Aphria Secures Immediate Access to Eight-Fold Production Increase, With Fully Built-Out Capacity of 1,000,000 Square Feet, Supporting $700 Million in Annualized Revenue
April 7, 2016
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Leamington, Ontario – April 7, 2016 – Aphria Inc. (“Aphria” or the “Company”) (TSX-V: APH) is pleased to announce that it has entered into a definitive Purchase Agreement to acquire approximately 360,000 square feet of production space, located on 36 acres of land for total consideration of $6.5 million. Based on new growing technologies available to the Company, the acquired greenhouse campus, once audit approved, is capable of generating approximately $250 million in sales annually. The vacant lands acquired allows Aphria to expand its greenhouse footprint by an incremental 640,000 square feet of growing space, supporting an additional $450 million in annualized sales. The purchase price is comprised of a cash payment on closing of $3.25 million and a vendor take-back mortgage of $3.25 million. The vendor take-back mortgage has a 5 year term and bears annual interest at 6.75%. The
Company anticipates closing the transaction on June 30, 2016. The Purchase Agreement is with Cacciavillani and F.M. Farms Ltd., operating as CF Greenhouses, (currently Aphria’s landlord), a company having common ownership with a Co-Founder. This transaction is considered non-arms length due to the Co-Founder’s ownership position in Aphria. As a condition of the acquisition, the Company will terminate its existing lease and support services agreement for the 43,000 square feet of greenhouse space it currently utilizes and other infrastructure providing ancillary services.
“As we continue to exceed our revenue and profitability expectations, it is essential to secure both nearterm and long-term capacity growth on our existing site”, says Vic Neufeld, Chief Executive Officer. “The assets purchased lay the foundation for Aphria to remain a leader as oil extraction comes on-stream and recreational market conditions become legislated.”
The Purchase Agreement remains subject to regulatory approvals, including with the TSX Venture Exchange.
Aphria Inc., a company continued under the laws of the Province of Ontario and based in Leamington, Ontario, is in the business of producing, supplying and selling medical marijuana pursuant to the Marihuana for Medical Purposes Regulations (the “MMPR”). Under the MMPR, Health Canada is responsible for the oversight of commercial medical marijuana growers such as Aphria. Aphria’s common shares are listed on the TSX Venture Exchange under the ticker symbol “APH”. For more information, visit aphriainc.com.
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President & CEO
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forwardlooking statements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “believe”, “intend” or the negative of these terms and similar expressions. Forward-looking statements in this news release include, but are not limited to, statements with respect to internal expectations, estimated margins, expectations for future growing capacity, the completion of the land acquisition with CF Greenhouses, the completion of the capital project, any commentary related to the legalization of marijuana and the timing related thereto, expectations of Health Canada approvals and expectations with respect to future production costs. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving medical marijuana; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the medical marijuana industry in Canada generally, income tax and regulatory matters; the ability of Aphria to implement its business strategies; competition; crop failure; currency and interest rate fluctuations and other risks.
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
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