Cannabis News: Aurora Makes 2 New Acquisitions

Aurora Cannabis Inc. (TSX:ACB) (OTC:ACBFF) (FRA:21P)  announced that the company has completed the acquisition of 100% of both BC Northern Lights Enterprises Ltd. and Urban Cultivator Inc., leading companies, respectively, in the production and sale of proprietary systems for the safe, efficient and high-yield indoor cultivation of marijuana, and in state-of-the-art indoor gardening appliances for the cultivation of organic micro-greens, vegetables and herbs in home kitchens. These buyouts are important cannabis news, showcasing a growing company flexing its muscles. 

The asking price of BCNL and Urban Cultivator is $3.85 million payable in cash on closing, subject to customary working capital adjustments, $500,000 of Aurora common shares and share purchase warrants issued on closing, and up to a further $4 million of future consideration based on the achievement of certain pre-established EBITDA performance milestones related to BCNL and Urban Cultivator operations.

BCNL and Urban Cultivator, which have been operating for 16 years and 7 years, respectively, are each growing rapidly and, combined, are tracking to generate more than $5 million in revenues in the current fiscal year, ending Oct. 31.

“These transactions are an important step in Aurora’s strategy to serve the home gardening market in Canada for patients who choose to grow their own medical cannabis, and ultimately for adult consumers who choose to grow their own after Canada’s federal government legalizes adult usage, which is anticipated by July, 2018,” said Neil Belot, CBDO.

“For over a decade, BC Northern Lights products have been widely recognized as the gold standard for home cannabis production, and we look forward to integrating our offerings to deliver a truly unique and full service customer experience.”

As of Aug. 21, 10,547 Canadians were registered to grow either their own cannabis or as designated growers for others, according to Health Canada. The number of home cannabis cultivators is expected to grow as a result of continued processing of applications. Further expansion is anticipated following legalization of cannabis for adult use, with a proposed limit of four plants per household. While the ultimate number of home growers is anticipated to be limited relative to the overall size of the market, this cannabis news represents very significant upside potential for BCNL to grow its customer base and market share.

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“These acquisitions add an excellent range of proprietary products to our expanding portfolio of customer offerings that meet the Aurora Standard, and position us extremely well to capitalize on the opportunity in a distinct and rapidly-growing segment of the market,” said Terry Booth, CEO.

“We have always advocated for people’s ability to make their own choices and are very supportive of the Supreme Court’s Allard decision, which confirmed patients’ rights to grow their own medical cannabis. Similarly, we believe that, after implementation of consumer legalization in Canada, individuals who choose to grow their own cannabis should have access to cultivation solutions that are in controlled environments, safe, and can produce high-yielding, high quality cannabis.”

Mr. Booth added, “BCNL indoor grow systems produce consistent, predictable, and repeatable yields, while at the same time reducing the labour intensity normally associated with home growing.  We believe the systems’ CSA-approved design, safety features, and odorless operation will generate strong resonance with our target markets, and securely address potential concerns among municipal governments. We are very pleased that both co-founders, Tarren and Linnea Wolfe, have agreed to stay on with Aurora and help drive our expansion strategy in the home grow market.”

“We are delighted to now be part of the Aurora family,” said Tarren Wolfe, co-founder of BCNL and Urban Cultivator.

“This will enable us to address a much larger audience of people who have been empowered by the Allard decision to operate a home garden, and are seeking access to the equipment, genetics, and educational support services to do so. In teaming up with Aurora, we will work with an industry-leading team of cannabis branding specialists and sales and marketing professionals to bring BCNL to the next level. In addition, Aurora’s Licensed Producer status means the Company will soon be able to provide a fully integrated package, including starter materials such as clones, offering one-stop shopping for people who choose to grow their own cannabis at home.”

Clearly, Canada’s Allard ruling has been a game-changing piece of cannabis news, and firms like Aurora are taking full advantage of the new market opportunities opening up.

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