AURORA’S purchase of fellow Canadian cannabis grower Hempco is further evidence of its ambition in the CBD and industrial hemp markets.
Edmonton-based Aurora will pay C$63.4 million for the 48% of Hempco it doesn’t own – in 2017 it had taken a controlling 52% stake from brother and sister founders Charles and Angela Holmes.In a market statement Aurora said the deal will deliver additional low-cost, high-volume CBD and add further capacity, brands and distribution channels. It says the deal will allow it to capitalize on the growing global CBD wellness market, which is anticipated to grow to $22 billion USD by 2022.
The deal will see Aurora secure Hempco’s new, state-of-the-art, 56,000 square foot, 2.9 million kg per year hemp processing facility at Nisku, Alberta. Vancouver-based Hempco uses its hemp fiber for industrial products, the seeds are sold as a super food and the CBD comes from its flowers and buds.
Aurora Expanding Global Reach Through Hempco
Hemp is expected to be bigger than recreational cannabis in the coming years
The industrial hemp market is expected to reach $10.6 billion USD by 2025 as its potential in sustainable textiles, agriculture, and nutraceutical industries is realized, said Aurora in its market statement.
Terry Booth, CEO of Aurora, said: “Our goal is to strengthen our CBD-from-hemp supply chain as well as our hemp business of hemp-based superfoods, nutraceuticals and fibers. We look forward to executing with the Hempco team on our global hemp and CBD strategy, and we invite the Hempco shareholders to join us on this exciting journey.”
Joel Watson, Chairman of Hempco, added: “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.”
Hemp to be Bigger Than Recreational Cannabis?
Headquartered in Edmonton, Alberta, Canada, Aurora is one of the world’s largest cannabis companies. It currently produces over 625,000 kg of cannabis a year with sales and operations in 24 countries across five continents.In 2018, Aurora demonstrated its interest in hemp and CBD with the purchase of Canadian beauty products business Evio Beauty and it launched its first hemp-infused skin care products earlier this month.
Mr Booth says the hemp market will ‘ultimately be larger than the adult-use recreational marijuana market’, reports the MSN news website. Aurora has agreed to pay C$1.04 per Hempco share, payable in Aurora Shares at a deemed value of C$12.01 per Aurora share. Its share price responded positively to the news rising 4.5% shortly after the April 17 announcement from C$11.40.
