Aurora Cannabis unloading Alcanna stake for CA$110M less than it paid

Aurora Cannabis is disposing of another investment for a large loss.

The Alberta company said it is unloading its 23% stake in Alcanna, one of the largest retailers of alcohol and cannabis in North America.

Alcanna and Aurora entered into an agreement with a group of underwriters who agreed to purchase all the common shares the cannabis producer owns of Alcanna on a bought deal basis. The underwriters then would offer the shares to the public via a short-form prospectus.

Aurora’s gross proceeds from the transaction will be about 27.6 million Canadian dollars ($20.6 million).

That is significantly less than the CA$138 million Aurora invested to buy the stake in the retailer two years ago.

Aurora is deep in the red but is intent on reaching profitability this year.

The company recently accepted an offer for a large greenhouse in Exeter, Ontario, for what appears to be one-third of the original purchase price.

Since early 2019, Alcanna has opened 26 retail cannabis stores, including 25 in Alberta and one in Ontario, according to a regulatory filing.

However, with 465 cannabis providers now licensed, the Alberta market is showing signs of reaching retail saturation.

Cannabis sales for Alcanna totaled CA$12.4 million in the quarter ending March 31.

Alcanna’s shares are traded on the Toronto Stock Exchange as CLIQ.

Aurora’s shares trade as ACB on the TSX and New York Stock Exchange.

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One comment on “Aurora Cannabis unloading Alcanna stake for CA$110M less than it paid
  1. Doug on

    You have to wonder where the Aurora managers bought their credentials for how to do business- possibly at a special in aisle four at WalMart when they were stoned. Perhaps they should consult Trump on how to stop screwing investors. Do investors understand dilution or are they just waiting to become totally ripped off before they get the message? As Aurora throws way a hundred and ten million on a bad business deal, someone should back up a dumpster and recycle some of the management.

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