Aurora Cannabis Inc., the Canada based leading global medical cannabis company, is pleased to announce that a wholly-owned subsidiary of the Company has acquired the remaining approximately 90% equity interest of Indica Industries Pty Ltd (“MedReleaf Australia”) that Aurora did not previously own, at an enterprise value of AUD$50 million, subject to customary adjustments (the “Transaction”). Aurora paid AUD$9.45 million in cash with the balance of the purchase price satisfied by the issuance of common shares of Aurora.
MedReleaf Australia is a leading distributor of medical cannabis products and holds the #2 position in the Australian medical cannabis market. This market is currently estimated to be worth approximately AUD$400 million1 and has quickly become one of the largest nationally legal global medical cannabis markets outside of Canada.
The medical cannabis market in Australia is characterized by a clinician-led traditional pharma-like product distribution model that aligns with Aurora’s operational success in other key global medical cannabis markets such as Germany. Since first partnering with MedReleaf Australia in 2017, Aurora has actively contributed to the region’s recent growth, leveraging the Company’s pharmaceutical grade cultivation and global approach to product innovation. The Transaction is expected to provide a meaningful platform for Aurora to continue growing its leading global medical cannabis position in Australia and other APAC countries.
1 The Pennington Institute, “Cannabis in Australia 2023.” (Estimated revenue of AUD$210m for January to June 2023 has been annualized)
“The acquisition of MedReleaf Australia represents a strategic milestone in Aurora’s global cannabis leadership, demonstrating our commitment to investing in markets that offer opportunities for sustainable and profitable growth, said Miguel Martin, Chief Executive Officer of Aurora. “We are excited to solidify our position in this rapidly growing market and the opportunity this transaction presents to us in accelerating our plans to deliver positive free cash flow in calendar 2024,” added Mr. Martin. “We’re proud to have built one of Australia’s leading medical cannabis companies, thanks to our main supplier Aurora, dedicated investors, and dynamic team. Through our vision, we’ve connected clinicians with patients nationwide, positively impacting thousands of lives. This transaction marks an important step for MedReleaf Australia’s ongoing growth, as we believe medical cannabis is now mainstream medicine, and we’re grateful to be part of that story.” – Russell Harding and Nathan Davis, Co-founders of MedReleaf Australia.
- Supports Aurora’s Global Cannabis Leadership: Strengthens Aurora’s presence in Australia, a region experiencing significant growth in medical cannabis adoption, which further solidifies its position as a leading global cannabis company.
- Leverages Aurora’s Strength in Providing Pharmaceutical Grade Cannabis: The Australian model is medical focused and clinician-led, consistent with other markets where Aurora has achieved success. The acquisition demonstrates the Company’s deliberate approach to pursuing market growth that more closely mirrors typical pharmaceutical industries.
- Expands Margins of Australian Business Model: The Transaction is expected to improve Revenue contributions and Gross Margins to further align our Australian business with our other key profitable international markets, most notably Germany, Poland and the United Kingdom.
- Supports Aurora’s Path to Profitability: MedReleaf Australia generated trailing 12-month net revenue of ~AUD$40million (as of December 31, 2023) and was adjusted EBITDA2 and operating cash flow positive. We expect this Transaction to be immediately accretive and will support and accelerate Aurora’s plan to achieve positive free cashflow in calendar 2024.
Aurora, through its wholly owned subsidiary, purchased the remaining approximately 90% equity interest of MedReleaf Australia at a total enterprise value of AUD$50 million subject to customary adjustments. As consideration, Aurora (i) issued the selling shareholders an aggregate of approximately 69.5 million Aurora Shares (the “Share Consideration”); and (ii) paid the selling shareholders AUD$9.45 million in cash (the “Cash Consideration” and together with the Share Consideration, the “Consideration”), subject to customary adjustments post-closing. Approximately 10% of the Consideration will be held in escrow to ensure certain obligations of the selling shareholders.
About Aurora Cannabis
Aurora is opening the world to cannabis, serving both the medical and consumer markets. Headquartered in Edmonton, Alberta, Aurora is a pioneer in global cannabis, dedicated to helping people improve their lives. The Company’s adult-use brand portfolio includes Aurora Drift, San Rafael ’71, Daily Special, Tasty’s, Being and Greybeard. Medical cannabis brands include MedReleaf, CanniMed, Aurora and Whistler Medical Marijuana Co, as well as international brands, Pedanios, Bidiol and CraftPlant. Aurora also has a controlling interest in Bevo Farms Ltd., North America’s leading supplier of propagated agricultural plants. Driven by science and innovation, and with a focus on high-quality cannabis products, Aurora’s brands continue to break through as industry leaders in the medical, performance, wellness and adult recreational markets wherever they are launched. Aurora carries out its operations in compliance with all applicable laws in the countries in which it operates. Learn more at www.auroramj.com and follow us on X and LinkedIn.