Aurora Cannabis Inc. (ACBFF) Enters into Global Softgel Business with Capcium Inc.

Aurora Cannabis Inc. (“Aurora” or the “Company”) (ACB.TO) (ACBFF) ( Frankfurt : 21P; WKN: A1C4WM) and Capcium Inc. (“Capcium“) announced today that the companies have signed a strategic agreement to produce high quality cannabis-based softgels for patients.  Additionally, Aurora has acquired a 19.99% ownership interest in Capcium by way of a non-brokered private placement for consideration of $10 million .

Capcium, a privately-owned Montreal -based global leader in softgel manufacturing, has emerged as one of the leading manufacturers in the cannabis industry. Production of high-precision dosage controlled softgels is an extensive and complex process. Capcium, through its pharmaceutical and encapsulation experience, has developed expertise that is ready to be applied to the cannabis industry and deliver high-volume production capacity.

Capcium intends to use the proceeds from the Aurora investment to expand its cutting-edge cannabis softgel manufacturing business, which includes the construction and operation of a large, state-of-the-art facility, to be completed in Q4, 2019.

In advance of this new Capcium facility, and to accelerate time to market, Capcium and Aurora have agreed to immediately establish a high-volume, state-of-the-art softgel manufacturing operation at Aurora Vie, the Company’s cannabis production facility in Pointe-Claire , Québec. Softgel sales from this facility are anticipated to commence (subject to Health Canada approval) by the end of Summer 2018. Capcium will be the exclusive manufacturer of Aurora’s North American cannabis softgel products. The agreement also contemplates Capcium being the company’s preferred global manufacturer of softgel cannabis products.

Management Commentary

“This investment in Capcium reflects our strategic objective to further expand our differentiated, higher-margin product offerings,” said Terry Booth , CEO of Aurora. “Capcium’s extensive know-how has enabled it to develop an advanced technology for the high-volume production of cannabis-based softgels. This provides us with a strong competitive advantage, positioning us well to build a leading position in the production and sale of value-added cannabis products globally. We are proud that Aurora quickly is becoming the partner of choice in the cannabis industry, and we look forward to capitalizing with Capcium on the significant opportunity that softgels represent.”

Sylvain Duvernay , CEO of Capcium, added, “Teaming up with what we believe to be the most innovative Licensed Producer with excellent international distribution channels, greatly enhances our growth prospects. We are delighted that Aurora and Capcium will become long-term partners, and look forward to bringing Québec made softgel cannabis products to Canada and to the global markets.”

Aurora and Capcium believe the benefits of the transaction are significant for all shareholders. Aurora’s brand leadership, quality products, customer care, innovation and deep product knowledge will be a strong complement to Capcium’s well-established softgel manufacturing expertise. This deal will establish Québec as a world leader for cannabis value added products by leveraging the experience and expertise of two innovative companies with Québec operations, while creating highly-skilled Québec-based employment in the rapidly expanding cannabis sector.

Terms of the Investment

Aurora has made an initial $10 million investment in Capcium by way of a non-brokered private placement. The consideration paid by Aurora consists of $500,000 in cash and $9.5 in million common shares of Aurora at a five-day volume weighted average trading price of Aurora’s Common Shares on the Toronto Stock Exchange (the “TSX”) for the period ended June 6, 2018. Upon completion of the investment, Aurora will own approximately 19.99% of the issued and outstanding common shares of Capcium.

The private placement is subject to the final approval of the TSX, and is not subject to any financing or due diligence conditions.

About Aurora

Aurora’s wholly-owned subsidiary, Aurora Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta , known as “Aurora Mountain”, and a second 40,000 square foot high-technology production facility known as “Aurora Vie” in Pointe-Claire, Quebec on Montreal’s West Island. In January 2018 , Aurora’s 800,000 square foot flagship cultivation facility, Aurora Sky, located at the Edmonton International Airport, was licensed. Once at full capacity, Aurora Sky is expected to produce over 100,000 kg per annum of cannabis. Aurora is completing a facility in Lachute, Quebec utilizing its wholly owned subsidiary Aurora Larssen Projects Inc.