Aphria Signs Wholesale Supply Agreement With Emblem Cannabis Corporation

Published: September 12, 2018

Aphria Signs Wholesale Supply Agreement With Emblem Cannabis Corporation

Aphria Inc. has entered into a wholesale supply agreement with Emblem Cannabis Corp., wholly owned subsidiary of Emblem Corp. and a licensed producer of medical cannabis under the Access to Cannabis for Medical Purposes Regulations  to supply 175,000 kg of high-quality cannabis over a five-year period starting May 2019 with a total of 25,000 kg deliverable for the balance of the first year. Under the terms of the Agreement, Aphria will receive a non-refundable deposit of $22.8 million, which is comprised of $12.8 million in cash, and 6,952,169 of common shares of Emblem. The Emblem common shares issued to Aphria are subject to a contractual lock-up and standstill arrangement, with five equal releases over the term of the Agreement, subject to certain customary exceptions.

Year

Total Quantity
(kg; in dried flower equivalent)

May 1st, 2019 – April 30th, 2020

25,000

May 1st, 2020 – April 30th, 2021

30,000

May 1st, 2021 – April 30th, 2022

35,000

May 1st, 2022 – April 30th, 2023

40,000

May 1st, 2023 – April 30th, 2024

45,000

“Aphria’s total annualized production capabilities are about to reach 255,000kg in early 2019, which means we are not only well positioned to meet all of our supply commitments across Canada and anticipated international demand, but also have the capacity to support the projected demand through our partners,” said Gregg Battersby, Vice President of Commercial Strategy at Aphria. “We are pleased to be able to support Emblem with a supply of high-quality cannabis grown in our Leamington greenhouses, while securing healthy revenue and margins for Aphria over the next five years.”

Over the term of the Agreement, Aphria will provide Emblem with a supply of high-quality dried flower and cannabis extract expertly grown in the Company’s greenhouse facilities in Leamington, Ontario.

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