Canadian medical cannabis producer Aurora Cannabis has acquired indoor gardening companies BC Northern Lights and Urban Cultivator Inc. The companies are expected to generate a combined $5 million in revenues this fiscal year, which ends Oct. 31.
The firms produce and sell high-yield, indoor appliances for microgreen, vegetable, herb, and cannabis cultivation for homes. BC Northern Lights has been operating for 17 years while Urban Cultivator has been in businesses for seven years.
Neil Belot, Aurora chief global business development officer, called the transactions “an important step in Aurora’s strategy to serve the home gardening market in Canada” for patients and eventually adult consumers who wish to grow their own cannabis.
According to Health Canada, as of Aug 21, 10,547 Canadians were registered to grow their own cannabis, or as designated growers, as part of the nation’s federal medical cannabis program.
Aurora CEO Terry Booth said the acquisitions “add an excellent range of proprietary products” to the company’s portfolio and position the licensed producer “extremely well to capitalize on the opportunity in a distinct and rapidly-growing” market segment.
“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,” he said in a press release. “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.”
The deal, which will see Aurora acquire 100 percent of the companies, is worth $3.85 million in cash, $500,000 in Aurora common shares, and future consideration up to $4 million based on earnings before interest, tax, depreciation, and amortization.
Get daily cannabis business news updates. Subscribe
End
