Hempco Secures C$4 Million Loan Facility from Aurora

Published: April 29, 2019

Hempco Food and Fiber Inc. has entered into a loan agreement with Aurora Cannabis Inc. pursuant to which Aurora has agreed to lend to Hempco up to C$4 million. The Loan Agreement has been entered into as part of the transaction agreed to by both Aurora and Hempco in a binding letter agreement announced by the companies in a joint press release dated April 16, 2019, and providing for the purchase, by Aurora, of all of the issued and outstanding shares of Hempco not already owned by Aurora. The Loan will be secured by a Guarantee from Hempco’s wholly-owned operating subsidiary, Hempco Canada Superfoods Inc., and a General Security Agreement pledging all of Hempco’s assets.

The Loan is intended as a bridge loan to fund completion of Hempco’s 56,000 sq ft, 2.9 million kg-per-year, state-of-the-art hemp processing facility in Nisku, Alberta, and to provide Hempco with working capital for operations while the Parties work towards completion of the Transaction contemplated in their binding letter agreement. Principal amounts advanced pursuant to the Loan Agreement are to bear interest at the rate of 8% and must be repaid by January 15, 2021. Under the terms of the Loan Agreement, Aurora has the discretion to halt advances of loan proceeds at any time, in its sole but reasonable discretion.