Aurora Cannabis Divests The Green Organic Dutchman Stake


Aurora Cannabis (NYSE: ACB) has unloaded one particular of its assets. The organization announced in a press release that it has totally sold out of its stake in peer marijuana stock The Green Organic Dutchman Holdings (OTC: TGODF).

All told, Aurora sold just more than 28.eight million shares of TGOD. The value was three Canadian dollars per share, bringing in a total of CA$86.five million. Aurora mentioned this provides it a roughly 50% internal price of return on the holding, which it acquired in early 2018.

Marijuana leaf atop a $100 bill.

Image supply: Getty Pictures.

The organization did not specify how, or to whom, it sold the shares. That CA$three per share converts roughly to the level of the stock’s newest U.S. closing value of $two.24. Like quite a few marijuana stocks, TGOD’s value has been choppy of late. It is up practically 24% year to date, but has slipped by nearly five% more than the previous month.

That practically 29-million-share position gave Aurora a 10.five% stake in its peer. Even though the sale suggests Aurora no longer has any equity in The Green Organic Dutchman, it does possess warrants that enable it to potentially obtain practically 16.7 million shares of stock in the organization.

Aurora mentioned its choice to unload the stake was due to a far more current buy. “When we acquired Whistler Healthcare Marijuana Corporation… our interest in TGOD became significantly less vital to our core method,” the organization stated in the press release announcing the sale.

“Our return on our TGOD investment is important and will add non-dilutive capital and additional improve our method to stay a dominant force in the international cannabis market,” Aurora added.

TGOD was one particular of a quantity of cannabis firms in which Aurora holds a stake. As with quite a few of the far more prominent enterprises in the sector, Aurora is an active and eager purchaser of complementary assets.

The Green Organic Dutchman is a cannabis producer and seller primarily based in Canada. Equivalent to other marijuana firms, it has enjoyed robust prime-line development lately, while it has but to post a net profit. In the company’s Q2, it managed to develop its income by 20% on a quarter-more than-quarter basis. It presently trades only on the more than-the-counter industry in the U.S., while it not too long ago indicated an ambition to get a Nasdaq listing. 

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Eric Volkman has no position in any of the stocks described. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.

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