Aphria enters strategic relationship with
local grower
Accelerates capacity increase by over one
year
LEAMINGTON, ON, Jan. 8, 2018 /CNW/ - Aphria Inc. ("Aphria"
or the "Company") (TSX: APH and US OTC: APHQF) today
announced that it has entered a strategic relationship
("GrowCo") with Double Diamond Farms ("Double
Diamond"), a local greenhouse grower, to provide an additional
120,000 kgs of annual cannabis production. The deal
accelerates Aphria's capacity increase by over a year versus
building out its existing 100-acre site. Combined with
Aphria's existing expected cannabis production of 100,000 kgs,
Aphria will have, what it believes to be, the largest fully funded
production capabilities in the industry in 2019. Aphria
anticipates that all 220,000 kgs of expected annual cannabis
production will be available for sale in January 2019, pending Health Canada
approvals.
"Since the Aphria journey began in early 2014, a key pillar to
the Aphria success story has been our unwavering commitment to
"powered by the sun", and nowhere is that more effective than in
Leamington, Ontario, where average
daily sunlight hours, intensity of optimum lighting and moderate
climate provides for ideal greenhouse growing," said Vic Neufeld, Chief Executive Officer.
"Building on our Leamington
advantages, I am very excited to announce that Aphria has entered
into another acquisition of Dutch greenhouse campus in the
Leamington area. Partnering with
Double Diamond, a major local greenhouse grower, Aphria will have
access to almost 32.0 acres (just less than 1,400,000 square feet
of greenhouse) plus 72,000 of infrastructure to service not only
the almost 32 acres, but a future build of another 32 acres.
Double Diamond is an industry-recognized leader in growing various
produce using the greenhouse technology advancements, and brings
solid talent and a labour pool necessary to support the annual
incremental capacity of over 120,000 kgs."
Owners of Double Diamond Chris and Benji
Mastronardi are pleased to have the opportunity to pair
Double Diamond Farms' growing experience with Aphria's growing
experience and sales expertise. "It made our decision to
partner with Aphria an easy choice," said Chris Mastronardi, Chief Executive Officer of
Double Diamond Farms. "The staff at Double Diamond Farms are
excited about this new challenge and to be able participate in the
burgeoning medical and adult recreational use cannabis markets,"
said Benji Mastronardi, President
and COO of Double Diamond Farms.
Double Diamond, a 49% partner in GrowCo, will supply the land,
new state of the art, Dutch style greenhouses, existing
infrastructure and employees for the venture. Aphria, holding
a controlling 51% interest in GrowCo, will supply its Standard
Operating Procedures, quality oversight and will apply for a second
Health Canada cultivation license for the site. The 100-acre
site is located on Highway 77 in Leamington, Ontario, has never had another
crop planted inside of it and abuts Aphria's existing second
campus, comprised of another 100-acre site.
GrowCo is expected to require funding of $80 - $100 million,
including acquiring the property based on appraised value, plus the
cost of retrofits, power co-generation facilities and other
cannabis specific investments. GrowCo will initially be
funded by a $10 million investment by
each of Aphria and Double Diamond. Additional funding will be
secured through traditional term debt from commercial
lenders. Any shortfall in funding, will be advanced by Aphria
as a loan.
We Have a Good Thing Growing.
(1) - pending Health Canada approvals
About Aphria
Aphria Inc., one of Canada's
lowest cost producers, produces, supplies and sells medical
cannabis. Located in Leamington,
Ontario, the greenhouse capital of Canada. Aphria is truly powered by sunlight,
allowing for the most natural growing conditions available. Aphria
is committed to providing pharma-grade medical cannabis, superior
patient care while balancing patient economics and returns to
shareholders.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain
information in this news release constitutes forward-looking
statements under applicable securities laws. Any statements that
are contained in this news release that are not statements of
historical fact may be deemed to be forward-looking statements.
Forward looking statements are often identified by terms such as
"may", "should", "anticipate", "expect", "potential", "believe",
"intend" or the negative of these terms and similar expressions.
Forward-looking statements in this news release include, but are
not limited to, statements with respect to internal expectations,
estimated margins, expectations for future growing capacity and
costs, the completion of any capital project or expansions, and
expectations with respect to future production costs.
Forward-looking statements necessarily involve known and unknown
risks, including, without limitation, risks associated with general
economic conditions; adverse industry events; marketing costs; loss
of markets; future legislative and regulatory developments
involving medical marijuana; inability to access sufficient capital
from internal and external sources, and/or inability to access
sufficient capital on favourable terms; the medical marijuana
industry in Canada generally,
income tax and regulatory matters; the ability of Aphria to
implement its business strategies; competition; crop failure;
currency and interest rate fluctuations and other risks.
Readers are cautioned that the foregoing list is not exhaustive.
Readers are further cautioned not to place undue reliance on
forward-looking statements as there can be no assurance that the
plans, intentions or expectations upon which they are placed will
occur. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those
anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
SOURCE Aphria Inc.