Aurora
family and executing on the Mexican medical cannabis
opportunity."
Consideration to be paid for the acquisition of Farmacias will
be in shares of Aurora and based on a valuation of the proforma
distribution revenue projections of Farmacias. The consideration
payable by Aurora also includes a contingent portion of up to 25%
payable only upon the achievement of certain milestones over the
next 12 months related to operational metrics, such as maintaining
market share.
About Aurora
Headquartered in Edmonton, Alberta,
Canada with funded capacity in excess of 500,000 kg per
annum and sales and operations in 22 countries across five
continents, Aurora is one of the world's largest and leading
cannabis companies. Aurora is vertically integrated and
horizontally diversified across every key segment of the value
chain, from facility engineering and design to cannabis breeding
and genetics research, cannabis and hemp production, derivatives,
high value-add product development, home cultivation, wholesale and
retail distribution.
Highly differentiated from its peers, Aurora has established a
uniquely advanced, consistent and efficient production strategy,
based on purpose-built facilities that integrate leading-edge
technologies across all processes, defined by extensive automation
and customization, resulting in the massive scale production of
high quality product at low cost. Intended to be replicable and
scalable globally, our production facilities are designed to
produce cannabis of significant scale, with high quality,
industry-leading yields, and low per gram production costs. Each of
Aurora's facilities is built to meet EU GMP standards, and its
first production facility, the recently acquired MedReleaf Markham
facility, and its wholly owned European medical cannabis
distributor Aurora Deutschland, have achieved this level of
certification.
In addition to the Company's rapid organic growth and strong
execution on strategic M&A, which to date includes 15 wholly
owned subsidiary companies – MedReleaf, CanvasRX, Peloton
Pharmaceutical, Aurora Deutschland , H2 Biopharma, Urban
Cultivator, BC Northern Lights, Larssen Greenhouses, CanniMed
Therapeutics, Anandia Labs, HotHouse Consulting, MED Colombia,
Agropro, Borela, and ICC Labs – Aurora is distinguished by its
reputation as a partner and employer of choice in the global
cannabis sector, having invested in and established strategic
partnerships with a range of leading innovators, including: Radient
Technologies Inc. (TSXV: RTI), Hempco Food and Fiber Inc. (TSXV:
HEMP), Cann Group Ltd. (ASX: CAN), Micron Waste Technologies Inc.
(CSE: MWM), Choom Holdings Inc. (CSE: CHOO), Capcium Inc.
(private), Evio Beauty Group (private), Wagner Dimas (private), CTT
Pharmaceuticals (OTCC: CTTH), and Alcanna Inc. (TSX: CLIQ).
Aurora's Common Shares trade on the TSX and NYSE under the
symbol "ACB", and are a constituent of the S&P/TSX Composite
Index.
For more information about Aurora, please visit our investor
website, investor.auroramj.com.
Terry Booth, CEO
Aurora Cannabis Inc.
Forward looking statements
This news release includes statements containing certain
"forward-looking information" within the meaning of applicable
securities law ("forward-looking statements"). 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. The assumptions inherent in these forward
looking statements are subject to risks, including, but not limited
to; the entering into a definitive agreement with Farmacias and the
closing of the transaction, the variety and quantity of cannabis
products that Aurora will supply to Farmacias being approved by the
applicable regulatory authorities, the risks associated with the
establishment of tariff rates for products supplied buy Aurora to
Farmacias which are unknown at the present time, and the risk that
the applicable regulatory authorities may issue additional licenses
to third parties. The forward looking 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. The
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 the TSX, NYSE nor their Regulation Services
Provider (as that term is defined in the policies of the TSX and
NYSE) accepts responsibility for the adequacy or accuracy of this
release.
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SOURCE Aurora Cannabis Inc.