In 2018, Aurora burst onto the recreational cannabis market with its adult use brands and secured its position with big time strategic acquisitions.
As the year comes to an end, it’s time to do our yearly review of cannabis producers in Canada, and this year we’ve chosen to review 4 companies:
In today’s article, we’ll explore how Aurora Cannabis leveraged acquisitions, supply deals and management changes to stay at the top of the cannabis market.
The company started 2018 by announcing that their liquid assets surpassed $500 million, $320 million of which was cash. On top of that, they also announced a bought deal which brought them another $200 million in cash.
Last, but not the least, Aurora applied for the listing on the NYSE in October. But there’s more.
CanniMed and MedReleaf acquisitions
To this day, Aurora’s acquisitions of CanniMed and MedReleaf are the two biggest acquisitions in the cannabis space.
Aurora ended 2017 by purchasing 450,000 shares of CanniMed at an average price of $22.6 CAD. In January 2018, they went on a shopping spree trying to enact a hostile takeover of CanniMed.
Here are a few purchases of CanniMed shares Aurora made:
- 116,000 shares on January 3rd
- 91,800 shares on January 4th
- 24,600 shares on January 5th
- 7,400 shares on January 12th
- 10,800 shares on January 15th
All said and done, by the time Aurora and CanniMed announced a friendly takeover, Aurora had already bought over 700,000 shares of CanniMed. They purchased the remaining outstanding shares on March 8 and closed the biggest acquisition in the cannabis industry on May 2.
For the remaining 17,847,341 shares Aurora paid $98 million in cash and printed out approximately 50.6 million Aurora common shares. However, things were about to change soon.
The day after Aurora closed the CanniMed transaction, new rumors started popping up. On May 3, Aurora released a report confirming that they are in talks with MedReleaf.
At that point in time, MedReleaf was probably the fourth or fifth biggest producer in Canada, right after Canopy, Aphria, and Aurora.
Unlike CanniMed, executives at MedReleaf welcomed Aurora with open hands. Shareholders of MedReleaf received 3.5 Aurora shares for each MedReleaf share they owned, and the whole transaction was valued at more than $2.5 billion.
Other major transactions
Early in 2018, Aurora became the cornerstone investor in The Green Organic Dutchman (TGOD).
Aurora also participated in TGOD’s IPO in May and purchased 17.5% of the IPO issue (or 6.3 million units) priced at $3.65 per unit, for a total investment of $23.1 million CAD.
A while later, Aurora decided to spin out some of its US assets into a US-based company named Australis.
After taking control of Hempco in May, Aurora made several big moves:
- Increased stake in Alcanna to 25% ownership
- Acquired 9.14% of CTT Pharmaceutical, with warrants to increase ownership to 42.5%.
- Initiated the acqusition of Anandia Laboratories
Aurora also became the lead investor in Choom’s private placement, in which it later increased its investment for another $20 million CAD.
In September the board of directors approved the acquisitions of ICC Labs and the largest hemp producer in Europe Agropro, along with the hemp processor and distributor Borela.
In December, the company made another 2 deals—the first one was with Farmacias Magistrales after signing a supply deal with Mexico’s first and only federally licensed importer of raw materials containing THC.
Three days later Aurora announced its investment in High Tide so that the company would increase its exposure to the retail cannabis market.
Early in the year, Aurora struck several massive deals which really improved their global market position.
First they made a deal with TGOD according to which Aurora had the right to buy up to 20% of TGOD’s annual production of organic cannabis.
Then, they won the exclusive contract to supply Italy with medical cannabis through its wholly-owned German subsidiary Pedanios GmbH.
In February, Aurora signed a supply deal with the SAQ and an agreement with Shoppers Drug Mart to supply them if they receive their license from Health Canada.
Aurora is to supply Quebec with a minimum of 5,000 kg of cannabis per annum.
Later in April, CanniMed entered into a Letter of Intent to become the preferred supplier of medical cannabis to Pharmasave.
After that ,Aurora signed a 5-year deal with Ascent Industries Corp’s wholly-owned subsidiary, Agrima Botanicals Corp. According to the details of that deal, Agrima was to supply Aurora with up to 20,000 kg of dried cannabis flower and up to 6,000 kg of cannabis trim per year for the next 5 years.
Aurora announced in September that they had signed supply deals with British Columbia, Alberta, Ontario, Quebec, Nova Scotia, Yukon, Manitoba, PEI, and NL.
Big moves on the European market:
- Received importing license from the Polish Government
- Received required export permit and finished first shipment of cannabis to Czech Republic in November
- Finished cannabis shipment to Luxembourg
The last supply deal Aurora signed was in December, according to which they were to supply Farmacias Magistrales, however Aurora ended up acquiring the Mexican distributor.
Aurora worked really hard on improving their production capacity, not only by building new facilities but also by buying out their competition.
The first thing to happen on this front was the licensing of Aurora Sky in January, which had its first harvest in July.
After that Aurora announced the 1.2 million sq.ft Aurora Sun facility in April, and received the sales license for the Aurora Vie facility.
Then, the Aurora Mountain facility received the Health Canada dealers license and Aurora got approval for its facility in Malta.
The company managed to ship clones to its Aurora Nordic facility in Denmark in August, and by doing so populated the whole facility with plants.
Later in 2018 Aurora received a production license for the Aurora Eau facility, and announced the opening of Aurora Eau, as well as a new indoor facility in Lachute, Quebec.
Aurora made a lot of management changes, but nothing too major.
First, the company appointed Cam Batley as the new Chief Corporate Officer in January, which turned out to be a great decision because Batley’s been praising Aurora in the media with every chance he got.
The company then appointed André Jérôme as Senior Vice President of Business Integration in February, however, he switched to the position interim CanniMed CEO in April.
In March, Aurora made a few changes and appointed the following:
- Dr. Shane Morris as Vice President Product Development and Regulatory Affairs
- Dr. Kelly Narine as Vice President of Research
In May, the company appointed Jonathan Zaid as a Director of Advocacy and Corporate Social Responsibility. Dr. Debra Wilson came on board as Chief Human Resources Officer in August.
Darren Karasiuk got appointed as the Executive Vice President of Adult Usage in September and the last appointment was Dr. Jonathan Page who came on board as the Chief Science Officer.