While Aurora already has a significant stake in the company from an earlier investment back in 2017 but has decided today to fully acquire the Canadian hemp company, securing access to a large supply of low-cost, high-quality raw hemp.
As a leader in the production of hemp-based foods and nutraceuticals for both people and animals, the decision to acquire Hempco makes sense for Aurora which – like most major cannabis companies – is looking to prepare for the upcoming legalization of CBD-infused edibles in Canada later this year. Hempco is also in the process of producing a 56,000 square foot facility which would add 2.9 million kilograms annually of hemp production to its name.
“This transaction will enable us to fully integrate Hempco and its new Nisku processing facility into Aurora’s global hemp operations including Agropro, Borela and ICC. Our goal is to strengthen our CBD-from-hemp supply chain as well as our hemp business of hemp-based superfoods, nutraceuticals and fibers,” said Terry Booth, Aurora CEO. “With vertical integration, product innovation expertise, and global reach, we are well positioned to extend our market share in these potential multibillion-dollar industries. We look forward to executing wit the Hempco team on our global hemp and CBD strategy, and we invite the Hempco shareholders to join us on this exciting journey.”
From a strategic perspective, Hempco would be able to provide Aurora with low-cost, high-volume raw hemp for CBD extraction. Overall, the global CBD wellness market is estimated to reach $22 billion by 2021, while the industrial hemp market – which caters to textile, agriculture, and nutraceutical/agri-food industries – is anticipated to reach $10.6 billion by 2025.
“The assets, capabilities, networks and resources that Aurora can mobilize to drive and accelerate growth once Hempco is fully integrated will, we believe, result in significant long-term value for Hempco shareholders, and consequently our board recommends this transaction be approved at our upcoming special meeting,” added Hempco Chairman Joel Watson.
In response to today’s news, shares of Aurora Cannabis increased around four percent in today’s trading session. The company stock price came close to matching its six-month high back in mid-October 2018 recently, edging out at C$13.26 per share before returning some of those gains. Over the past month, share prices have been steadily tumbling downwards, currently sitting at C$11.82 per share on the TSX.
Aurora Cannabis Company Profile
Aurora Cannabis Inc is a Canada-based company engaged in the production and distribution of medical cannabis. The Company 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, home cultivation, wholesale and retail distribution.
The Company’s purpose-built facilities which integrate technologies across all processes are defined by automation and customization. The Company has a funded capacity of more than 500,000 kilograms per year as well as sales and operations in 24 countries worldwide. – Warrior Trading News