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Aurora Cannabis Inc. sold its stake in The Green Organic Dutchman Holdings Ltd. after the markets closed on Tuesday, ending the relationship between the two cannabis companies.
The $ 86.5 million sale, conducted as a trading bloc, was completed at $ 3 per share – a 14.5 percent discount on the Green Organic closing price of $ 3.51 on Tuesday.
Aurora was one of TGOD's first supporters, investing $ 55 million in the Mississauga-based manufacturer in January 2018 and another $ 23 million in the company when it was released in May 2018.
The two companies, however, have been separating since September 2018, when Aurora's general manager, Cam Battley, resigned from the TGOD board of directors without any explanation from either company.
Shortly thereafter, Aurora decided not to exercise TGOD warrants which would have given it an additional share of 8% -10% in the company. The warrants were exercisable with a 10% discount on the average 10-day TGOD share price.
Since then Aurora has consistently abandoned its position in TGOD, selling approximately $ 35 million of TGOD shares in October 2018, at prices ranging between $ 5.02 and $ 5.87 per share. In January 2019 he sold several tranches of TGOD shares at prices starting at $ 2.47 per share.
Despite the success of collecting large sums of money, TGOD struggled at the operational level, with construction delays at its Hamilton site due to the conflict with the local government and poor sales on the Canadian recreational or medical cannabis markets.
TGOD recorded a loss of $ 16.6 million on $ 2.9 million in sales in its most recent quarter. All his income came from a branch in Poland that sells hemp; the company has not yet reported cannabis sales in Canada.
"Aurora was an excellent partner during the development phase of TGOD; their investment was crucial to our success," said TGOD spokesman Sebastien Bouchard.
"The report added extraordinary value in multiple areas of collaboration, including the design and construction of our Canadian facilities. This is the next step in the relationship with the maturity of both companies and the evolution of our respective strategies, also providing TGOD with new institutional investors, "said Bouchard.
Tuesday morning, TGOD announced that its second greenhouse in Hamilton has received a cultivation license from Health Canada.
A spokesman for Aurora declined to comment on the agreement.