Mr. Miguel Martin reports

AURORA CANNABIS ACQUIRES MEDRELEAF AUSTRALIA

A wholly owned subsidiary of Aurora Cannabis Inc. has acquired the remaining approximately 90-per-cent equity interest of Indica Industries Pty. Ltd. (MedReleaf Australia) that Aurora did not previously own, at an enterprise value of $50-million (Australian), subject to customary adjustments. Aurora paid $9.45-million (Australian) in cash with the balance of the purchase price satisfied by the issuance of common shares of Aurora.

MedReleaf Australia is a leading distributor of medical cannabis products and holds the No. 2 position in the Australian medical cannabis market. This market is currently estimated to be worth approximately $400-million (Australian) and has quickly become one of the largest nationally legal global medical cannabis markets outside of Canada.

The medical cannabis market in Australia is characterized by a clinician-led traditional pharma-like product distribution model that aligns with Aurora's operational success in other key global medical cannabis markets such as Germany. Since first partnering with MedReleaf Australia in 2017, Aurora has actively contributed to the region's recent growth, leveraging the company's pharmaceutical grade cultivation and global approach to product innovation. The transaction is expected to provide a meaningful platform for Aurora to continue growing its leading global medical cannabis position in Australia and other Asia-Pacific countries.

Management commentary

"The acquisition of MedReleaf Australia represents a strategic milestone in Aurora's global cannabis leadership, demonstrating our commitment to investing in markets that offer opportunities for sustainable and profitable growth," said Miguel Martin, chief executive officer of Aurora. "We are excited to solidify our position in this rapidly growing market and the opportunity this transaction presents to us in accelerating our plans to deliver positive free cash flow in calendar 2024," added Mr. Martin.

"We're proud to have built one of Australia's leading medical cannabis companies, thanks to our main supplier Aurora, dedicated investors and dynamic team. Through our vision, we've connected clinicians with patients nationwide, positively impacting thousands of lives. This transaction marks an important step for MedReleaf Australia's ongoing growth, as we believe medical cannabis is now mainstream medicine, and we're grateful to be part of that story," said Russell Harding and Nathan Davis, co-founders of MedReleaf Australia.

Strategic rationale

Supports Aurora's global cannabis leadership:  Strengthens Aurora's presence in Australia, a region experiencing significant growth in medical cannabis adoption, which further solidifies its position as a leading global cannabis company.

Leverages Aurora's strength in providing pharmaceutical grade cannabis:  The Australian model is medical focused and clinician led, consistent with other markets where Aurora has achieved success. The acquisition demonstrates the company's deliberate approach to pursuing market growth that more closely mirrors typical pharmaceutical industries.

Expands margins of Australian business model:  The transaction is expected to improve revenue contributions and gross margins to further align the company's Australian business with its other key profitable international markets, most notably Germany, Poland and the United Kingdom.

Supports Aurora's path to profitability:  MedReleaf Australia generated trailing 12-month net revenue of $40-million (Australian) (as of Dec. 31, 2023) and was adjusted earnings before interest, taxes, depreciation and amortization and operating cash flow positive. The company expects this transaction to be immediately accretive and will support and accelerate Aurora's plan to achieve positive free cash flow in calendar 2024.

Transaction details

Aurora, through its wholly owned subsidiary, purchased the remaining approximately 90-per-cent equity interest of MedReleaf Australia at a total enterprise value of $50-million (Australian) subject to customary adjustments. As consideration, Aurora (i) issued the selling shareholders an aggregate of approximately 69.5 million Aurora shares; and (ii) paid the selling shareholders $9.45-million (Australian) in cash, subject to customary adjustments postclosing. Approximately 10 per cent of the consideration will be held in escrow to ensure certain obligations of the selling shareholders.

About Aurora Cannabis Inc.

Aurora is opening the world to cannabis, serving both the medical and consumer markets. Headquartered in Edmonton, Alta., Aurora is a pioneer in global cannabis, dedicated to helping people improve their lives. The company's adult-use brand portfolio includes Aurora Drift, San Rafael '71, Daily Special, Tasty's, Being and Greybeard. Medical cannabis brands include MedReleaf, CanniMed, Aurora and Whistler Medical Marijuana Co., as well as international brands, Pedanios, Bidiol and CraftPlant. Aurora also has a controlling interest in Bevo Farms Ltd., North America's leading supplier of propagated agricultural plants. Driven by science and innovation, and with a focus on high-quality cannabis products, Aurora's brands continue to break through as industry leaders in the medical, performance, wellness and adult recreational markets wherever they are launched. Aurora carries out its operations in compliance with all applicable laws in the countries in which it operates.

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