Canada’s Aurora Cannabis to Acquire Mexico’s Farmacias Magistrales S.A.

Deal opens up market of 130m potential consumers for Canadian producer

Aurora_Farmacias_mgretailer

EDMONTON, Alberta–Canadian cannabis producer Aurora Cannabis (NYSE: ACB) today announced acquisition of Mexico City-based pharmaceutical supplier Farmacias Magistrales S.A.

The news of today’s deal follows on an announcement on Friday, when Aurora and Farmacias came to an agreement for Aurora to supply Farmacias’ massive healthcare and retail network of vendors, including drugstores, pharmacies, and hospitals with THC and CBD products. According to media reports, the acquisition unlocks potential for a market of 130 million consumers.

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“This transaction firmly establishes Aurora’s first-mover advantage in one of the world’s most populous countries, where more than 130 million people will have federally legal access to a range of Aurora’s non-flower medical cannabis products containing THC,” said a press release issued by Aurora.

Farmacias is, so far, the first and only company licensed in Mexico to “import, manufacture, store, and distribute medical cannabis containing THC in Mexico.” CBD products are available through its 80,000 retail vendors, while medical cannabis products containing THC would be available through 500 healthcare providers and pharmacies.

Julio Sánchez y Tépoz, Secretary of the Federal Commission for Protection Against Health Risks (“COFEPRIS”), the Mexican government body responsible for medical cannabis licensing said, “We are pleased to have issued the first THC licenses in the country to Farmacias Magistrales, and we look forward to promoting the development of a tightly regulated medical cannabis industry that facilitates safe and effective access for the people of Mexico.”

“This transaction positions Aurora with exclusive access to supply THC-containing medical cannabis to a large market of more than 130 million people, while also enabling us to capture the full margin of the medical cannabis we sell there,” Aurora Chief Executive Officer Terry Booth stated. “Farmacias has a large distribution network of both retail outlets and pharmacies, which will enable us to quickly scale up our operations across Mexico. Integrating Farmacias with our operations in Canada and Latin America will not only accelerate growth, it will build substantial long-term shareholder value.”

Farmacias said it plans to introduce CBD and THC oils for pharmaceutical use, but also rapidly expand its product portfolio to include “capsules, topical solutions, and sprays and various other delivery formats,” adding that, “Farmacias is currently licensed to manufacture, among others, oral, nasal, and suppository products.”

Dried cannabis flower containing THC is prohibited for domestic cultivation, import or sale in Mexico.

Edmonton-based Aurora has capacity to produce 500,000 kilograms of cannabis annually, as well as current operations and sales in 22 countries.

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