Aurora Cannabis Inc. (TSX:ACB) entered into a binding letter agreement to acquire the remaining 48.61% stake in Hempco Food and Fiber Inc. (TSXV:HEMP) for CAD 29.7 million on April 12, 2019. Aurora Cannabis Inc. entered into a definitive arrangement agreement to acquire Hempco Food and Fiber Inc. on June 26, 2019. As part of consideration, Aurora has agreed to pay $1.04 (CAD 1.4) per Hempco Share, payable in common shares of Aurora reflecting a valuation of approximately CAD 63.4 million on a fully diluted basis. Hempco's outstanding options and warrants will be adjusted in accordance with their terms such that the number of Aurora Shares received upon exercise and the exercise price will reflect the exchange ratio. Aurora already owns 31.87 million shares of Hempco which constitute approximately 51.4% of the outstanding shares. Under the terms of the agreement, Aurora will, upon completion of the transaction, issue approximately 0.08659 Aurora Shares in exchange for each Hempco Share (the "Exchange Ratio") not already owned by Aurora. Hempco shareholders will not receive any cash in the transaction.

On completion of the transaction, Hempco will become a wholly owned subsidiary of Aurora and Hempco's shares will be de-listed from the TSX Venture Exchange. If this agreement is terminated by Hempco, Aurora shall will pay an amount of CAD 0.2 million. Until closing, Hempco will continue to be managed by the Hempco Board and John Ross, Hempco's Chief Financial Officer and interim Chief Executive Officer. Upon completion of the transaction, all of the members of the Hempco Board will resign and the current management team of Aurora will manage Hempco after completion of the transaction.

Transaction is subject to approval of Board of Directors of Hempco. Transaction is expected to be effected by way of a court approved plan of arrangement under the Business Corporations Act (British Columbia) or by way of an alternate structure as determined by Aurora and Hempco based upon tax, securities and corporate law and other relevant considerations. Transaction will require shareholder approval from two-thirds of the votes cast by the holders of Hempco Shares at a shareholder meeting to be held to consider the transaction and lock-up agreements. Transaction will be subject to applicable regulatory including approval of the Toronto Stock Exchange and New York Stock Exchange (in respect of Aurora) and the TSX Venture Exchange (in respect of Hempco) and court approvals, third party approvals, Dissent Rights have not been exercised with respect to more than 5% of the issued and outstanding Hempco shares, each of the Directors and officers of Hempco other than the directors and officers agreed to in writing by Aurora shall have resigned and the satisfaction of other customary conditions. The special meeting of Hempco shareholders to approve the transaction will be held on August 13, 2019. Hempco formed a special committee of the Board of Directors. Hempco's Board of Directors has determined that the transaction is in the best interest of shareholders, and based on advice from its financial advisor and the recommendation of the special committee of the Board of Directors, it has unanimously approved the transaction. Hempco's Board of Directors recommends shareholders to vote in favor of the transaction. The parties expect to execute a Definitive Agreement on or before May 15, 2019. As of August 13, 2019, transaction was approved by the shareholders of Hempco Food and Fiber Inc. Transaction is expected to be completed in the second quarter of 2019. As of June 28, 2019, transaction is expected to close in the third quarter of 2019. As of July 15, 2019, the transaction is expected to close by the end of August 2019.

Fort Capital Corporation provided fairness opinion to Hempco Independent Committee and the Hempco Board. Arman Farahani of McMillan LLP acted as legal advisor for Aurora Cannabis Inc. Ethan Minsky of Clark Wilson LLP acted as legal advisor for Hempco Food and Fiber Inc. Computershare Investor Services acted as depositary and Laurel Hill Advisory Group acted as proxy solicitor to Hempco.