Canada’s Aurora Cannabis recently announced the completion of its acquisition of ICC Labs which is now a wholly owned subsidiary. ICC Labs is based in Uruguay and the acquisition was completed after receiving approval from the regulatory authority the Instituto de Regulación y Control del Cannabis. In announcing the finalization of the acquisition, Aurora also makes a compelling case for its leading role in Latin America.
Completing the acquisition
Aurora Cannabis Inc.’s (NYSE: ACB) (TSX: ACB) (Frankfurt: 21P; WKN: A1C4WM) announcement regarding the finalization of its acquisition of ICC Labs Inc. comes as no surprise to cannabis industry watchers. Much of the process has been transparent due to the multiple public listings of Aurora Cannabis and the public status of ICC Labs. Aurora’s purchase of all issued and outstanding common shares of ICC Labs is the last stage of the process and was completed at $1.95 per share payable in common shares of Aurora. ICC will be delisted from TSX-V.
Aurora noted that the acquisition required the final approval of the Instituto de Regulación y Control del Cannabis which regulates cannabis in Uruguay, the first nation in the world to fully legalize cannabis. ICC Labs’ location in one of Uruguay’s free trade zones makes it well-positioned to allow Aurora access not only to Uruguay’s market but to much larger markets in Latin America and beyond. In addition, ICC Labs was able to take advantage of early mover status in a country that it has early mover status in the cannabis industry.
ICC’s advantage in CBD production
ICC Labs brings a strong advantage in CBD production to Aurora. It is the first Latin American company with an extraction facility that is GMP compliant. This facility allows ICC Labs to produce CBD products for the global market.
Uruguay is the only country in the world where commercial-scale cultivation of hemp rich in CBD with THC concentrations up to 1 percent is permitted. ICC has already launched a line of CBD products under the BIDIOL brand and has built a large-scale CBD extraction facility within a free trade zone. This location means that exported products from the facility are exempt from local taxes.
ICC Labs also has access to high CBD strains including exclusive use of CW2A-B in South America. In addition, ICC Labs has already created product lines that include such CBD products as creams, infused syrups and patches as well as other cannabis products. Production facilities are supported by significant grow operations including:
– two greenhouse facilities with 92,000 square feet.
– three outdoor sites with over 800 available acres.
– plans for a 1 million square foot greenhouse facility.
Aurora’s international operations
Acquiring ICC Labs is another step in building international reach and market domination with 15 wholly owned subsidiaries. In addition, Aurora has invested in and partnered with a broad range of companies. These subsidiaries and relationships mean that Aurora can benefit from synergies between companies. For example, they are currently exploring possibilities between ICC Labs and another subsidiary, MED Colombia, which will further strengthen its position in Latin America.
Aurora’s argument that acquiring ICC Labs is yet another example of its world leadership role is compelling. Certainly, other companies would argue with their stance but, regardless of who is truly the world’s best at the moment, Aurora Cannabis has clearly built a solid position for the long haul.