Aurora secures right to increase ownership to
40% of Choom at $2.75 per common
share
EDMONTON and VANCOUVER, Nov. 5,
2018 /PRNewswire/ - Aurora Cannabis Inc. ("Aurora")
(TSX: ACB) (OTCQB: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) and Choom
Holdings Inc. ("Choom") (CSE: CHOO; OTCQB: CHOOF) ( "Choom") an
emerging adult use cannabis company that has secured one of the
largest retail networks in Canada,
are pleased to announce that the companies have completed a
non-brokered private placement of a debenture (the
"Offering") in the principal amount of $20,000,000 in Choom by Aurora, convertible into
common shares of Choom ("Common Shares") at a conversion price of
$1.25 per Common Share, with a four
year maturity date. Aurora has also secured the right to acquire up
to 40% of the Company at $2.75 per
Common Share.
Choom is currently developing a network of retail stores which
will feature a curated selection of products from various licensed
producers with a strong focus on elevated customer experiences.
Choom has secured the rights to 45 retail opportunities across
Western Canada, rapidly expanding
its commercial presence in highly strategic locations. This
includes a total of 45 applications submitted, with 27 development
permits and 18 building permits received from the various
municipalities. In all cases the retail opportunities are subject
to the necessary provincial and municipal government approvals.
With the investment from Aurora, Choom intends to accelerate its
sophisticated retail channel expansion in the Canadian adult use
market, and is committed to establishing Choom as a dominant
national cannabis retail brand.
"Choom has developed a strong brand identity that radiates
throughout its developing network of retail stores, which is well
aligned with Aurora's overall adult usage strategy," said
Terry Booth, CEO of Aurora. "Through
this strategic investment, Aurora further diversifies its retail
strategy, with additional retail opportunities across Western Canada, and future potential
opportunities in the Ontario
market. We are pleased to increase our stake in Choom and support
them as they execute on introducing their unique retail brand to
Canadian cannabis consumers."
Chris Bogart, President & CEO
of Choom, added, "This is a transformational investment from
Aurora, one of the world's leading cannabis companies, that helps
accelerate our growth and expand our retail footprint to be one of
best positioned and largest retailers in the country. Aurora's
continued confidence and investment allows Choom to provide high
quality cannabis to a broader market of consumers across the entire
country and expedite our expansion and the roll out of store
openings."
The Offering is an unsecured convertible debenture (the
"Debenture") maturing in four years (the "Maturity
Date"), convertible into Common Shares: (i) at the option of
Aurora, any time prior to the Maturity Date at a conversion price
of $1.25 per Common Share, subject to
a minimum conversion amount of $5,000,000, and (ii) at the option of Choom any
time after the hold period has expired and the volume weighted
average trading price ("VWAP") of the Common Shares on the
Canadian Securities Exchange (the "Exchange") is
$3.00 or more for a period of 10
consecutive trading days.
The Debenture is non-transferrable and bears an annual interest
rate of 6.5% calculated semi-annually, payable annually in arrears
on the anniversary date. Aurora may elect to receive interest
payments in Common Shares in lieu of cash at a price per Common
Share equal to the VWAP of the Common Shares on the Exchange for
the 20 trading days ending prior to the date on which such interest
payment is due.
The proceeds will be used by Choom for working capital and
general corporate purposes.
In connection with the Offering, Choom also issued to Aurora,
for no additional consideration, 95,760,367 Common Share purchase
warrants at an exercise price of $2.75, subject to adjustments in accordance with
the terms thereof, to allow Aurora to increase its pro rata equity
interest in Choom to approximately 40% (the "Warrants"). The
Warrants are exercisable by Aurora at any time prior to
5:00 p.m. Vancouver time on November 02, 2020.
All securities issued in connection with the transaction will be
subject to a hold period expiring four months and one day after the
Offering's closing date.
None of the securities issued in connection with the Offering
will be registered under the United States Securities Act of 1933,
as amended (the "1933 Act"), and none of them may be offered
or sold in the United States
absent registration or an applicable exemption from the
registration requirements of the 1933 Act. This news release shall
not constitute an offer to sell or a solicitation of an offer to
buy nor shall there by any sale of the securities in any state
where such offer, solicitation, or sale would be unlawful.
About Aurora
Headquartered in Edmonton, Alberta,
Canada with funded capacity in excess of 500,000 kg per
annum and sales and operations in 19 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 low cost. Intended to be replicable and
scalable globally, our production facilities are designed to
produce cannabis of significant scale, with high quality,
industry-leading yields, and low per gram production costs. Each of
Aurora's facilities is built to meet EU GMP standards, and its
first production facility, the recently acquired MedReleaf Markham
facility, and its wholly owned European medical cannabis
distributor Aurora Deutschland, have achieved this level of
certification.
In addition to the Company's rapid organic growth and strong
execution on strategic M&A, which to date includes 15 wholly
owned subsidiary companies – MedReleaf, CanvasRX, Peloton
Pharmaceutical, Aurora Deutschland , H2 Biopharma, Urban
Cultivator, BC Northern Lights, Larssen Greenhouses, CanniMed
Therapeutics, Anandia Labs, HotHouse Consulting, MED Colombia,
Agropro, Borela, and the pending acquisition of ICC Labs – Aurora
is distinguished by its reputation as a partner and employer of
choice in the global cannabis sector, having invested in and
established strategic partnerships with a range of leading
innovators, including: Radient Technologies Inc. (TSXV: RTI),
Hempco Food and Fiber Inc. (TSXV: HEMP), Cann Group Ltd. (ASX:
CAN), Micron Waste Technologies Inc. (CSE: MWM), Choom Holdings
Inc. (CSE: CHOO), Capcium Inc. (private), Evio Beauty Group
(private), Wagner Dimas (private), CTT Pharmaceuticals (OTCC:
CTTH), and Alcanna Inc. (TSX: CLIQ).
Aurora's Common Shares trade on the TSX and NYSE under the
symbol "ACB", and are a constituent of the S&P/TSX Composite
Index.
About ChoomTM
Choom™ is an emerging adult use cannabis company that has
secured one of the largest retail networks in Canada. The Choom brand is inspired by
Hawaii's "Choom Gang"—a group of
buddies in Honolulu during the
1970's who loved to smoke cannabis—or as the locals call
it, "Choom". Evoking the spirit of the original
Choom Gang, our brand caters to the
Canadian adult use market with the ethos of cultivating 'Good Times
with Good Friends'. Choom™ is focused on delivering an elevated
customer experience through our curated retail environments,
offering a diversity of brands for Canadians across a national
retail network.
Aurora Cannabis
Inc.
|
|
|
|
|
|
|
Choom Holdings
Inc.
|
Terry Booth,
CEO
|
|
|
|
|
|
|
Chris Bogart,
President & CEO
|
Forward-looking
Information:
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
information") within the meaning of applicable securities laws.
Forward-looking information relates to management's future outlook
and anticipated events or results, and include statements or
information regarding the future plans or prospects of the Company.
Forward-looking information in this news release includes
statements about: Aurora acquiring up to 40% of the Company;
developing a network of retail stores which will feature a curated
selection of products from various licensed producers; accelerating
Choom's sophisticated retail channel expansion in the Canadian
adult use market; establishing Choom as a dominant national
cannabis retail brand; becoming one of best positioned and largest
retailers in the country; Aurora's continued confidence and
investment in Choom; providing high quality cannabis to a broader
market of consumers across the entire country; expediting expansion
and the roll out of store openings; future potential opportunities
in the Ontario market; and using
the proceeds of the Offering for working capital and general
corporate purposes.
With respect to the forward-looking information contained in
this news release, Aurora and Choom have made numerous assumptions
regarding, among other things: receipt of all necessary regulatory
approvals for the Offering; necessary provincial and municipal
government approvals; continued investment from Aurora; continued
demand for Choom's products; and continued economic and market
stability. While the companies consider these assumptions to be
reasonable, these assumptions are inherently subject to significant
business, economic, competitive, market and social uncertainties
and contingencies.
Although management of the companies have attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward looking
information, there may be other factors that cause results not to
be as anticipated, estimated or intended. These factors include:
Aurora may not continue to invest in Choom; Choom's retail network
may not expand at the anticipated speed or scope, or at all; Choom
may not use the proceeds received from the Offering as currently
contemplated; risks and uncertainties associated with the results
of diligence investigations; developments in the cannabis sector;
delays resulting from or inability to obtain required regulatory
approvals; ability to access sufficient capital from internal and
external sources; reliance on key personnel; regulatory risks; and
delays and other risks and uncertainties discussed in the
management discussion and analysis section of the companies'
interim and most recent annual financial statements or other
reports and filings, including the companies' Listing Statement and
other documents, made with the applicable Canadian securities
regulators and filed on SEDAR at
www.sedar.com.
There can be no assurance that such forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking information. All forward-looking information herein
is qualified in its entirety by this cautionary statement, and the
companies disclaim any obligation to revise or update any such
forward-looking information or to publicly announce the result of
any revisions to any of the forward-looking information contained
herein to reflect future results, events or developments, except as
required by law.
Neither TSX or the CSE, nor their Regulation Services Provider
(as that term is defined in the policies of Toronto Stock Exchange
and the CSE) accept responsibility for the adequacy or accuracy of
this release.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/aurora-cannabis-increases-cornerstone-investment-in-cannabis-retailer-choom-with-additional-20-000-000--300743741.html
SOURCE Aurora Cannabis Inc.