Aurora Cannabis to Purchase Thrive Cannabis Owner TerraPharma in $38 Million Deal

2.2 min readPublished On: March 23rd, 2022By

TORONTO – Aurora Cannabis Inc. has acquired TerraFarma Inc., the parent company of Thrive Cannabis, to enhance Aurora’s premium cannabis brand strategy.

Thrive will merge with Aurora, which will buy all of TerraFarma’s issued and existing shares in return for $38 million in cash and Aurora shares, according to the agreement announced Tuesday. If Thrive meets revenue targets within two years of the acquisition, it will be eligible for up to $20 million in stock, cash, or both.

The merger, dubbed Project Willow, would allow Aurora to double emphasis on premium and artisan brands in order to reach profitability by the first half of fiscal 2023, but Aurora’s CEO, Miguel Martin, said the agreement is truly about leveraging Thrive’s brilliant workforce.

The Simcoe, Ontario-based company The Greybeard Cannabis Co. and Being Cannabis brands are known for their premium craft cannabis products, which include concentrates, dried flower, and sublingual strips.

The company was also the first licensed producer in Ontario to launch a farmgate cannabis shop, where cannabis is sold where it’s grown.

After nine months of getting to know Aurora and its objectives, Thrive said it decided to sell. Thrive wants to make sure that any purchase wouldn’t jeopardize its brands or its strong consumer relationships.

“We’re not going to sell out,” Thrive CEO Geoff Hoover stated. “This allows us to raise brand awareness, introduce new items to the market, and reach consumers we could never reach before.”

Hoover’s staff will play a prominent part in Thrive’s operations, and he will head Aurora’s recreational business, which includes the San Rafael, Drift, and Whistler Cannabis brands, unlike typical deals between large licensed producers and craft producers.

Since recreational cannabis was legalized in Canada in 2018, premium brands like Thrive’s Greybeard have become increasingly appealing, as producers anticipated reducing costs to better compete with the illicit market would yield profitability.

Because of their higher price points and loyal consumer bases, premium and craft products are considered as a way to profitably grow their business in an increasingly competitive marketplace.

Craft flower sales grew by 158 percent last year, according to a research released Nov. 4 by Deloitte Canada, BDSA, and Hifyre, despite prices that were 16 to 41 percent higher than non-craft offers.

Aurora hasn’t added to its empire since purchasing Reliva LLC in May 2020, but the business has been consolidating in recent years. Competitors Tilray Inc. and Aphria Inc. merged, Hexo Corp. bought Zenabis Global Inc., Redecan and 48North Corp.

Supreme Cannabis, Ace Valley Cannabis, and Wana Brands were all purchased by Canopy Growth Corp.

Aurora expects the purchase to generate immediate positive adjusted EBITDA and to finalize in the fourth quarter of this year.

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Newsteam at Highly Capitalized are some of the most experienced writers in cannabis and psychedelics business & finance. We cover capital markets, finance, branding, marketing and everything important in between. Most of all, we follow the money.

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