Aurora Cannabis Inc., as previously reported, has been planning to make a strategic investment in Hempco for a while- but now, it’s official.
Announced on July 31, 2017, the agreement is an amended version of the original plan, whereby Aurora gets a 19.9% ownership stake in Hempco for $3.2 million, with an option, that if exercised, would result in Aurora having 50.1% ownership of Hempco.
If that sounds familiar to the old deal, you’re right. The major amendment is that Aurora has now agreed to give Hempco an advance of $1.5 million at a 10% interest rate, in addition to the $750,000 advance announced back in June. This new advance shows Aurora’s confidence in Hempco as they double up at a higher interest rate.
Even better for Aurora, they get first dibs on all of Hempco’s industrial hemp with the right of first refusal. As Hempco is one of the world’s largest producers of industrial hemp products, this gives Aurora a huge advantage in getting hemp for CBD extraction.
Aurora also has the right to appoint two of Hempco’s Board Directors, and as long as Aurora maintains a 10% ownership, it can be involved in Hempco’s future financings in order to preserve its ownership.
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