Aurora signs deal to repurpose Leduc plant

By COLLIN GALLANT on August 26, 2022.

cgallant@medicinehatnews.com@CollinGallant

Aurora Cannabis has found a purpose for one of the massive greenhouses it has shelved in Alberta, but news is still outstanding on the sale of Aurora Sun Greenhouse in Medicine Hat.

Edmonton-based Aurora announced the deal Thursday to buy a controlling interest in Bevo Agtech Inc., a supplier of vegetable seedlings and flowers, in a deal toward repurposing its Aurora Sky facility near Leduc.

Bevo is a major promulgator and wholesale supplier of seedlings to vegetable and floral to greenhouse growers. The Langley, B.C.-based company was mentioned several times to the News by industry observers as a potentially interested buyer of the Aurora Sun facility in Medicine Hat.

Leo Benne, president of Bevo, said his company’s operations could take full advantage of the modern greenhouse in Leduc to supply the entire greenhouse industry in the province.

“Since inception, Bevo has taken great pride in utilizing state-of-the-art technology to become a leading plant propagator in North America,” he said. “We are delighted to join forces with Aurora to pursue our high growth strategy, starting with our move into Alberta which allows us to significantly expand Bevo’s addressable market.”

The local Aurora plant saw construction halted in late 2020 as market demand fell well short of expectations for the emerging cannabis sector.

Aurora Sky was closed this year in another massive production restructuring by the pot producer. At that point, company officials told an investors conference call they were not worried about interest in the million-square-foot growing space, potentially from agri-food interests.

At the same time, filings revealed Aurora was in the late stages of a deal to sell the unfinished Aurora Sun facility for $36 million to an unnamed buyer. Details of the transaction’s completion were said to be coming in the company’s fourth-quarter earnings at release, expected in late September.

Under the deal announced Thursday, the cannabis company will acquire a 50.1 per cent stake in Bevo for $45 million, plus up to an additional $12 million which is conditional on Bevo achieving certain financial milestones at its Site One facility in Langley.

Bevo will acquire the Aurora Sky facility in Edmonton and pay up to $25 million based on the achievement of certain financial milestones.

Aurora chief executive Miguel Martin says the investment and collaboration will drive significant shareholder value and synergies for both companies.

“We expect this investment and collaboration between industry leaders will drive significant shareholder value and synergies for both parties,” said Martin in a joint release. “We are also excited about Bevo repurposing Aurora Sky and the potential to expand the scale and scope of their business and saving significant costs previously expected in connection with the wind down and sale of the facility.”

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