Aurora be­comes ‘largest cannabis pro­ducer in the world’

Com­pany with HQ in Ed­mon­ton, an­nounced Mon­day it in­tends to buy all com­mon shares of MedRe­leaf Corp. for $3.2B

StarMetro Calgary - - CALGARY - KEVIN MAIMANN STARMETRO ED­MON­TON

A com­pany head­quar­tered in Ed­mon­ton has be­come the big­gest le­gal pot busi­ness on the planet af­ter an­nounc­ing a $3.2bil­lion ac­qui­si­tion Mon­day.

Aurora Cannabis Inc. an­nounced it in­tends to buy all com­mon shares of MedRe­leaf Corp., merg­ing two of Canada’s big­gest cannabis com­pa­nies into one worth as much as $7 bil­lion. That’s more than Cana­di­ans spent on cannabis in all of 2017.

“We are cre­at­ing the largest cannabis pro­ducer in the world,” Aurora’s chief cor­po­rate of­fi­cer Cam Bat­t­ley said.

Ac­cord­ing to Sta­tis­tics Canada, Cana­di­ans spent $5.7 bil­lion on weed in 2017, and 90 per cent of that was bought il­le­gally. Ac­cord­ing to an Aurora spokesper­son, the deal has launched the com­pany be­yond the value of On­tario-based Canopy Growth.

Aurora said it will have the ca­pac­ity to pro­duce an in­dus­try-lead­ing 570,000 kilo­grams of mar­i­juana per year.

“Not only will we have suf­fi­cient prod­uct to ser­vice (the Cana­dian mar­ket), we’re go­ing to have enough to greatly ex­pand our global sales,” Bat­t­ley said. “It’s an enor­mous ca­pac­ity.”

MedRe­leaf spe­cial­izes in med­i­cal mar­i­juana, and Bat­t­ley said it may be the only com­pany in the sec­tor with even bet­ter pro­duc­tion ef­fi­ciency than Aurora.

“We see many op­por­tu­ni­ties to share best prac­tices to op­ti­mize yields and qual­ity,” he said. Bat­t­ley promised Cana­dian med­i­cal pa­tients will be the com­pany’s first pri­or­ity, ahead of recre­ational and in­ter­na­tional mar­kets.

MedRe­leaf CEO and co­founder Neil Clos­ner said the in­tent in com­bin­ing the two com­pa­nies is to “lever­age each other’s strengths.”

The merged com­pany will be present on five con­ti­nents, with dis­tri­bu­tion ca­pa­bil­i­ties and sup­ply and li­cens­ing agree­ments in coun­tries in­clud­ing Ger­many, Italy, Brazil and Aus­tralia.

Aurora has estab­lished an Al­berta dis­tri­bu­tion agree­ment with Al­canna, the com­pany that owns Liquor De­pot stores. It was known as Liquor Stores N.A. be­fore re­brand­ing this spring with in­tent to en­ter the cannabis mar­ket. Aurora also has a na­tional dis­tri­bu­tion deal with Shop­pers Drug Mart. Read more at thes­tar.com

NATHAN DENETTE/THE CANA­DIAN PRESS

MedRe­leaf CEO Neil Clos­ner at a grow­ing fa­cil­ity in Markham, Ont., in 2016. Aurora Cannabis Inc. has a friendly deal to ac­quire MedRe­leaf Corp.

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