Aurora to Make Strategic Investment in Hempco

Agreement Includes Option to Acquire up to 50.1% of Hempco on Fully Diluted Basis


VANCOUVER and BURNABY, BC, June 8, 2017 /CNW/ - Aurora Cannabis Inc. (the "Company" or "Aurora") (TSXV: ACB) (OTCQX: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) and Hempco Food and Fiber Inc. ("Hempco") (TSX-V: HEMP) are pleased to announce that Aurora will be making a strategic investment in Hempco for an ownership stake of up to 19.9% on a fully diluted basis, subject to Regulatory and Board approvals, as well as satisfactory completion of due diligence.  Additionally, subject to customary conditions, Aurora will obtain an option to acquire shares from the majority owners of Hempco that, upon exercise of the option, will bring Aurora's total ownership interest in Hempco to 50.1% on a fully diluted basis.

Hempco is one of the world's largest industrial producers of hemp and hemp products, and currently offers three primary product lines: (1) bulk and packaged food products (e.g. hemp protein powder, hemp seeds or hearts, hemp oil etc.); (2) hemp fibre; and (3) nutraceuticals. Hempco's line of packaged foods are sold under the brand "Planet Hemp" and are distributed globally in seven countries.

The target market for these products includes, but is not limited to, health conscious consumers, including vegetarians seeking to supplement protein and reduce or eliminate animal product intake, as well as an increasing number of consumers focused on managing and preventing a variety of health issues through a healthy diet, known as "LOHAS", Lifestyles of Health and Sustainability, and "millenials" looking for clean and "green" products.

Hempco, a rapidly growing company

For the six month period ending February 28, 2017, Hempco recorded revenues of approximately $4.5 million, a 136% increase over the comparable period in the prior year.

In order to meet growing global demand for its hemp-based products, Hempco currently is completing the construction of a facility in Leduc County, less than 5 km from the Aurora Sky production facility now under construction at Edmonton International Airport. Upon completion, Hempco's new facility will double its current capacity to a total of approximately 225,000 kg per month of hulled hemp seed. Additionally, the Alberta facility is easily scalable and can be expanded to approximately 600,000 kg per month.

Strategic rationale

Industrial hemp grown under contract to Hempco contains efficient extractable quantities of cannabidiol, (CBD) a compound shown through a growing body of anecdotal and scientific evidence to have considerable medical benefits in symptom management.

Aurora anticipates, based on recommendation by the Federal Task Force on Cannabis Legalization, that the regulations preventing industrial hemp producers from harvesting leaves, flowers and buds, which contain CBDs will be revised to allow for the processing of CBDs. Cannabidiol does not have any intoxicating effects such as those caused by tetrahydrocannabinol (THC).

The market for CBDs in the form of capsules, oils, and topicals is expected to show significant growth, and Aurora considers the proposed transaction with Hempco to be a strategic initiative to enable market share dominance in this attractive segment.

Through its relationship with Radient Technologies Inc, (TSXV: RTI), the Company has access to an efficient, cost-effective, high-throughput methodology of producing CBD-based products at large scale, thus providing the Company with a considerable competitive advantage in addressing this growing market when CBD extraction from hemp is allowed.

Additionally, the FFNHP (Functional Foods and Natural Health Products) is a rapidly developing segment of the nutritional industry, with global demand for these products growing at a substantially higher rate than the traditional processed food market. Hempco's strong position within the hemp based nutrition space makes the company an attractive synergistic partner, irrespective of potential changes in legislation that would allow the harvest of CBD containing plant materials.

Management commentary

"Hempco is a rapidly expanding company with a strong and broadly diversified product offering, across a variety of health-related markets," said Terry Booth, CEO. "Leveraging our relationship with extraction leaders, the potential to develop a high-volume, low-cost source for CBD-based products creates significant upside potential, making this transaction particularly attractive.  The proposed transaction would further strengthen the foundation on which we are building our high-margin concentrates business, as well as bring further diversification to our expanding product offering."

Charles Holmes, CEO of Hempco, added, "The transaction with Aurora provides us with the resources to accelerate our commercial development.  Additionally, it provides us with a very highly visible partner, whose strong brand recognition we can leverage to grow our market share.  The strategic location of both our new facilities by the Edmonton International Airport, and within close proximity of world class extraction processing facilities, provides further important logistical advantages as we expand our international reach.  Hempco is delighted to be working with the world class Aurora team who share our vision and intentions to play a leading role in shaping the future of the global hemp industry."

The Investment

Aurora's investment in Hempco, subject to aforementioned conditions, will take place in two stages. 

  1. Aurora will loan Hempco $750,000 at an 8% interest rate. The loan is repayable upon the earliest of: June 8, 2019, a demand by Aurora for repayment, such demand which can only be made on or after December 21, 2017, or the completion of all or any portion of Hempco's non brokered private placement of units, as announced by Hempco on June 7, 2017, and:
  2. Upon satisfactory completion of due diligence by Aurora as well as the satisfaction of a number of other conditions, Aurora as the sole investor, will participate in a private placement with Hempco to acquire a total of 10,558,676 units, priced at $0.3075 per unit, for total gross proceeds of $3.2 million. Upon completion of the private placement, Aurora shall hold 19.9% of the share capital in Hempco on a fully diluted basis.  Each unit shall consist of one share and one full warrant.  Each warrant gives Aurora the right to purchase, for a period of two years following the closing date, one common share of Hempco for a price of $0.41.

Additionally, as one of Aurora's conditions to participate in Hempco's private placement, Aurora will obtain a call option, agreed upon with the two majority owners of Hempco to purchase additional shares of Hempco from the majority owners, such that upon exercising the call option, Aurora will own 50.1% of the shares of Hempco.

About Aurora

Aurora's wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada's Access to Cannabis for Medical Purposes Regulations ("ACMPR"). The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, and is currently constructing a second 800,000 square foot production facility, known as "Aurora Sky", at the Edmonton International Airport, and has acquired, and is undertaking completion of, a third 40,000 square foot production facility in Pointe-Claire, Quebec, on Montreal's West Island. Aurora also recently acquired Pedanios GmbH, a leading wholesale importer, exporter, and distributor of medical cannabis in the European Union ("EU"), based in Berlin, Germany. In addition, the company is the cornerstone investor with a 19.9% stake in Cann Group Limited, the only Australian company licensed to conduct research on and cultivate medical cannabis, Aurora's common shares trade on the TSX-V under the symbol "ACB". Visit for more information.

About Hempco

For more than 15 years Hempco has been a trusted and respected pioneer, innovator and provider of premier hemp seed foods. Hempco is committed to developing hemp foods, hemp fiber and hemp nutraceuticals, a "tri-crop" opportunity for producers and processors. Hempco has grown its business significantly and is generating value and profits for shareholders.

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. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Companies are 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.

The TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

On behalf of the Board of Directors,                                      
AURORA CANNABIS INC.                                                   
Terry Booth, CEO

SOURCE Aurora Cannabis Inc.

For further information: Aurora Cannabis Inc.: Cam Battley, Executive Vice President, +1.905.864.5525,; Marc Lakmaaker, NATIONAL Equicom, +1 416 848 1397,; Hempco Food and Fiber Inc.: Don Mosher, Business Development Executive, +1 604-685-6465,,

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