Aurora Cannabis Inc. ("Aurora") (TSX: ACB) (OTCQB: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) and MedReleaf Corp. ("MedReleaf") (TSX: LEAF) today announced the closing of the previously announced arrangement agreement (the "Arrangement Agreement"). Under the terms of the Arrangement Agreement, holders of MedReleaf common shares received 3.575 common shares of Aurora for each MedReleaf common share held (the "Exchange Ratio").

Upon closing of the transaction, Aurora will submit applications with the Toronto Stock Exchange (the "TSX") and the Ontario Securities Commission (the "OSC") to delist MedReleaf's existing common shares and for MedReleaf to cease to be a reporting issuer, respectively.

Management Commentary

"The closing of this transaction brings together two vertically integrated, successful pioneers in the cannabis industry, creating a company with more than 1,200 employees and a rapidly growing domestic and international footprint," said Terry Booth, CEO of Aurora. "The combination of MedReleaf and Aurora creates a well capitalized company positioned exceptionally well to generate further shareholder value, driven by the low-cost production of high-quality cannabis products. We will be applying our proven integration methodology, and will continue to execute to the Aurora Standard in capitalizing on the significant opportunities in the domestic and global cannabis industry."  

Mr. Booth added "Each of the strategic transactions Aurora has concluded have further advanced our envisioned business strategy of establishing a powerful, integrated and strongly differentiated cannabis company – positioned for continued rapid growth, and built to last. Our large-scale, high technology production facilities, strong science, R&D and product development capabilities, diversified product portfolio, and growing domestic and international distribution networks provide Aurora with significant competitive advantages in both the Canadian and global cannabis markets."

Scale & Efficiency

Completion of the transaction creates a unified cannabis industry leader with a combined funded capacity of more than 570,000 kg of high-quality cannabis per year, to be delivered via nine facilities in Canada and two in Europe. Combining MedReleaf's industry-leading cultivation yields and Aurora's ultra low-cost Sky Class production facilities, which management believes will result in production costs well below $1 per gram, position the Company to deliver high-margin growth in all domestic and international market segments.

With the addition of MedReleaf's three Ontario-based facilities and a combined Ontario workforce of more than 400 people, the transaction now makes Aurora one of the largest cannabis companies in Ontario, the country's largest by population.  

Science and R&D

Aurora and MedReleaf share a strong belief in the importance of science to drive innovations in the form of marketable IP and new value-added products, with the objective of creating a differentiated and broadly diversified high-margin operator. The combined science and R&D teams, including approximately 40 PhDs and MScs will be active in research projects throughout the global cannabis industry.

Both companies maintain a strong commitment to clinical trials and medical studies, which has led to increased visibility and brand recognition with the domestic and international medical communities, leading to above-average prescription rates and referrals. In addition to studies completed and in progress at Aurora and CanniMed, MedReleaf's completed and in-progress initiatives include a Pharmacokinetics trial, a Phase II cancer pain trial, a Phase III epilepsy trial, an observational chronic pain study, and a study to assess the potential correlation between genetic signatures and cannabis efficacy.

Furthermore, each company has developed considerable expertise in cannabis plant genetics, enabling the development of new cultivars with specific traits for a variety of domestic and international markets, as well as strains optimized for automated cultivation.

In addition to in-house efforts, ongoing innovation will continue to be driven through the identification and integration of high-potential, third-party technologies. Aurora's strong execution record in this regard is based on the close collaboration between its R&D and opportunities teams. This function will be further strengthened through the integration of MedReleaf's business development efforts, adding a robust pipeline of promising opportunities.

International Markets

With MedReleaf's Markham facility, the Company now has two GMP certified facilities, increasing product availability for higher-margin international markets featuring strong barriers to entry, such as Germany and Italy. Leveraging the distribution and operational capabilities of Aurora's wholly owned EU subsidiary Pedanios, as well as that of other distribution partners secured by both companies, the Company is actively targeting market entry into multiple new EU and other international jurisdictions.

Brands

In support of the upcoming legalization of the Canadian adult consumer use market, Aurora and MedReleaf have launched a portfolio of premium consumer and wellness brands. These brands, which include San Rafael '71, Woodstock, and AltaVie were developed based on detailed consumer and marketplace insights and advanced analytical frameworks. The combined entity has multiple provincial-level supply agreements in place, and is actively pursuing further agreements.

The combined companies' are positioned well for growth through an expansive network of non-governmental distribution partners, such as Shoppers Drug Market, Pharmasave and Pharmachoice. Furthermore, through investees such as Alcanna and Choom Holdings, the Company anticipates further expanding its domestic market reach.

Management and Board Changes

Following today's closing of the Arrangement Agreement, Neil Closner has stepped down as CEO of MedReleaf and during the integration process, Allan Cleiren, Aurora's Chief Operating Officer, will assume the role of interim-CEO of MedReleaf. In addition, Lloyd Segal, Deborah Rosati and Neil Closner have stepped down from MedReleaf's Board, while Norma Beauchamp and Ronald Funk have been appointed to Aurora's Board of Directors. Steve Dobler, President of Aurora, has been appointed to MedReleaf's Board of Directors.

Mr. Booth added, "On behalf of Aurora and MedReleaf, I'd like to thank Neil and MedReleaf's Board for their incredible hard work, dedication and support for this transaction. Under their guidance, MedReleaf has matured into a world-class medical grade cannabis organization."