Aurora Cannabis appears to have among its plans to strengthen its premium marijuana strategy by acquiring TerraFarma, the parent company of Thrive Cannabis. The deal announced yesterday will see Thrive merge with a subsidiary of Aurora, acquiring all of the issued and outstanding shares of TerraFarma in exchange for $38 million in cash and Aurora stock.
Dubbed “Project Willow,” the idea is intended to help Aurora double its craft and premium products so that the company will be able to reach profitability in the first half of its 2023 fiscal year. In addition, the announcement also stated that Thrive will be eligible to receive a total of up to $20 million in cash, stock, or both if it achieves revenue targets during the next two years after the transaction is completed.
Although this is an already established goal, Aurora CEO Miguel Martin made it clear that the transaction is really about making the most of the talent demonstrated by Thrive’s people. “Brands are moving too fast. Consumers are moving too fast,” Martin said. “The only thing that’s really consistent right now is really good people and Thrive has that in abundance.”
Thrive, founded four years ago and based in Simcoe, Ontario, is known for its handcrafted cannabis products that meet any quality requirement. Its products range from dried flowers to concentrates and sublingual strips sold under the Greybeard Cannabis Co. and Being Cannabis brands. The company was the first licensed producer in Ontario to open an on-farm cannabis store, where marijuana products are sold on-site where they are manufactured.
The decision to make the sale, according to Thrive, comes after spending nearly a year getting to know Aurora and its vision more fully. The company’s intention was to ensure that no deal would jeopardize its various brands and its strong relationship with its extensive customer base.
“We are not selling out,” said Geoff Hoover, CEO of Thrive. “This gives us the opportunity to increase brand awareness, to bring new products to market to reach consumers we’ve never been able to reach before.”
Aurora said the transaction will provide immediate positive adjusted EBITDA and is expected to close during the company’s fourth fiscal quarter of this year, but is subject to customary closing conditions.