Benzinga | Nov 8, 2021 09:40AM EST

Aurora Sets Up Position In The Netherlands With Significant Equity Stake in Growery B.V.

Aurora Cannabis Inc. (NASDAQ: ACB) (TSX:ACB) revealed Monday that its subsidiary Aurora Nederland B.V. will invest in Netherlands-based Growery B.V., one of the few license holders entitled to participate in the Controlled Cannabis Supply Chain experiment. The two companies signed an agreement in relation to the investment, which is subject to the regulatory notification procedure.

Under the deal, Aurora plans to invest an immaterial cash amount of which a portion is due and payable upfront with the remainder dependent on Growery achieving certain milestones. This means that the company will provide a secured loan to Growery to construct a facility, fund early operations

and provide technical and operational support through its Netherlands-based state-of-the-art research facility for medical cannabis.

Aurora expects to fully consolidate the revenues realized through the investment into Growery under the applicable International Financial Reporting Standards.

"Our investment in Growery is a significant advancement for our global recreational cannabis strategy. The Netherlands is expected to be the largest federally regulated recreational market outside of Canada, and is a proof point that our medical market success in Europe is portable to recreational markets," Miguel Martin, CEO of Aurora Cannabis stated. "Aurora's global leadership is underscored by a proven track record of regulatory compliance, testing, and commitment to science. With similar values and commitment to excellence, we are pleased to be working with Growery to enter the Dutch market."

About The Experimental Cannabis Program

The Controlled Cannabis Supply Chain (CCSC) experiment in the Netherlands is scheduled to be in effect for a minimum of four years, during which the Dutch government will evaluate if the rules of the CCSC should be expanded nationally. The projected demand during the experimental program is around 30,000 kg of dried flower per year. In the case of the national expansion of the program -- from around 80 coffee shops to almost 600 coffee shops, it is estimated that the country would need around 200,000 kg of dried flower annually.

"The shared expertise of Growery and Aurora will enable the delivery of high-quality cannabis to the new recreational program in the Netherlands," declared a spokesperson from Growery. "We aspire to be a driving force in this evolving market and a premier provider of cannabis to consumers. In Aurora, we have found an experienced partner with the global leadership needed to enable a significant head start in the CCSC."

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Price Action

Aurora's shares were trading 1.20% higher at $6.74 during Monday's pre-market session.

Photo: Courtesy of Esteban Lopez via Unsplash