British Columbia based cannabis company Auxly has announced it is to receive $123mn of investment from UK tobacco company Imperial Brands.
Imperial Brands is to acquire 19.9% of Auxly, at a price of $0.81 per share. Consequently, Auxly is set to become the exclusive partner of Imperial Brands cannabis initiatives.
“This investment from Imperial Brands will enhance Auxly’s ability to continue to deliver on our business plans and accelerate our growth initiatives to expand our portfolio of branded derivative products,” said Hugo Alves, President of Auxly. “The timing is ideal as we prepare to bring our portfolio of innovative cannabis products to the Canadian market following the legalization of edibles, extracts and topicals later this year.”
As part of the deal, Auxly will license Imperial Brands’ vaping technology and its vaping business Nerudia.
Chuck Rifici, Chairman and CEO of Auxly, said: “Following its extensive evaluation of the Canadian cannabis market, we’re thrilled that Imperial Brands selected Auxly as its partner of choice due to the high calibre of our assets, people and capabilities. We are particularly excited to partner with Imperial Brands on current and future intellectual property and product development, starting with immediate access to its portfolio of vaping technologies and research and development capabilities.”
The transaction is expected to close in the third quarter of 2019, subject to the usual closing conditions including approval by the TSX Venture Exchange.