Another day, another Aurora Cannabis acquisition. The cannabis giant announced today that is has acquired Europe's largest certified organic hemp producers and distributors—sister companies Agropro UAB and Borela UAB.
What will the market reaction be to the new acquisition?
Aurora Shares
Last week, Aurora (TSX:ACB) shares were struggling. As of Monday, however, shares began to climb again. I wonder will this acquisition spur on further gains? It's just announced, so we will have to wait and see!
The acquisition is a larger one for the company. Agropro is a hemp seed contracting and processing company. Borela is a processor and distributor of organic hulled hemp seeds, hemp seed protein, hemp flour, and hemp seed oil.
The companies have 4,000 acres between them with the capacity to yield an average 1 million kilograms of organic hemp annually. They also have contracts to expand across Lithuania, Estonia, Latvia, and Poland, with an additional 7,400 acres.
Hemp and CBD
The two companies focus exclusively on the production of hemp seed-based products, and as a result, CBD containing hemp biomass goes to waste on the fields.
Enter Aurora.
The cannabis behemoth "intends to extract, refine and productize the organic hemp biomass into a wide range of organic CBD-based wellness products to generate new and significant revenue streams in this burgeoning market."
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CBD-based products are increasingly being used and recognized for their health benefits—this is an area Aurora is already developing and executing on, across five continents.
But Back to Hemp
Aside from the CBD market potential, hemp as a stand-alone substance is a valuable food supplement for the ever-popular health food markets. Aurora already owns a majority stake in Hempco, through which it is already executing on relative opportunities. Aurora will now merge Agropro's organic supply and distribution with Hempco's, and the result should be even greater market access and growth of premium hemp-based products.
I wonder what will be the next Aurora Cannabis acquisition?
Featured Image: Depositphotos/© depositedhar
