Aurora buys into Liquor Stores with marijuana outlets

Aurora Cannabis Inc. has signed a deal to buy a minority stake in Liquor Stores N.A. Ltd., which plans to launch a brand of marijuana retail outlets as Canada moves to legalize the drug for recreational use later this year.

Under the deal, the Edmonton basedlicensed marijuana producer will acquire a 19.9 per cent stake in the liquor store operator for $103.5 million through a non-brokered privateplacement. It will also have an ability to increase its interest in Liquor Stores up to 40 percent with an additional investment.

“This will allow us the speed to market that we were looking for,” said Aurora Cannabis’ chief corporate officer Cam Battley.

Alberta, where Liquor Stores has a vast retail footprint, is among the provinces that will allow private retailers to sell recreational cannabis when it is legalized in Canada this summer. Provinces such as Ontario and Quebec have tasked the provincial liquor boards to handle retail sales of marijuana.

Liquor Stores, which operates 231 liquor stores in Western Canada and several U.S. states, plans to establish and launch a brand of cannabis retail outlets. The publicly listed company has 178 locations in Alberta, 34 in B.C., and a presence in Alaska, Connecticut, New Jersey and Kentucky.

The retailer said Monday it will convert some of its existing stores into cannabis outlets and establish new locations.

Liquor Stores will also use a portion of the money to strengthen its existing liquor retail brands by renovating its existing outlets and for general corporate purposes.