Canadian cannabis company Aurora Cannabis Inc ACB announced Monday that its acquisition of Hempco Food and Fiber Inc. has closed at a valuation of around CA$63.4 million ($47.4 million).
What Happened
Aurora announced in April that it would acquire the remaining interest in the provider of hemp-based foods, hemp fiber and hemp nutraceuticals. The acquired business will become a fully owned subsidiary of Aurora and its stock will be delisted from the TSX Venture Exchange.
Aurora first invested in Hempco in 2017 to gain early exposure to the hemp-derived CBD market. Since then the company has made other investments and acquisitions in the hemp-based space.
Under Aurora's umbrella, Hempco will provide low-cost, high-volume raw hemp material for the extraction of mostly CBD and other cannabinoids, the company said.
Aurora said it now boasts expertise across expertise across genetics, extraction, product development, brands and distribution through its Aurora Hemp unit.
As part of the acquisition, Hempco investors will receive $1.04 per Hempco share, which will be payable in common shares of Aurora at a value of $12.01 per Aurora share.
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Why It's Important
"Through the addition of Hempco, we have assembled a world-class portfolio of high-quality hemp assets that together form the basis of a strong new operating division that will develop CBD-from-hemp around the world," Aurora CEO Terry Booth said in a statement.
"Aurora Hemp brings together the cultivars, strategic partners, brands and distribution networks to service medical, consumer and wellness markets."
What's Next
Aurora's acquisition further advances its plan to enter the U.S. hemp food and hemp-derived CBD markets, Booth said.
Aurora shares were down 2% at $5.87 at the time of publication Monday.
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