Alcanna Inc. (TSX:CLIQ) is set to open retail cannabis stores under the Aurora Cannabis Inc. (TSX:ACB) brand name
SmallCapPower | August 10, 2018: Aurora Cannabis Inc. (TSX:ACB) and Alcanna Inc. (TSX:CLIQ) Wednesday announced an exclusive licensing agreement under which Alcanna has rights to open retail cannabis stores under the brand name Aurora Cannabis pan-Canada. Alcanna is the biggest private sector liquor retailer in Canada. The structure and technical knowhow of Alcanna in the retail space would complement Aurora to become one of the world’s leading cannabis companies.
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Aurora Cannabis previously announced in February, its strategic investment in Alcanna with a view to establishing a leading brand of cannabis retail outlets. This progressive partnership combines Aurora’s brand leadership, high-quality products, customer care and scientific innovations with Alcanna’s well-established retailing infrastructure and expertise. Over the last 25 years, Alcanna has 229 retail outlets in Western Canada and Alaska. Alcanna has established itself as a responsible retail brand for controlled substances under a strict regulatory environment.
Alcanna will build, own and operate the new cannabis stores leveraging its experience and expertise in the retail space. The stores will operate under the Aurora name, providing immediate brand recognition based on the company’s reputation as a producer of high-quality cannabis products. Alcanna is currently converting several of its existing liquor stores into cannabis retail outlets.
Subject to approvals from the Canadian government, Alcanna is well prepared to open a large number of retail stores in any province in Canada. In Alberta, Alcanna anticipates opening 37 stores, starting October 17, 2018, the maximum number permitted to a single operator under provincial regulations in Year One of legalized adult consumer use. Alcanna will retain Aurora Cannabis through CanvasRx, CanniMed and MedReleaf, which have deep experience working with cannabis users, and unparalleled data regarding efficacy and customer experience to assist in training its in-store associates know as Category Specialists.
Aurora Cannabis CEO Terry Booth said, “This Agreement between Aurora and Alcanna, combining physical presence, retail experience, capacity and expertise with our brand strength, product know-how and deep data, creates a significant competitive advantage that will allow for the rapid development of a robust retail network in Alberta, and any other jurisdiction that permits private retail of cannabis for adult consumer use. We have collaborated on store design and layout to ensure the ultimate customer-focused experience, based on a broad selection of products that we anticipate will resonate strongly with the adult consumer use market.”
Aurora Cannabis trades at a market capitalization of $5.79 billion with price to book multiple of 2.52x, while Alcanna trades at market capitalization of $371.35 million with price to book multiple of 1.15x.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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