Creating a Global Industry Leader Positioned for Long-Term, Accelerated Growth
EDMONTON, July 25, 2018 /CNW/ - Aurora Cannabis Inc. ("Aurora") (TSX: ACB) (OTCQB: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) and MedReleaf Corp. ("MedReleaf") (TSX: LEAF) today announced the closing of the previously announced arrangement agreement (the "Arrangement Agreement"). Under the terms of the Arrangement Agreement, holders of MedReleaf common shares received 3.575 common shares of Aurora for each MedReleaf common share held (the "Exchange Ratio").
Upon closing of the transaction, Aurora will submit applications with the Toronto Stock Exchange (the "TSX") and the Ontario Securities Commission (the "OSC") to delist MedReleaf's existing common shares and for MedReleaf to cease to be a reporting issuer, respectively.
"The closing of this transaction brings together two vertically integrated, successful pioneers in the cannabis industry, creating a company with more than 1,200 employees and a rapidly growing domestic and international footprint," said Terry Booth, CEO of Aurora. "The combination of MedReleaf and Aurora creates a well capitalized company positioned exceptionally well to generate further shareholder value, driven by the low-cost production of high-quality cannabis products. We will be applying our proven integration methodology, and will continue to execute to the Aurora Standard in capitalizing on the significant opportunities in the domestic and global cannabis industry."
Mr. Booth added "Each of the strategic transactions Aurora has concluded have further advanced our envisioned business strategy of establishing a powerful, integrated and strongly differentiated cannabis company – positioned for continued rapid growth, and built to last. Our large-scale, high technology production facilities, strong science, R&D and product development capabilities, diversified product portfolio, and growing domestic and international distribution networks provide Aurora with significant competitive advantages in both the Canadian and global cannabis markets."
Scale & Efficiency
Completion of the transaction creates a unified cannabis industry leader with a combined funded capacity of more than 570,000 kg of high-quality cannabis per year, to be delivered via nine facilities in Canada and two in Europe. Combining MedReleaf's industry-leading cultivation yields and Aurora's ultra low-cost Sky Class production facilities, which management believes will result in production costs well below $1 per gram, position the Company to deliver high-margin growth in all domestic and international market segments.
With the addition of MedReleaf's three Ontario-based facilities and a combined Ontario workforce of more than 400 people, the transaction now makes Aurora one of the largest cannabis companies in Ontario, the country's largest by population.
Science and R&D
Aurora and MedReleaf share a strong belief in the importance of science to drive innovations in the form of marketable IP and new value-added products, with the objective of creating a differentiated and broadly diversified high-margin operator. The combined science and R&D teams, including approximately 40 PhDs and MScs will be active in research projects throughout the global cannabis industry.
Both companies maintain a strong commitment to clinical trials and medical studies, which has led to increased visibility and brand recognition with the domestic and international medical communities, leading to above-average prescription rates and referrals. In addition to studies completed and in progress at Aurora and CanniMed, MedReleaf's completed and in-progress initiatives include a Pharmacokinetics trial, a Phase II cancer pain trial, a Phase III epilepsy trial, an observational chronic pain study, and a study to assess the potential correlation between genetic signatures and cannabis efficacy.
Furthermore, each company has developed considerable expertise in cannabis plant genetics, enabling the development of new cultivars with specific traits for a variety of domestic and international markets, as well as strains optimized for automated cultivation.
In addition to in-house efforts, ongoing innovation will continue to be driven through the identification and integration of high-potential, third-party technologies. Aurora's strong execution record in this regard is based on the close collaboration between its R&D and opportunities teams. This function will be further strengthened through the integration of MedReleaf's business development efforts, adding a robust pipeline of promising opportunities.
With MedReleaf's Markham facility, the Company now has two GMP certified facilities, increasing product availability for higher-margin international markets featuring strong barriers to entry, such as Germany and Italy. Leveraging the distribution and operational capabilities of Aurora's wholly owned EU subsidiary Pedanios, as well as that of other distribution partners secured by both companies, the Company is actively targeting market entry into multiple new EU and other international jurisdictions.
In support of the upcoming legalization of the Canadian adult consumer use market, Aurora and MedReleaf have launched a portfolio of premium consumer and wellness brands. These brands, which include San Rafael '71, Woodstock, and AltaVie were developed based on detailed consumer and marketplace insights and advanced analytical frameworks. The combined entity has multiple provincial-level supply agreements in place, and is actively pursuing further agreements.
The combined companies' are positioned well for growth through an expansive network of non-governmental distribution partners, such as Shoppers Drug Market, Pharmasave and Pharmachoice. Furthermore, through investees such as Alcanna and Choom Holdings, the Company anticipates further expanding its domestic market reach.
Management and Board Changes
Following today's closing of the Arrangement Agreement, Neil Closner has stepped down as CEO of MedReleaf and during the integration process, Allan Cleiren, Aurora's Chief Operating Officer, will assume the role of interim-CEO of MedReleaf. In addition, Lloyd Segal, Deborah Rosati and Neil Closner have stepped down from MedReleaf's Board, while Norma Beauchamp and Ronald Funk have been appointed to Aurora's Board of Directors. Steve Dobler, President of Aurora, has been appointed to MedReleaf's Board of Directors.
Mr. Booth added, "On behalf of Aurora and MedReleaf, I'd like to thank Neil and MedReleaf's Board for their incredible hard work, dedication and support for this transaction. Under their guidance, MedReleaf has matured into a world-class medical grade cannabis organization."
Headquartered in Edmonton, Alberta, with funded capacity in excess of 570,000 kg per year and sales and operations in 14 countries across five continents, Aurora is one of the world's largest and leading cannabis companies. Aurora is vertically integrated and horizontally diversified across every key segment of the value chain, from facility engineering and design to cannabis breeding and genetics research, cannabis and hemp production, derivatives, high value-add product development, home cultivation, wholesale and retail distribution.
Highly differentiated from its peers, Aurora has established a uniquely advanced, consistent and efficient production strategy, based on purpose-built facilities that integrate leading-edge technologies across all processes, defined by extensive automation and customization, resulting in the massive scale production of high quality product at ultra-low costs. Intended to be replicable and scalable globally, these production facilities are designed to produce cannabis of significant scale, with high quality, industry-leading yields, and low cost per gram production. Each of Aurora's facilities is built to meet European Union (EU) GMP standards.
In addition to the Company's rapid organic growth and strong execution on strategic M&A, which to date includes 10 companies acquired - CanvasRX, Peloton Pharmaceutical, Pedanios, H2 Biopharma, Urban Cultivator, BC Northern Lights, Larssen, CanniMed Therapeutics, Anandia Labs and MedReleaf - Aurora is distinguished by its reputation as a partner of choice and employer of choice in the global cannabis sector, having invested in and established strategic partnerships with a range of leading innovators, including: The Green Organic Dutchman Holdings Ltd. (TSX: TGOD), Radient Technologies Inc. (TSXV: RTI), Hempco Food and Fiber Inc. (TSXV: HEMP), Cann Group Ltd. (ASX: CAN), Micron Waste Technologies Inc. (CSE: MWM),
Canada's most awarded licensed producer, MedReleaf is an R&D-driven company dedicated to innovation, operational excellence and the production of industry leading, top-quality cannabis. Sourced from around the world and carefully cultivated in one of two state-of-the-art ICH-GMP and ISO 9001 certified facilities in Ontario, with a third facility currently in development, a full range of premium MedReleaf products are delivered to the global medical market. We serve the therapeutic needs of patients seeking safe, consistent and effective medical cannabis and provide a compelling product offering for the adult-use recreational market.
For more information on MedReleaf, its products, research and how the company is helping patients #livefree, please visit MedReleaf.com or follow @medreleaf.
AURORA CANNABIS INC.
Forward Looking Statements
This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities law ("forward-looking statements"). Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements in this news release include, but are not limited to, statements with respect to the anticipated benefits associated with the transaction, including the anticipated reduced cost of production. Forward looking statements are based on certain assumptions regarding Aurora and MedReleaf, including expected growth, results of operations, performance, industry trends and growth opportunities, synergies expected to result from the transaction, and that the Government of Canada proceeds with legalization as previously announced. While Aurora considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. The forward looking statements are subject to a number of known and unknown risks, including: risks associated with general economic conditions; adverse industry events; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally, income tax and regulatory matters; the ability of Aurora to implement its business strategies; competition; currency and interest rate fluctuations and other risks. Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. Aurora disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Factors that could cause anticipated opportunities and actual results to differ materially include, but are not limited to, matters referred to above and elsewhere in Aurora's or MedReleaf's public filings, including the management information circulars and the material change reports have been in respect of the Transaction, which are, or will be, available on SEDAR. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
Neither TSX nor its Regulation Services Provider (as that term is defined in the policies of Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Aurora Cannabis Inc.
For further information: For Aurora: Investors: Marc Lakmaaker, +1.647.269.5523, [email protected], www.auroramj.com; Rob Kelly, +1.647.331.7228, [email protected], www.auroramj.com; Media: Heather MacGregor, +1.416.509.5416, [email protected], www.auroramj.com; U.S. Investors: Phil Carlson / Elizabeth Barker, KCSA Strategic Communications, Phone: (212) 896-1233 / (212) 896-1203, Email: [email protected] / [email protected]; For MedReleaf: Darren Karasiuk, SVP & GM, Recreational, [email protected], +1.855.473.5323; Dennis Fong, LodeRock Advisors, Investor Relations, [email protected], +1.416.283.9930