Canada-based Aurora Cannabis has purchased two Lithuanian hemp companies for a total of €6.3 million ($7.3 million) in cash and stock. Aurora bought seed contractor and processor Agropro UAB, and Borela UAB, a processor and distributor of hemp-based food products, the company announced.
Aurora, Edmonton, Alberta, paid €5,364,000 (approximately $6.2 million) in cash and €960,000 ($1.1 million) in stock to purchase 100% of the two firms.
Second Canadian acquisition in month
It’s the second major acquisition by a Canadian cannabis company in Europe in the past month after The Green Organic Dutchman Holdings Ltd., Ancaster, Ontario, bought Polish hemp firm HemPoland for €15 million ($17.4 million) plus a €10 million ($11.6 million) incentive package in August.
Aurora said it also will refinance existing debt of the acquired firms totaling €2,076,000 (approximately $2.4 million).
“Through Aurora, we gain access to a wider distribution network, as well as access to industry-leading science to help ramp up production, while enhancing margins through the introduction of new products, proven production techniques, and robust genetics,” said Skirmantas Nikstele Co-Founder & CEO at Agropro.
1,600 hectares under hemp
The Lithuanian companies have 1,600 hectares (4,000 acres) of hemp under contract with the potential to yield more than 1,000,000 kg (1,100 tons) of organic hemp. Additional contracts available to the companies could expand hemp fields to more than 3,000 hectares (7,400 acres) across Lithuania, Latvia, Estonia, and Poland, according to a statement from Aurora.
Aurora sees potential to produce CBD from hemp biomass the two Lithuanian companies have heretofore left in the field unused as they focused exclusively on the production and sale of hemp seed-based products.
Full value-chain strategy
Aurora said it intends to produce a range of organic CBD-based medical and wellness products following a strategy that covers the entire value chain, from supply, through genetics research and clinical trials, to product development and distribution to various domestic and international markets across five continents.
“With a broad European footprint, extensive contracted land agreements and solid existing revenue streams, Agropro and Borela provide further expansion of our international footprint, while playing an important role in the execution of our CBD wellness and hemp-based food products strategy,” said Neil Belot, Chief Global Business Development Officer.
Agropro and Borela already have markets across Europe, North America and Asia.
Both companies have organic certification, and Borela’s hemp grain processing facility earlier this year received a certificate from BRC, a group that certifies supply chain standards; it allows the company to supply supermarkets with its products. Borela also holds USDA Organic, Eco-Cert and other certifications that enhance the company’s ability to market premium products across large markets, Aurora noted.