Aurora Cannabis Inc. (TSX:ACB) subscribed for a significant piece of The Green Organic Dutchman Holdings Ltd.’s (TSX:TGOD) IPO
SmallCapPower | May 8, 2018: The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) announced on May 2, 2018, that it has successfully completed an initial public offering of 31,510,000 units at a price of $3.65 per unit for total gross proceeds of $115.01 million. Each unit of the Company’s offering comprises one common share and one-half of one common share purchase warrant.
Each warrant is exercisable into one common share at a price of $7.00 for a period of two years from the issue, subject to the condition that an acceleration right whereby Green Organic Dutchman Holdings may provide written notice to the registered holders of the warrants that the expiry time of the warrants shall be accelerated to a date which is 30 days after the date of such warrant acceleration notice, if, at any time, the volume-weighted average trading price for the common shares is equal to or greater than $9.00 for any 10 consecutive trading day period.
Aurora Cannabis Inc. (TSX:ACB) has elected to exercise its full participation right on a pro-rata basis.
Before the offering, Green Organic Dutchman Holdings entered into a strategic partnership with Aurora Cannabis through which Aurora made $55 million investment for a 17.5% stake in Green Organic Dutchman Holdings. There is an option for Aurora Cannabis to increase its ownership to more than 50% if Green Organic Dutchman Holdings meets certain operational and financial milestones. Aurora Cannabis has agreed to purchase 20% of Green Organic Dutchman Holdings Ltd.’s organic cannabis product as part of the financing agreement.
The Green Organic Dutchman Holdings is a research & development company with a license to cultivate medical cannabis under the Access to Cannabis for Medical Purposes Regulations (ACMPR). The organic medical cannabis producer has a funded capacity of 116,000 kg and is building 970,000 sq. ft. of cultivation facilities in Ontario and Quebec. Green Organic Dutchman Holdings Ltd.’s stock currently trades at a market capitalization of $724 million on the TSX. Green Organic Dutchman Holdings has raised approximately $270 million to date.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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