Aphria Announces Strategic Supply Agreement With Canndoc

Aphria now positioned within two of the largest cannabis markets outside of Canada
Agreement with Israeli leader Canndoc provides access to Israel’s largest drugstore chain
Finished product will be co-branded under Aphria and Canndoc brands

CANADA: Aphria Inc., a leading global cannabis company, today announced it has entered into a Strategic Supply Agreement with Canndoc Ltd., a subsidiary of InterCure Ltd., one of Israel’s largest and most established medical cannabis producers.

Under the terms of the Agreement, Aphria will supply Canndoc with dried bulk flower over a two-year period, with the option to extend for two additional terms of two years each, and an option for an additional year after that if the parties agree to terms.  During the first two-year term and each additional term, if applicable, the Company will provide Canndoc with 3,000 kgs. of bulk dried flower, which will be processed into finished product, co-branded under the Aphria and Canndoc brand names, and sold exclusively within the Israeli market.

“We are excited about our strategic partnership with Canndoc, a well-established Israeli leader, and the opportunity to continue to expand our medical cannabis brand internationally,” said Irwin D. Simon, Chairman and Chief Executive Officer, Aphria Inc. “Today’s announcement is about more than a supply agreement. It’s about the strength and quality of our medical brand, Aphria, being continuously validated by the world’s medical cannabis markets, including countries in which we have no distribution today. The Agreement represents a significant step for Aphria, and we look forward to bringing our high-quality medical cannabis products to patients in Israel.”

“We are proud to partner with Aphria, a global leader who shares with us the same quality values and commitments of meeting patients’ needs and improving their quality of life. This is another vote of confidence in Canndoc’s leadership and the Israeli market,” said Ehud Barak, former Israeli Prime Minister and Chairman of the Canndoc Board of Directors.

The strategic partnership will also include the possibility of Aphria and Canndoc collaborating on research initiatives such as clinical trials focused on the use of medical cannabis with leading hospitals and research institutions in Israel and exploring potential collaboration in the EU market.

Now strategically positioned in two of the largest cannabis markets outside of Canada, Germany, one of the most highly sought-after developed medical cannabis markets in the world, and Israel, one of the largest importers of medical cannabis in the world, the Company will continue to leverage its market leadership as it develops its medical cannabis markets internationally.

Canndoc has been pioneering Pharma-Grade cannabis for more than 13 years and has established itself as a well-respected company in the global cannabis industry. In March 2020, Canndoc entered a strategic partnership with Super-Pharm, Israel’s largest drugstore chain, allowing for Canndoc’s products to be distributed across 95 medical cannabis authorized pharmacies and sold to Israel’s growing medical cannabis patient community.

Aphria Announces Closing Of $100 Million Strategic Investment From Institutional Investor

CANADA: Aphria announced that it closed its previously announced strategic investment from an institutional investor for aggregate gross proceeds to the Company of C$100,000,001.

Pursuant to the Offering, the Significant Investor has agreed to purchase 14,044,944 units of the Company at a price of C$7.12 per unit. Each unit is comprised of one common share of Aphria and one-half of one common share purchase warrant of Aphria. Each warrant will entitle the Significant Investor to acquire one common share at a price of $9.26 for a period of 24 months from the closing date of the Offering.

As previously disclosed, the Company intends to use the net proceeds from the Offering to finance international expansion, working capital and general corporate purposes.

The units and the securities comprising the units are being offered pursuant to a shelf registration statement (including a prospectus) previously filed with and declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on November 26, 2019 and, in Canada, will be offered and sold in Ontario only by way of a prospectus supplement.

“We are pleased to be closing this successful $100 million strategic investment that reinforces confidence in our business and management team,” said Irwin D. Simon, Chief Executive Officer. “Importantly, now with nearly $600 million, our balance sheet has been further strengthened and will continue to support us as we execute upon our strategic plan for continued growth.”

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which an offer, solicitation or sale would be unlawful prior to registration and qualification under the securities law of such jurisdiction.

Copies of the prospectus supplement and shelf registration statement are available relating to a particular offering will be available, under Aphria’s profile on SEDAR at www.sedar.com and EDGAR at www.sec.gov, respectively.

Aphria Agrees To Accelerate Expiry Of Green Growth Brands Bid And Terminate Its Option With GA Opportunities Corp

CANADA: Aphria announced that it has entered into a series of transactions that will accelerate the expiry date to April 25, 2019 for the previously announced take-over bid by Green Growth Brands Inc. and will terminate the arrangements with GA Opportunities Corp. for consideration of $89.0 million.
 
Irwin D. Simon, Aphria’s Chairman and Interim Chief Executive Officer stated, “We are very pleased to move forward with this favorable resolution as we continue to focus on the long-term growth of our leading cannabis business. We plan to use the $89.0 million in proceeds from the transaction to fund our strategic global expansion initiatives. On behalf of our Board of Directors and management team, we continue to recommend that Aphria shareholders reject the GGB offer and do not tender their Aphria shares to the GGB offer.”
 
Aphria has entered into a shortened deposit period agreement with GGB to facilitate the acceleration of the expiry of GGB’s offer to purchase all of the issued and outstanding shares of Aphria. In that regard, Aphria has agreed to reduce the initial deposit period of the bid to 92 days from January 23, 2019, the date that GGB commenced the GGB Offer. GGB will be mailing a Notice of Variation providing that the GGB Offer will expire at 5:00 p.m. on April 25, 2019. Based on the closing price of $3.86 per GGB share on the Canadian Securities Exchange on April 12, 2019, the implied consideration under the GGB Offer would be $6.07 per Aphria share, representing a significant 54.7% discount to Aphria’s closing price on the Toronto Stock Exchange of $13.41 per share on the same day.
 
In light of the foregoing and for the reasons previously disclosed, Aphria continues to recommend that Aphria shareholders reject the GGB Offer and do not tender their Aphria shares to the GGB Offer. 
 
In connection with the foregoing, GGB has entered into a share purchase agreement with GAOC pursuant to which GGB has agreed to purchase for cancellation 27.3 million shares held by GAOC, for an aggregate purchase price of $89.0 million. The terms of the Share Purchase Agreement include, among other things, that GGB will pay in cash $50.0 million of the Purchase Price to GAOC within 30 days of the date hereof and will issue a promissory note to GAOC for $39.0 million due in six months from the Closing Date. GGB has granted a security interest to GAOC to secure its obligations under the Share Purchase Agreement and the GGB Note. The completion of the Share Repurchase is conditional on the Purchase Price, on a per share basis, not being greater than the simple average of the closing price of the GGB shares on the CSE for the 20 trading days prior to the Closing Date.
 
Aphria and GAOC have also entered into a debt/call option settlement agreement pursuant to which Aphria has agreed to settle the debt owed under a promissory note issued by GAOC to Aphria in the amount of $55.0 million and terminate its rights under a related call option in consideration for total consideration of $89.0 million payable by GAOC upon the receipt of funds received under the Share Purchase Agreement and the GGB Note. GAOC has granted a security interest to Aphria to secure its obligations under the Settlement Agreement.

Aphria Receives Health Canada License Amendment, Approving Fully Expanded Production At Aphria One

CANADA: Aphria has announced that Health Canada has granted the Company its license amendment, permitting Aphria to commence production in an additional 800,000 square feet of facilities at its Aphria One location, as part of the Company’s completed Part IV and Part V expansions.

aphria logo“This is a major milestone for Aphria on its path to becoming a leading global cannabis producer, as well as a positive development greatly anticipated by the Canadian cannabis industry,” said Irwin D. Simon, Interim CEO of Aphria. “Aphria’s progress expanding production and automation is essential to our strategy of securing scale and long-term advantages that enable the evolution of the cannabis industry through product and brand innovation. With Aphria One, we now have the ability to expand our production capacity by over three times.”

Simon concluded, “We are ready to hit the ground running and look forward to alleviating industry-wide supply constraints with our greatly expanded production capacity and sophisticated, proprietary automation technology that will ensure Aphria remains at the forefront of cannabis cultivation and innovation. In anticipation of Health Canada’s approval, we had allocated a portion of our previously approved capacity to mother and vegetative plants that will be used as the initial growing crops in Part IV and Part V. As a result of these measures, growing operations in the expanded facilities are expected to commence without delay. By this Friday, we will move swiftly to establish nearly 22,000 plants in the Part IV and Part V expansion, with an additional 12,000 plants added each week thereafter until we reach full crop rotation.”

Industry-Leading Automation

The completed Part IV & Part V expansions at Aphria One bring industrial-scale horticulture production technology to cannabis cultivation. While critical phases such as initial cuttings, trimming and pruning mature plants will be performed by hand, the in-house designed technology will automate key steps, including:

  • Transplanting cuttings
  • Transporting plants through harvesting
  • De-budding & rough trimming
  • Drying & curing
  • Waste disposal

Aphria One

The 700,000 square foot Part IV Expansion and the 100,000 square foot Part V expansion represent the completion of Aphria’s five-part expansion at Aphria. Once in full rotation, Part IV and Part V will produce on an incremental annualized basis 80,000 kg bringing the total annualize production capacity at Aphria One to 110,000 kg.

Aphria Announces Early Termination And Liquidation of Interests In Liberty Health Sciences

Cash proceeds of $47 million received, with additional $10 million upon satisfaction of certain conditions

CANADA: Aphria announced that independent members of its Board of Directors consisting of Shlomo Bibas, John Herhalt, Tom Looney and Irwin Simon, unanimously approved the early termination and liquidation of a promissory note, option and other agreements related to the Company’s previously announced divestment of all interests in Liberty Health Sciences.
 
As detailed on September 6, 2018, the Company entered into a share purchase agreement with a group of buyers, wherein it completed the sale of the shares making up 100% of its outstanding interest in Liberty, in exchange for a five-year promissory note due September 6, 2023, bearing interest at 12% per annum and in the amount of $59,097,986. Aphria retained an irrevocable option to repurchase its shares in Liberty from the buyers for a period of up to five years, subject to the satisfaction of certain conditions.

In line with Aphria’s commitment to enhanced corporate governance practices and a renewed focus on its
strategic plan, the option in the Liberty shares represented a non-essential holding of the Company. Accordingly, the independent members of the Board of Directors unanimously approved the Early Termination and Liquidation  wherein the Company received  cash  consideration (the “Consideration”) of
$47.4 million and may earn up to an additional $10 million based on certain value thresholds, if the counterparties monetize the Liberty shares underlying the terminated option within six months. Jefferies LLC acted as financial advisor to the Company.

The Early Termination and Liquidation represents the ultimate conclusion of Aphria’s investment in Liberty. From Aphria’s first investment in Liberty of $25 million in April 2017 until today’s date, Aphria earned a return equal to 3.4 times its cumulative investment in Liberty, an internal rate of return of approximately 167.2% on the initial investment.

Aphria’s Board of Directors Rejects Green Growth Brand’s Hostile Takeover Bid As Significantly Undervalued And Inadequate

CANADA: Aphria announced that its Board of Directors has rejected the hostile bid by Green Growth Brands to acquire all of the outstanding common shares of the Company including any Common Shares that may become issued and outstanding after January 22, 2019, but prior to the expiry of the hostile bid upon the exercise, conversion or exchange of options, warrants, debentures or other securities of the Company exercisable or convertible into Common Shares, other than Common Shares owned by GGB or its affiliates, in exchange for 1.5714 shares of GGB.

aphria logoBased on the 20-day volume-weighted average price of GGB shares immediately before GGB’s announcement of an intention to acquire the Common Shares of the Company, the Hostile Bid reflects a 23% discount to the Company’s share price over the same period. The Board made its recommendation after careful consideration and receipt of the recommendation of a committee of its independent directors (the “Independent Committee”), who were advised by financial and legal advisors.

In the Board’s view, the Hostile Bid:

  • Significantly undervalues Aphria relative to its current and future worth, offering Aphria shareholders a substantial discount to its current and future value as opposed to a premium observed in other transactions in the cannabis sector involving Canadian licensed producers.
  • Would have negative repercussions, including delisting from the TSX and NYSE and a potential reduction in interest from strategic partners, that could destroy value for Aphria shareholders, with minimal offsetting operational, financial or strategic benefits.
  • Would result in Aphria shareholders effectively giving GGB shareholders a 36% interest in Aphria in exchange for shares in a company with limited operations or other experience in the cannabis industry.
  • Does not account for Aphria’s bright outlook, either as an independent company or in partnership with a strategic partner, which offers Aphria shareholders substantial value creation.

Aphria Introduces First Cannabis Strains To Be Produced In Europe With Export To Danish Partner Schroll Medical

CANADA: Aphria Inc. completed its first transfer of plant cuttings from four of the Company’s cannabis strains to Denmark-based Schroll Medical, as part of the Company’s previously announced Strategic Partnership with Schroll. The shipment was completed under permits issued by the relevant health authorities, including an export permit from Health Canada, an import permit from the Danish Medicines Agency and a phytosanitary certificate from the Canadian Food Inspection Agency.  

aphria logo“We are pleased to introduce the first four Aphria strains to be produced in Europe, through our strategic alliance with Schroll,” said Hendrik Knopp, Managing Director of Aphria Germany, who is overseeing the Partnership on behalf of Aphria and Schroll. “This marks another important milestone for Aphria as we extend our leadership position in the European market, and it gives me joy to be able to say today that we literally have a good thing growing in Europe.”  

As previously announced, Aphria will handle the worldwide distribution of medical cannabis produced by the Partnership, which is anticipated to be made available to markets across Europe as medical cannabis markets develop. Aphria plans to complete a second shipment of additional strains to Schroll in the coming months.

Aphria Completes Acquisition Of German Pharmaceutical & Medical Cannabis Distributor CC Pharma

CANADA: Aphria Inc. announced that it had completed its acquisition of CC Pharma GmbH, a leading distributor of pharmaceutical products, including medical cannabis, to more than 13,000 pharmacies in Germany, as well as throughout Europe. The Company continues to strengthen its end-to-end cannabis operations and infrastructure in Germany.

aphria logo“As one of the most promising medical cannabis markets in the world, Germany is a top strategic priority for Aphria. With today’s acquisition of CC Pharma, Aphria is creating a German and ultimately pan-European platform that brings together demand, supply and distribution.” said Vic Neufeld, CEO of Aphria. “We’re excited to welcome the CC Pharma team and the pharmacists they serve to the Aphria family.”

Dr. Manfred Ziegler, Managing Director of CC Pharma, added, “We’re thrilled to be joining forces with Aphria. Access to Aphria’s innovative products creates significant opportunities for CC Pharma’s customers to experience more medical cannabis treatment options.”

CC Pharma is a leading importer and distributor of EU-pharmaceuticals for the German market. Founded in 1999, today it has over 230 employees and offices in Germany, Denmark, Poland and the Czech Republic. CC Pharma holds 318 active German national pharmaceutical licenses and 692 active EU pharmaceutical licenses, and also operates a production, repackaging and labeling facility at its headquarters in Densborn, Germany. During 2018, CC Pharma generated revenue of approximately €262 million, with EBITDA of approximately €10.5 million.

“Through a series of deliberate and strategic partnerships, investments and appointments over the past 18 months, Aphria is a front runner in the German medical cannabis market,” said Hendrik Knopp, Managing Director of Aphria Germany. “CC Pharma’s shared values, deep relationships and local regulatory and logistical experience are a perfect complement to Aphria’s expertise. One of our first steps will be to create a new division of CC Pharma dedicated to medical cannabis.”

In addition to today’s acquisition of CC Pharma, other previously announced strategic milestones for Aphria and its wholly owned subsidiaries in Germany include:

A significant supply agreement to provide CC Pharma approximately 1,200 kilograms of medical cannabis products, exported from Canada and Denmark to Germany.

A 2018 investment in Berlin-based Schöneberg Hospital, a first step in Aphria’s plans to build and operate pain treatment centres throughout Germany.

The construction of a state-of-the-art, GMP certified cannabis vaults (5,000 kg storage capacity), in Bad Bramstedt, Germany, to be completed by late spring 2019.

The start of construction of a Research and Development indoor growing facility in Neumünster, Germany, in preparation for in-country cultivation.

Aphria paid €18.92 million in cash to the former shareholders of CC Pharma with an earn-out multiple on future EBITDA of up to another €23.5 million, if certain performance milestones are met.

Aphria’s Colombian Subsidiary, Colcanna, Inks Exclusive Agreement With Colombian Medical Federation

CANADA:  Aphria announced that its Colombian subsidiary has signed an exclusive agreement with the Federación Médica Colombiana, a national guild that oversees the ethical exercise of the medical profession in Colombia, to jointly develop an academic curriculum on the medicinal use of cannabis.

“Education in the medical community is critical for sustaining the advancement of medical cannabis in Colombia” said Gabriel Meneses, Vice President, LATAM & Caribbean at Aphria. “Colcanna is proud to make this exclusive arrangement with Federación Médica Colombiana, which will offer doctors and medical professionals across the country a credible and trusted source of information and training on medical cannabis.”

The FMC has nearly 2,000 affiliated doctors and a database of more than 70,000 medical professionals that access the organization for research and educational resources, including through a virtual platform that offers certified courses on a range of subjects. The medical cannabis curriculum developed by Colcanna and FMC will be made accessible on this platform and will be supported by scientific events for the medical community.

“As a leading global cannabis company, Aphria is committed to the long-term advancement of medical cannabis in every market in which we operate, through our diversified approach to innovation, strategic partnership and expansion,” said Jakob Ripshtein, President of Aphria. “Partnerships like this between Colcanna and FMC are a direct result of our comprehensive approach to establishing a leading foothold in Colombia, throughout Latin America and in markets around the world.”

New Report: Legal Cannabis Market Projected To Grow 27% CAGR By 2023

IRELAND: The legal cannabis market is projected to register a CAGR of over 27% by 2023, according to “Global Legal Cannabis Market 2019-2023” a new report just added to ResearchAndMarkets.com.

The latest trend gaining momentum in the market is the use of advanced techniques in cannabis cultivation. According to the report, one of the major drivers for this market is the rapid legalization of cannabis. Further, the report states that one of the major factors hindering the growth of this market is the health hazards associated with the consumption of cannabis products.

Market Trends

  • Increasing demand due to growing number of patients who need cannabis for medical use
  • Use of advanced techniques in cannabis cultivation
  • Rising mergers and acquisitions in the cannabis sector

Key Players

  • Aphria
  • Aurora Cannabis
  • Canopy Growth Corporation
  • CV Sciences
  • Tilray