Tobacco Giant to Take 20% Stake in Canadian Cannabis Company

Auxly Cannabis Group Inc., an international cannabis company, announced that Imperial Brands PLC will invest approximately $123 million in Auxly by way of a convertible debenture and grant Auxly global licences to Imperial Brands’ vaping technology and access to its vapor innovation business, Nerudia.

“This investment from Imperial Brands will enhance Auxly’s ability to continue to deliver on our business plans and accelerate our growth initiatives to expand our portfolio of branded derivative products,” said Hugo Alves, President of Auxly. “The timing is ideal as we prepare to bring our portfolio of innovative cannabis products to the Canadian market following the legalization of edibles, extracts and topicals later this year.

This collaborative partnership accelerates the delivery of Auxly’s business plan ahead of significant regulatory change to the Canadian cannabis market, as Auxly continues to focus on the development of science-backed, innovative, branded derivative products. As part of the Transaction, Imperial Brands will grant Auxly global licences to its vaping technology for cannabis use and access to its vapor innovation business, Nerudia. The shared ability to rapidly innovate as the Canadian market evolves is key to future growth and Auxly will work closely with a small dedicated team from Nerudia in developing a portfolio of new and enhanced vapor products and brands.

Imperial Brands is an international fast-moving consumer goods company that continually evolves to embrace changing market dynamics and develop new consumer experiences. Its Next Generation Products prioritizes the fast-growing vapor segment with innovative products and proprietary technologies, including its pioneering brand, blu.

The Transaction is expected to close in the third quarter of 2019, subject to receipt of certain closing conditions and approval by the TSX Venture Exchange.