In the midst of the noise created by Aphria short sellers and Altria’s investment in Cronos Group, Aurora made several big moves on the North American cannabis market.
Aurora Cannabis has been low-key shopping for the whole week but most people didn’t pay much attention to it.
Aurora takes Control of Hempco
The United States of America are on their way to federally legalize hemp, one of the most versatile plants in use today. This will be a major change in the American farming culture, as hemp has been banned from farming for nearly a whole century.
However, this change will affect more than just the farmers as hemp is the main resource for mass producing CBD oil. Legalizing hemp in the US could greatly benefit both the North American cannabis market as well as the global CBD market.
Some Canadian producers have already predicted that this would happen and invested their money in hemp producers who have presence in the US.
Aurora was one of them, as the company bought an additional 10,754,942 shares in Hempco, increasing its ownership position to 52.7%. Hempco is a Canadian-based company with significant presence in Europe and North America.
The two companies originally entered into an agreement way back in September 2017, when Aurora created a private option agreement with Charles and Angela Holmes, owners of the bought shares.
High Tide gets $10 million from Aurora
Two days ago, High Tide announced its acquisition of Grass City, one of the biggest online retailers of cannabis accessories. The deal was valued at $6,730,000, and the transaction was unanimously approved by the boards of directors of both companies and is expected to close by the end of the year.
Just a day later, Aurora announced its intention to acquire High Tide and all its subsidiaries, as its newly formed Dutch subsidiary will actually take ownership of Grass City. High Tide Inc. is a privately held organization, which probably made it easier for Aurora to finalize the terms of the deal.
According to the agreement, Aurora will invest $10 million in High Tide Inc. and in return will receive 10,000 senior unsecured convertible debentures issued by High Tide priced at $1,000 per debenture, bearing an interest rate of 8.5% per annum convertible in aggregate to 13,333,333 common shares of High Tide, at $0.75 per share.
High Tide holds two wholesale businesses, Famous Brandz and RGR Canada, along with 19 Smoker’s Corner retail locations. They have 5 brands alltogether:
- Famous Brandz
- RGR Canada
- Canna Cabana
- Smokers Corner
The company currently serves more than 170,000 retail customers per year, a number that is surely going to increase with the addition of new cannabis retail stores.
Creating a presence in Mexico
The Farmacias Magistrales acquisition also happened pretty much out of nowhere, or at least that’s what it seemed like. The company became the first federally licensed importer of raw materials containing THC in Mexico, making it a huge acquisition target.
This deal came shortly after Aurora signed a supply agreement to provide Farmacias Magistrales with medical cannabis. Given that Mexico is on the verge of legalizing recreational cannabis as well, this is a great way for Aurora to create a foothold in the country.
Farmacias Magistrales already owns a 12,000 square foot facility which currently serves for the production of pharmaceuticals, but if need be Aurora could quickly repurpose it for something else.