Mr. Terry Booth reports

AURORA CANNABIS TO BE CORNERSTONE INVESTOR IN THE GREEN ORGANIC DUTCHMAN AND SIGNS SUPPLY AGREEMENT FOR ORGANIC CANNABIS

Aurora Cannabis Inc. and the Green Organic Dutchman Holdings Ltd. (TGOD) (privately held) have completed a definitive agreement covering a strategic investment in TGOD by Aurora, as well as a supply contract.

Under the terms of the agreement, which the companies anticipate completing in the coming weeks, Aurora will acquire, through a private placement, a 17.62-per-cent interest on a non-diluted basis. The placement consists of 33,333,334 units, priced at $1.65 per unit, for gross proceeds of $55-million. Each unit consists of one common share and one-half of one common share purchase warrant, exercisable at $3 per common share for a period of 36 months following closing of the offering.

Upon TGOD achieving certain corporate, operational, construction and financial milestones, as described below, Aurora shall have the option to incrementally increase its ownership interest in TGOD to 51 per cent. The completion of the transaction is subject to customary closing conditions, as well as the entrance into an investor rights agreement.

Supply contract

As part of the agreement, the companies shall enter into a supply contract, providing Aurora with the right to purchase up to 20 per cent of TGOD's annual production of organic cannabis from TGOD's Ancaster and Valleyfield facilities. Consequently, Aurora anticipates being able to procure in excess of 20,000 kilograms per annum of premium organic products once TGOD's Valleyfield and Ancaster facilities are completed and at full capacity. The supply contract provides Aurora with the right to purchase up to 33 per cent of TGOD's production at the two facilities if Aurora increases its ownership interest to 31 per cent.

ALPS-designed purpose-built cultivation facility

TGOD will be constructing an ultrahigh-technology greenhouse facility, similar to the Aurora Sky facility, at Valleyfield in Quebec, where TGOD owns a 75-acre property. The initial building permits for the project were received December, 2017. The facility, which has been designed by ALPS (Aurora Larssen Projects Inc.), Aurora's greenhouse design and consulting subsidiary. The facility will measure 820,000 square feet, making it one of the world's largest purpose-built cannabis facilities. The new TGOD facility will benefit from the latest greenhouse technology as implemented at Aurora Sky. Furthermore, the facility will benefit from some of the lowest cost power in Canada at under four cents per kilowatt-hour. ALPS will assist TGOD with the start-up of its facility, leveraging Aurora's deep, industry-leading large-scale cannabis cultivation experience. The companies anticipate that this will significantly reduce the facility's commissioning timeline, and accelerate time to market. Management anticipates completion of the Valleyfield facility by the fourth calendar quarter of 2018.

As part of the partnership, Aurora and ALPS will also provide additional services to TGOD on the completion and commissioning of its Ancaster facility, which is anticipated for the fourth quarter of 2018. The facility, when completed, will measure 150,000 square foot in total, with a production capacity of 14,000 kg of premium organic cannabis per annum.

Working with its project alliance partners Eaton, and Hamilton Utility Corp., TGOD will be outsourcing its power, heating, cooling and carbon dioxide production, and associated capex (capital expenditure) costs, via a scalable six-megawatt cogeneration natural gas microgrid power plant. Management believes this is the best possible scenario for its power needs in Ancaster, one that is expected to ultimately reduce the cost per kwh from upward of 13 cents to an estimated net cost of 4.5 cents. As a result of this ultralow-cost power solution, along with the company's advanced automation control systems, TGOD has the potential to become one of the lowest-cost cannabis producers in Ontario and beyond.

Management commentary

"Aurora and TGOD are establishing a strategic partnership designed to provide significant, long-term benefits to both companies," said Terry Booth, chief executive officer. "Our objective, as a partner in TGOD's facility design, engineering and construction, and as a cornerstone investor, is to ensure TGOD's rapid market entry and commercial success. In return, Aurora will participate in TGOD's accelerated growth, and secure a ready supply of high-quality organic cannabis products to serve our Canadian and international customers. This agreement represents further validation of Aurora's position as the partner of choice in the cannabis sector, with our ability to deliver an unmatched combination of investment capital, technology, and expertise in cultivation and facility design and construction."

"Teaming up with Aurora, the industry's innovation leader, provides us with a stable, supportive shareholder, through whom we have access to best-in-class technologies and industry know-how, which we believe will significantly accelerate our time to market," said Csaba Reider, president of TGOD. "The supply agreement with Aurora validates our strategy to produce premium priced organic cannabis. With this significant cornerstone investor and customer, we will be able to leverage our deep consumer packaged goods and brand building experience, as well as Aurora's well-established brand recognition, to pursue rapid growth."

Rob Anderson, TGOD chief executive officer, added: "We are pleased to have Aurora as a strategic investor as they not only inject capital, but also provide industry-leading knowledge, products and services that will result in cost savings, enhanced yields and greater returns to TGOD. Furthermore, the agreement with ALPS will derisk both project execution and operations, due to their deep experience with high-technology greenhouse facilities, including Aurora Sky. Finally, the partnership provides us with access to additional services and genetics. Based on this strategic investment by Aurora, we will have raised approximately $160-million. Consequently, our 102,000 kg per year Valleyfield facility is now fully funded, positioning us well for our planned March, 2018, IPO."

Additional terms

Upon TGOD achieving certain milestones, Aurora has the right to increase its ownership interest in TGOD as follows ((2) through (4) can only be achieved upon TGOD becoming a public company). If exercised, Aurora has the right to purchase the shares from treasury at a 10-per-cent discount to the listed market price:

1. A number of common shares equal to 8 per cent of the common shares on a fully diluted basis three months after TGOD becomes listed on a stock exchange in Canada;
2. A number of common shares equal to 8 per cent of the common shares on a fully diluted basis if TGOD's Valleyfield, Que., project is permitted and construction of the Quebec project has reached 50-per-cent completion, as determined based on the construction budget of the Quebec project;
3. A number of common shares equal to 8 per cent of the common shares on a fully diluted basis upon the Valleyfield project receiving a cultivation licence;
4. A number of common shares equal to 12 per cent of the common shares on a fully diluted basis if TGOD meets certain revenue milestones.

About Aurora Cannabis Inc.

Aurora's wholly owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada's Access to Cannabis for Medical Purposes Regulations. The company operates a 55,200-square-foot, state-of-the-art production facility in Mountain View county, Alberta, known as Aurora Mountain, a second 40,000-square-foot high-technology production facility known as Aurora Vie in Pointe-Claire, Que., on Montreal's West Island and is currently constructing an 800,000-square-foot production facility, known as Aurora Sky, at the Edmonton International Airport, and is completing a fourth facility in Lachute, Que., through its wholly owned subsidiary Aurora Larssen Projects Ltd.

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