Aurora Cannabis Inc. (the “Company” or “Aurora”) (TSXV: ACB) (OTCQX: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) is pleased to announce its acquisition of Pedanios GmbH (“Pedanios”), a leading wholesale importer, exporter, and distributor of medical cannabis in the European Union (“EU”).
Pedanios, a federally licensed medical and narcotic wholesale and GMP inspected narcotic import company, holds all relevant licenses and permits, and has been successfully importing, exporting, and distributing cannabis for medical purposes since December 2015, into and within the EU.
In January 2017, German parliamentarians unanimously passed a new medical cannabis law, which appointed physicians as gatekeepers to access, established pharmacies as the point of sale, and introduced full insurance cost-coverage for medical cannabis patients across the country. In March 2017, when the new law came into force Pedanios’ monthly sales immediately doubled and growth continues to accelerate as Germany’s 80 million citizens begin to benefit from the improvements to patient access guaranteed by the new law.
Pedanios wholesales medical cannabis to a growing number of pharmacies – over 750 as of today – and offers the widest selection of products of any distributor in the German market, including ten of the fourteen products approved by the Bundesopiumstelle, a body of the German federal Health Ministry. All Pedanios’ existing supply contracts will remain in place.
“This is a transformational acquisition for Aurora, and a key step in our aggressive international expansion strategy,” said Neil Belot, Aurora’s Chief Global Business Development Officer. “The transaction will ensure ongoing and increasing high quality product is available to fuel Pedanios’ rapid growth, while positioning Aurora and Pedanios to seize upon opportunities together in Germany and the EU’s emerging cannabis industry.”
“Pedanios, with first mover success in the EU, has proven itself as one of the world’s most trusted and scalable importers, exporters, and distributors of wholesale medical cannabis. Patients, physicians, and pharmacies across the EU recognize the Pedanios brand as the trusted source for high quality GMP certified medical cannabis,” said Terry Booth, CEO. “The Pedanios team share Aurora’s vision, our high standards, and our intentions to play a leading role in shaping the future of the global cannabis industry. In addition, because the average market prices are higher in Germany than in Canada, we expect German sales to positively impact our average sales price per gram.”
“Canada and Germany are among the world leaders in medical cannabis, and as trailblazers in our respective countries, Pedanios and Aurora are well positioned to continue to drive innovation, expand our distribution network, and capture significant global market share,” said Patrick Hoffmann, Pedanios’ Co-Founder and Executive Partner. “We look forward to the synergies that our combined companies will deliver to shareholders and stakeholders alike.”
Under the terms of the purchase agreement, dated May 18, 2017, Aurora will pay a consideration to holders of Class B securities of Pedanios approximately 3,421,756 common shares of Aurora, priced at $2.14 per share. In addition, a total consideration of approximately $13,565,000 in cash and common shares is payable to the holders of Class A common shares of Pedanios, which are held by the two founders/Managing Directors of Pedanios who will continue to run the company. The cash portion for the two founders being $3,020,000 and the share portion being 4,895,026 common shares of Aurora, priced at $2.14 per share, of which 17% will become free trading 4 months after closing, with the balance becoming unrestricted in equal installments on a quarterly basis over 27 months, commencing in February 2018. Total shares of Aurora being issued over 3 years represent less than 2% of total shares outstanding. Aurora’s cash balance as of May 15, 2017 was $165,000,000. Values herein have been calculated based on an exchange rate of 1.51 Canadian dollars to every 1 Euros.
Pedanios, over the last 90 days, has achieved cash flow positive operations, with gross revenues of approximately CAD$1.15 million, and costs of approximately CA$1.00 million. Revenues for May, up to and including May 26, 2017, were approximately CAD$0.5 million, reflecting a 410% increase in the daily sales pace as compared to average for the 8 months prior to the introduction of the new law, and an increase over the April and March 2017 averages of 70% and 108%, respectively.
Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, and is currently constructing a second 800,000 square foot production facility, known as “Aurora Sky”, at the Edmonton International Airport, and has acquired, and is undertaking completion of, a third 40,000 square foot production facility in Pointe-Claire, Quebec, on Montreal’s West Island. In addition, the company is the cornerstone investor with a 19.9% stake in Cann Group Limited, the first Australian company licensed to conduct research on and cultivate medical cannabis. Aurora’s common shares trade on the TSX-V under the symbol “ACB”.
On behalf of the Board of Directors,
AURORA CANNABIS INC.
Terry Booth, CEO
This news release includes statements containing certain “forward-looking information” within the meaning of applicable securities law (“forward-looking statements”). Forward-looking statements are frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
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SOURCE Aurora Cannabis Inc.