Power polls that were snapped in the late July wind storm stand in front of the Aurora Sun greenhouse in northwest Medicine Hat on Wednesday, Sept. 21, 2022. The company says that has terminated a potential sale of the incomplete building this week after the unnamed buyer failed to meet conditions of the sale. -- News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
The sale of the Aurora Sun greenhouse in Medicine Hat has collapsed, the cannabis company announced in its year-end financial statements.
Aurora Cannabis spent $250-million on the 1.6 million-square-foot greenhouse and processing facility in the Box Springs Business Park, but halted construction in 2020 when demand for legalized cannabis failed to meet expectations.
That was a blow to local economic observers and the city – which waived $6 million in development fees to attract the plant and up to 400 jobs – but last spring Aurora stated talks to sell the facility were nearing conclusion.
That changed Tuesday when Aurora said the unnamed potential buyer had failed to fulfil closing conditions, and the company rescinded its offer on Sept. 19 – the day before annual financial statements were released.
“Aurora will continue to evaluate alternative uses for the Aurora Sun facility,” stated the company’s management circular discussing the year which ended June 30, 2022.
Negotiations were revealed in May when filings stated the Sun sale could be worth C$46.8 million for the company, but involved few details.
At about the same time as the revelation, Aurora also announced it would shutter operations at its flagship greenhouse near Edmonton – the 800,000 square-foot “Aurora Sky” – as the latest production site shutdown.
In late August, Aurora announced it had completed a deal to take over Bevo Farms, a food and ornamental plant promulgation company. It will buy and operate Aurora Sky in a deal that closes this month to fulfil contracts with other greenhouses and big-box retailers.
Aurora CEO Miguel Martin said on Tuesday the arrangement, and potential upside, “make that play significantly a better advantage for Aurora than just selling (Sky) for pennies on the dollar.”
“(Overall) the combination of the tax benefit, the repurposing, the changes in the tax designation and the upside that it presents very quickly for Bevo was a way better deal than being caught up with everybody else trying to sell cannabis assets,” he said.
Officials with the City of Medicine Hat stated in May when sales talks were made public they were encouraged the building could be completed and operation may begin. The package which brought Aurora to the Hat also included a large electricity supply contract involving a take-or-pay clause, which the city says Aurora has honoured.
City officials also stated in a 2021 economic development mid-year report that tax revenue from the improvements on the 70-acre site in northwest Medicine Hat would by 2025 equal or surpass the $5.7-million development fee break offered in 2018 before construction.
