Canadian cannabis M&As ready to ‘go crazy’: Q&A with Aurora CFO Glen Ibbott

By Omar Sacirbey

Glen Ibbott had a successful career as a top executive with U.S. life sciences companies worth hundreds of millions of dollars that listed on the Nasdaq Stock Market.

But it wasn’t hard for Canada’s Aurora Cannabis to lure Ibbott north of the border to become the medical marijuana producer’s chief financial officer.

Canada is preparing to launch an adult-use industry in 2018. And Ibbott liked the idea of working in a country where companies are pioneering the global cannabis market.

He was also drawn by the explosion of merger and acquisition activity in Canada and Alberta-based Aurora’s plans to trade on the Toronto Stock Exchange.

Ibbott, who became Aurora’s CFO in May, spoke with Marijuana Business Daily about IPOs, Canadian cannabis M&As and being a part of history.

What are the priorities you started with?

On the M&A side, because of our position – with the market cap and the balance sheet that we’ve got – we’re starting to see a lot of opportunities both domestically and internationally that we need to go after hard and fast.

We’re also listed on the TSX Venture Exchange (trading as ACB) – which is the junior exchange of the Toronto Stock Exchange – and we want to be listed on the senior board (Toronto Stock Exchange).

There are a lot more financial controls and diligence, and it helps if you’ve been through it. They’ve got a good team here, but they need more hands to get ready for that move to the TSX.

Where do you want to make acquisitions?

We just invested in an IPO in Australia called the Cann Group, going in at 19.9%, and we hope to see that develop into something more than just a financial investment. It’s there and Europe, and perhaps Israel.

The international space is intriguing, and there are some really good opportunities there. We’re looking at lots of stuff in Canada as well.

How do you prepare yourself for an M&A deal?

You need to be able to differentiate yourself, whether you’re first into the space or you’ve got a unique offering that can’t be easily replicated.

And you’ve got to look at the market and how you’re going to tell who’s going to be successful. And that will differ from country to country, depending on the regulatory regime.

Beyond that, you’ve just got to be prepared. This space is going to change so rapidly.

I think in the next few years, there will be a handful of big players and then a number of specialized businesses – almost like craft beer – and then all the others will get washed out.

They’ll get bought because they have reliable supply, or they have a unique offering that helps the company compete in the space. I think the M&A side of this is going to go crazy in the next couple of years.

Whether you want to get taken out or partner with somebody, you have to be prepared to move quickly. You need to have your financial and legal house in order.

In companies I’ve worked for, we’ve always had a data room ready, having all of our paperwork and tax returns ready. We have this prepared well before we even talk to anybody. You just make it part of your business to have these things up to date.

If you’re buying somebody, what are you looking for?

You want to make sure they don’t have any legal liabilities or that somebody is suing them. You want to understand how they compete in the space and why they’re different.

Nobody has the time or resources to do everything. But even keeping a couple of the fundamentals ready to go so if someone pops up and says, “Hey, we’re really interested in doing a deal or partnering with you; can you send some stuff over?”

It’s important to be prepared for that because a potential partner may not be able to wait for that for several months. They’ll move on to something else.

We plan to be very active, and I think there’s lots of opportunities. And from what I can see, our competitors are of the same mindset.

Why did you join the cannabis industry?

Why not? I spent most of the last 20 years in pharma and biotech, mainly publicly listed U.S. companies. They’re very dynamic, especially in smaller biotech, when you’re developing a lead drug and you’re going to live or die based on the success of that drug.

But when I looked at this industry, I basically thought this is a once-in-a-lifetime opportunity. How often do you see an industry where the demand is there, the governments are kind of starting to open up?

I haven’t ever seen an opportunity at this stage. It’s something you read in the history books, like a couple hundred years ago when guys were building railroads. It feels like you’re at the start of something big, and what’s ahead of us is just incredible.

The industry itself is really attractive, and when I looked at Aurora, you’ve got entrepreneurs who have a really solid track record of success. If you can show success, it’s more likely you can replicate it.

Plus, the company itself is really well positioned. Good market cap, just raised a bunch of money – I think we have the team and resources to really go after it.

It’s almost a no-brainer. Why wouldn’t you jump at this opportunity? I think the next few years are just going to be a blast.

This interview has been edited for length and clarity.

Omar Sacirbey can be reached at [email protected]

3 comments on “Canadian cannabis M&As ready to ‘go crazy’: Q&A with Aurora CFO Glen Ibbott
  1. KEN TAYLOR on

    Canada is primed for cannabis legalization…but the model of producing huge quantities of medical or recreational cannabis plants in a closed controlled space has never proven to be a sustainable growing practice for the food industry so likely the same results for cannabis industry. Hope that Aurora envisions a better way of maintaining high quality cannabis supply chain!

    Reply
  2. Peter Reynolds on

    Well that would be great because my investments in Aphira and Canopy are tanking – absolutely disastrous performance over the past six months which has made me regret investing in them.

    Reply
  3. Dennis Cator on

    This opportunity is just like the Radio the turn of the century FM by Armstrong and the creation of RCA. The railroads the software tech creation. Its going to be very big. To many short sited fear full investors expect too much too soon and need to have faith knowledge and patience for this amazing industry. Look at it this way there are serious stake holders involved.

    Reply

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