Aurora Cannabis Inc. is a Canadian licensed cannabis producer, headquartered in Edmonton. It trades on the Toronto Stock Exchange as ACB. As of late September 2018, Aurora Cannabis had eight licensed production facilities, five sales licences, and operations in 18 countries. It had a funded capacity of over 500,000 kilograms of cannabis production per annum. Aurora is the second largest cannabis company in the world by market capitalization, after Canopy Growth Corporation. The company began trading on the NYSE on October 23rd, 2018.
Aurora was founded in 2006 by Terry Booth, Steve Dobler, Dale Lesak and Chris Mayerson. Booth and Dobler collectively invested over $5 million of their own capital. The founding group secured a 160+ acre parcel of land in Mountain View County, Alberta, where they established Aurora’s first facility. The company received its licence to grow cannabis in 2014, making it the first cannabis producer to obtain a federal licence in that province.
They decided to establish the company in Alberta due to comparatively low corporate tax rates and an ideal farm credit program.
On November 27, 2014, Health Canada issued Aurora’s licence to sell medical cannabis. Since then they have built, and are operating, numerous growing facilities throughout Canada, and have acquired facilities in Canada and Europe.
On January 10, 2017, Aurora received a licence from Health Canada to sell cannabis oils, having been granted a licence to produce the oils in February 2016. Sales of four product lines of cannabis oils commenced in April, 2017.
Aurora grew through several acquisitions. By 2018 Aurora’s subsidiaries included Pedanios GmbH (Germany’s largest distributor of cannabis to pharmacies). CanvasRx (the largest medical cannabis patient outreach service in Canada). BC Northern Lights (an indoor growing supplies manufacturer). Aurora-Larssen Projects (a globally leading greenhouse engineering and design consultancy). and H2 Biopharma (a late-stage ACMPR applicant in Quebec.
By April 2018, the company had a market value of C$4.5 billion; revenue in 2017 totaled C$31.1 million. At the time, the company was concluding its takeover merger of previous competitor CanniMed Therapeutics. The takeover was finalized in January 2018, based on a C$1.1 billion deal. The subsequent plan to purchase MedReleaf was expected to make the company the largest in Canada with market capitalization of approximately $7 billion. Competitor Canopy Growth Corporation‘s market value exceeded that amount by $3.7 billion however after a partial takeover by Constellation Brands was announced in late August 2018. By 24 September 2018, however, Tilray Inc., a portfolio company of Seattle-based Privateer Holdings, with grow facilities in Nanaimo, B.C., had become the world’s second most valuable cannabis company with a market capitalization of about US$10 billion.
A report in mid September, by BNN Bloomberg, stated that Coca-Cola was considering the development of cannabis-infused beverages for medical purposes (with a non-psychoactive ingredient, CBD) and was in preliminary discussion with Aurora. Although Coke and Aurora then announced that they were merely studying the market, and had no plan to announce regarding the distribution such products at this time. Aurora’s shares increased and its market cap reached US$10.71 billion by 3:11pm on 18 September 2018.
On 20 September 2018, Tilray Inc., a portfolio company of Seattle-based Privateer Holdings, with grow facilities in Nanaimo, B.C., had become the world’s most valuable cannabis company but a major drop in share price (and a subsequent market capitalization of about US$10 billion) made it only the third largest, after Canopy Growth and Aurora. On 26 September 2018, Aurora reported fourth quarter (ended June 2018) revenues of +19% over the third quarter and +223% over the fourth quarter of 2017. On the same day, at the closing of the TSX, the company’s market capitalization was over US$11.6 billion.
All products are third-party laboratory tested with results displayed on the company’s website and mobile app. In March 2017, Aurora allowed public access to a simplified Certificate of Analysis (CoA) for every cannabis product available for sale on the company’s online store and mobile app. The system was developed in partnership with Anandia Labs Inc., a Canadian cannabis genetics and testing laboratory.
Aurora owns Pedanios GmbH, a wholesale importer, exporter, and distributor of medical cannabis in the European Union, based in Berlin, Germany. Pedanios is the EU’s largest distributor of cannabis by volume of product sold. As of March 2018, it is one of three distributors to offer cannabis flowers sourced from both Canada and the Netherlands.
In January, 2018, Aurora became the first private company to be granted a supply agreement to the Italian market through its German subsidiary Pedanios. Aurora announced on January 23, 2018 that the first tender would consist of three lots of different cannabinoid profiles totaling 100 kg.
On November 13, 2017, Aurora Cannabis delivered an all-stock takeover bid to CanniMed Therapeutics’s board of directors, which became public on November 14. It claimed that it had the support of 38% of shareholders. CanniMed management responded by rejecting the offer, and proposed an alternative merger with Newstrike Resources, a recreational cannabis firm, instead. CanniMed also enacted a “poison pill” to fend off the acquisition by enacting a rights plan that would allow CanniMed shareholders to vote on the Newstrike deal. On November 20, Aurora launched a hostile takeover bid for CanniMed, conditional on shareholders rejecting the Newstrike deal.
The Ontario Securities Commission intervened in this, the first major hostile takeover bid in Canada’s cannabis industry, ordering Aurora Cannabis Inc. to provide more disclosure regarding any ties to individuals “in a special relationship” with target CanniMed Therapeutics Inc. and blocking CanniMed from adopting the so-called “poison pill” defence. The ties were deemed unfounded by the Securities Commission. On January 17, 2018, Newstrike shareholders approved the proposed merger. On January 18, CanniMed postponed its shareholder vote on the Newstrike deal, submitting that it will hold talks with suitor Aurora Cannabis. On January 24, it was announced that Aurora Cannabis finally hammered out a deal to acquire CanniMed Therapeutics Inc. for $1.1 billion, and CanniMed dropped its plans to acquire Newstrike.
In March 2018, Aurora completed their acquisition of Cannimed, with both parties agreeing to the transaction on friendly terms. This agreement brought Aurora’s total patient count to 42,000 registered cannabis patients in Canada.
In mid-May 2018, the company announced a planned friendly takeover of MedReleaf in a $3.2 billion stock deal already approved by the directors of both companies. The deal still requires approval by shareholders and government regulators. After the takeover is completed, the company will be able to produce 570,000 kilograms of cannabis at its nine grow operations in Canada and two in Denmark, if it uses all of the available capacity. The value of the new company could be as high as $7 billion, making it substantially larger than Canopy Growth Corporation with its market cap of $6.45 billion. It would have distribution agreements in a number of countries, including Germany, Italy, Brazil and Australia.
Aurora has three operational facilities in Canada (Aurora Sky, Aurora Vie, and Aurora Mountain) plus two new facilities projected to be operational by the end of 2018, including a 1,000,000 square foot facility under construction in Odense, Denmark.
Aurora Mountain was Aurora’s first facility, completed in 2015. It is a 55,200-square-foot production facility in Mountain View County.
Aurora Vie is a 40,000-square-foot, fully licensed, indoor production facility in Pointe-Claire, Quebec. It was the second licensed producer in Quebec, and was acquired in 2017 for $7 million when it was about 80% complete
In 2017, Aurora Cannabis began construction of an automated 800,000-square-foot plant in Alberta that it said would be capable of producing 100,000 kilograms of cannabis annually. The land is part of the acreage owned by the Edmonton International Airport.
there could be up to a $9 billion annual market in Canada, including both adult-use recreational and medical cannabis sales. The global medical cannabis market outside of Canada could exceed $50 billion.
Recent News: 4-26-2019
Aurora Cannabis and EnWave Corporation Enter Global Licensing Arrangements
NYSE | TSX: ACB
EDMONTON and VANCOUVER, April 26, 2019 /CNW/ – Aurora Cannabis Inc. (“Aurora” or the “Company”) (TSX: ACB) (NYSE: ACB) (Frankfurt: 21P; WKN: A1C4WM) and EnWave Corporation (TSX-V:ENW) (FSE:E4U) (“EnWave”) announced today that the companies have entered into a royalty-bearing commercial license agreement (the “License”), providing Aurora with the exclusive rights to EnWave’s patented Radiant Energy Vacuum (REVTM) drying technology for the production of cannabis materials in the European Union, excluding Portugal. Aurora has also secured exclusive license options for both Australia and South America, excluding Peru, exercisable pursuant to minimum REV™ machine purchase order requirements. Additionally, Aurora has signed a non-exclusive sub-license (the “Sub-License”) to use REV™ technology in Canada.
The companies furthermore announce that Aurora has placed a purchase order for two of EnWave’s 120kW REVTM dehydration systems for its Aurora Sky and Aurora Sun facilities in Canada, as well as the intention to purchase a third 120kW REVTM dehydration system for its Aurora Nordic facility in Denmark within sixty days. The REVTM dehydration systems will be used to increase throughput of material for extraction and use in derivative cannabis products. Aurora has also acquired a 10kW pilot-scale REV™ machine for product development, protocol development and R&D.
Strategic Partnership Forged
EnWave’s patented REV™ technology is a rapid, low temperature, continuous drying method that maintains the optimal terpene profile, flavour, as well as other product attributes during the drying process. The company’s vacuum-microwave technology enables uniform drying with flexible moisture content, unattainable with freeze drying or air drying. Aurora and EnWave have agreed to enter into an Intellectual Property Agreement (the “IPA”) with the intent to jointly-develop new innovations relating to REV™ technology that are applicable to the cannabis industry. All intellectual property developed under the IPA will be owned by EnWave, but any realizable commercial value will be shared on an undisclosed basis with Aurora. All other terms of the IPA are confidential.
Pursuant to the License, Aurora will share an undisclosed percentage of the royalties generated through the sub-licensing of EnWave’s patent portfolio to sub-licensees in the jurisdictions where the Company holds the exclusive rights to REV™ technology. EnWave and Aurora will jointly benefit through economic alignment by working together to propagate the global cannabis industry with REV™ machinery.
Strategic Equity Investment
To further cement the economic alignment between the companies, Aurora has made a $10 millionstrategic equity investment in EnWave. Pursuant to the terms of a share purchase agreement between the parties dated April 25, 2019, Aurora has purchased 5,302,227 common shares in the capital of EnWave (the “EnWave Shares”) at a deemed price of $1.886 per share, based on the volume weighted average trading price (“VWAP”) for EnWave’s shares on the TSX Venture Exchange (the “TSXV”) for the five (5) consecutive trading days to and including April 22, 2019. As consideration for the EnWave Shares, Aurora issued to EnWave 840,576 common shares in the capital of Aurora (the “Aurora Shares”) at a deemed price of $11.8966 per share, based on the VWAP for Aurora’s shares on the Toronto Stock Exchange (the “TSX”) for the five (5) consecutive trading days to and including April 22, 2019. The EnWave Shares represent approximately 4.91% of the issued and outstanding common shares of EnWave on a non-diluted basis.
EnWave received conditional approval for the transaction from the TSXV on April 12, 2019. The TSX and NYSE have conditionally approved the listing of the Aurora Shares on such exchanges. Each of the EnWave Shares and the Aurora Shares will be subject to a hold period of four months and one day from the date of issuance pursuant to applicable securities laws.
“EnWave’s technology offers very significant benefits that further improve the economic returns on our Sky Class facilities,” said Terry Booth, CEO of Aurora. “The technology provides us with industrial-scale flow-through, reducing working capital requirements, accelerating time to market from harvest, as well as increasing our ability to produce bulk-sale cannabis for extraction and use in derivative products. Our ownership interest in EnWave and the exclusive license arrangement in many of our current and target markets creates the potential to generate additional financial synergies.”
Brent Charleton, CEO of EnWave, stated, “EnWave’s growth continues to accelerate, and we are delighted to have Aurora as an investor, industry partner and technology collaborator to further the enhancement and propagation of EnWave’s REV™ drying technology. This partnership brings together two innovation leaders in the cannabis industry, and we look forward to working closely with the team at Aurora to deliver further value to our stakeholders.”
CapEx and Working Capital Savings
Inclusion of EnWave’s REV™ technology in the design of the Aurora Sun and Aurora Nordic facilities will result in significant CapEx savings on drying space (smaller footprint) and related HVAC investments. Inclusion of the technology in the existing Aurora Sky facility will also free up space, which can be repurposed to increase the economic output of the facility.
EnWave’s REV™ technology furthermore reduces drying time from 5-7 days to less than one hour, resulting in significant working capital savings and speed to market of product. The technology has certain additional benefits, including the support of industrial scale flow-though, accelerating the ability for large-scale processing of cannabis and CBD-rich biomass into intermediate or finished product.
License Agreement Details
Aurora will have an exclusive license, with sub-licensing rights to EnWave’s REV™ technology in the European Union (excluding Portugal) and exclusive options to secure the same rights in South America(excluding Peru) and Australia. Aurora will pay EnWave a royalty on all cannabis products processed using the REV™ machinery. Aurora will receive an undisclosed share of royalties derived from any cannabis product dried with REV™ technology by sub-licensees in jurisdictions where it holds the exclusive license. Aurora will have a non-exclusive sub-license to the EnWave technology in Canadaand will pay EnWave a royalty on cannabis product processed in Canada using REV™ machinery.
Headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 625,000 kg per annum and sales and operations in 24 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. EU GMP certification has been granted to Aurora’s first production facility in Mountain View County, the MedReleaf Markham facility, and its wholly owned European medical cannabis distributor Aurora Deutschland.
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, HotHouse Consulting, MED Colombia, Agropro, Borela, ICC Labs, and Chemi Pharmaceutical – 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), Alcanna Inc. (TSX: CLIQ) and High Tide Inc. (CSE: HITI).
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
EnWave Corporation, a Vancouver-based advanced technology company, has developed Radiant Energy Vacuum (“REV™”) – an innovative, proprietary method for the precise dehydration of organic materials. EnWave has further developed patent-pending methods for uniformly drying and decontaminating cannabis through the use of REV™ technology, shortening the time from harvest to marketable cannabis products.
REV™ technology’s commercial viability has been demonstrated and is growing rapidly across several market verticals in the food, and pharmaceutical sectors including legal cannabis. EnWave’s strategy is to sign royalty-bearing commercial licenses with industry leaders in multiple verticals for the use of REV™ technology. The company has signed over twenty royalty-bearing licenses to date, opening up nine distinct market sectors for commercialization of new and innovative products. In addition to these licenses, EnWave has formed a Limited Liability Corporation, NutraDried Food Company, LLC, to develop, manufacture, market and sell all-natural cheese snack products in the United States under the Moon Cheese® brand.
EnWave has introduced REV™ as the new dehydration standard in the food and biological material sectors: faster and cheaper than freeze drying, with better end product quality than air drying or spray drying. EnWave currently has three commercial REV™ platforms:
- nutraREV® which is used in the food industry to dry food products quickly and at low-cost, while maintaining high levels of nutrition, taste, texture and colour;
- powderREV® which is used for the bulk dehydration of food cultures, probiotics and fine biochemicals such as enzymes below the freezing point, and
- quantaREV® which is used for continuous, high-volume low-temperature drying.
An additional platform, freezeREV®, is being developed as a new method to stabilize and dehydrate biopharmaceuticals such as vaccines and antibodies. More information about EnWave is available at www.enwave.net.
Neither the TSX, TSX Venture, NYSE, nor their Regulation Services Provider (as that term is defined in the policies of the TSX, TSX Venture and NYSE) accepts responsibility for the adequacy or accuracy of this release.
|Terry Booth, CEO||Brent Charleton, CEO|
|Aurora Cannabis Inc.||EnWave Corporation|