Aurora To Acquire Organic Cannabis Producer Whistler For $175M

Canada-based Aurora Cannabis Inc. (NYSE: ACB) announced Monday it's entering into a letter of intent to acquire privately-held Whistler Medical Marijuana Corporation.

The all-stock deal is valued at up to $175 million, which also includes future milestone payments related to Whistler reaching certain operational goals.

Whistler Medical Marijuana Corporation is a Canadian certified organic cannabis producer that operates in both medical and adult-use markets. The company was founded in 2013 and was one of the original 10 cannabis producers in Canada. Whistler was also the first company to obtain an organic certification.

Why It's Important

Whistler has two indoor facilities in British Columbia. The company also sells medical cannabis derivatives to Australia and the Cayman Islands.

Whistler is also cash-flow positive since 2015 and has EBITDA margins exceeding 30 percent. The company sells its products by focusing on high-quality organic products, Aurora said in a statement.

What's Next

Whistler's second facility is on track to reach its full capacity, which is expected in September. After that, both facilities will have a combined capacity of 5,000 kilograms per year. Aurora plans to further expand Whistler's international footprint by exploring new export destinations, such as the EU given that the second facility is built in compliance with the EU Good Manufacturing Practice (GMP) standards.

The transaction is subject to certain closing conditions and the approval of the Whistler shareholders.

Aurora's stock traded at $6.70 at time of publication, up 5.4 percent.

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