Canadian medical cannabis producer Aphria Inc. has signed a letter of intent to acquire British Columbia’s Broken Coast Cannabis Inc. in a deal worth about C$230 million. The deal, subject to customary closing adjustments, will be paid in C$10 million cash and the remainder in Aphria shares.
The deal will see Aphria become the largest Canadian Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) medical cannabis producer and is estimated to produce 110,000 kilograms (242,508.488) pounds of cannabis per year at an average cost of less than C$2.00 per gram. Broken Coast boasts a genetic library with more than 1,000 seeds that can be commercialized.
“Adding one of Canada’s most sought after premium brands represents a major triumph for Aphria and our shareholders and firmly establishes our position as a Canadian leader in premium indoor cannabis production. Broken Coast has proven that you can grow premium quality cannabis, charge a reasonable price and earn a profit all at the same time. Our two companies are closely aligned, particularly as it relates to our relentless focus on production costs and profitability.” – Vic Neufeld, Aphria CEO, in a press release
The deal gives Aphria a foothold on both Canadian coasts as the nation moves forward with broad cannabis legalization.
“Broken Coast is committed to providing a premium and affordable product to its patient base while staying true to BC’s iconic cannabis brand and culture. Joining the Aphria team will open doors to keep innovating with our unique production process and cannabis genetics. While we are joining a talented large-scale greenhouse operator, Broken Coast will retain a high level of independence and our existing management and production teams will continue to drive our corporate strategy and produce incredible cannabis products.” – Roberto Bresciani, director and co-founder of Broken Coast, in a statement
The deal is expected to close by Jan. 31.
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