Auxly Cannabis to receive C$123M investment from Imperial Brands

Lead Office

Toronto

Value

123.00 Million CAD

On July 25, 2019, Auxly Cannabis Group announced that it has entered into an agreement with Imperial Brands PLC whereby Imperial Brands will invest C$123 million in Auxly by way of a three-year 4.00% convertible debenture which, if converted, would give Imperial Brands ownership of 19.9% of Auxly. Imperial Brands will also grant to Auxly global licenses in Imperial Brands' vaping technology and access to its vapor innovation business, Nerudia. In addition, Auxly will become Imperial Brands' exclusive partner for the future development, manufacture, commercialization, sale and distribution of cannabis products globally. Auxly plans to use the proceeds of the offering to continue to execute on its strategic objectives and capitalize on emerging growth opportunities.

Imperial Brands has the right to convert the debenture into Auxly shares at any point during the three-year term. If Imperial Brands does not convert the debenture, it will be repayable in full. The transaction is expected to close in the third quarter of 2019 and is subject to certain closing conditions and approval by the TSX Venture Exchange.

Auxly is a vertically integrated cannabis company based in Toronto with diverse operations across Canada and Uruguay.

Based in the United Kingdom, Imperial Brands manufactures, imports, markets and sells tobacco and tobacco-related products.

McCarthy Tétrault LLP is advising Auxly with a team led by Robert Richardson that includes Vincent Yip, Rami Chalabi, Matthew Harris and Michael Shahinian.

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