Aurora Cannabis Inc has released an official statement claiming how encouraged they are by the proposed approach to the regulation of cannabis which was announced two days ago, which provides citizens of Canada with legal cannabis.
The document presented on Monday focuses on making a vibrant and inclusive cannabis market, but it will also make safety and education of its citizens a top priority.
This approach to regulating recreational cannabis works in Aurora’s benefit as well.
If the current plan goes into effect, it will most certainly validate the strategic choices made by Aurora, such as the Company’s investments in and partnerships with Hempco, and Radient Technologies which will allow for the production and sale of CBD from hemp.
“The proposed regulations, once implemented, further cement Canada’s position as the absolute global leader in the cannabis sector,” said Terry Booth, CEO.
This plan will also introduce a new type of cannabis license, which will largely benefit Aurora’s partner Radient Technologies, a so-called Licensed Processor.
The proposed new regulations also validate Aurora’s horizontal diversification strategy.
Aurora says this new type of license will provide them with a much more broadly diversified product offering.
Under this plan, pre-rolled cannabis, vaping solutions, concentrates, edibles and other similar products will be allowed so that consumers will have a wide variety of products to choose from.
Aurora Cannabis in the EU
Aurora Cannabis owns a German subsidiary going under the name Pedanios — the largest wholesale distributor of cannabis in the EU.
Given that the European market could potentially grow up to around 400 million potential customers, you could say they are extremely well positioned to make an impact as soon as the markets open.
“We are delighted that under these proposals cannabis would be removed from the Controlled Drug and Substances Act, and would instead be subject to the Cannabis Act and its regulations,” said Neil Belot, Chief Global Business Development Officer in Aurora Cannabis Inc.
Mr. Belot also pointed out that this is truly a historic day for Canada, as weed has been removed from the list of narcotics, and he urges other countries around Europe to do the same.
Aurora and Hempco Announce Closing of $3.2 Million
Hempco Food and Fiber Inc and Aurora Cannabis Inc have reached a deal worth ~$3.2 million, in which Hempco issued 10,558,676 units, at $0.3075 per unit, to Aurora Cannabis.
“We are very pleased to now be a major investor in, and partner with Hempco”, said Terry Booth. “Our partnership will also allow both companies to benefit from being able to source this material to produce high quality and lower cost CBD products for sale in Canada and for export.”
Aurora now holds approximately 33.6% of Hempco on a fully-diluted basis after the placement, and in addition to that Aurora has the rights to buy shares from two of Hempco’s principal owners.
Exercising that right will bring Aurora ownership of Hempco over 50%.
CanniMed Rejects Aurora’s acquisition offer
CanniMed management might be playing a game of musical chairs, as Aurora Cannabis has announced they will be launching a hostile takeover bid — meaning they will be going directly to the company’s shareholders or fighting to replace management to get the acquisition approved.
Their director has apparently already resigned.
Aurora’s offer of $456 million US ($582 million Canadian) , which valued CanniMed shares at CAD$24, was rejected by CanniMed management a few days ago.
Aurora Cannabis claims that 38% of CanniMed Therapeutics shareholders have agreed to the deal.
In case the acquisition gets subsequently approved by CanniMed shareholders, Aurora will be adding around 40,000 registered Canadian cannabis patients to their list.
Aside from that, by acquiring CanniMed they will also upgrade their infrastructure to produce an additional 130,000 kilos (286,600 pounds) of cannabis each year.