Aurora Cannabis Inc. (TSX: ACB) (OTCQB: ACBFF) announced this morning that the company has secured a $200-250 million debt facility with the Bank of Montreal. This marks the the first non-dilutive financing deal from a Tier-1 financial institution on this scale in Canada. The announcement comes less than a week after Canada announced the passing of the Cannabis Act, which legalized recreational throughout the country.
The financing will be allocated to expand Aurora’s production facilities such as Aurora Sky, Aurora Mountain, and Aurora Vie. Aurora Sky is located at Edmonton International Airport and is projected to produce 100,000 kg of high-quality dried cannabis per year. The loans from the Bank of Montreal are set to be paid back, without penalties, at the company’s discretion.
With the new legislation coming into effect this October the expectation is that more top Banks in Canada will become involved in the cannabis and industrial hemp industry. The financing be to delivered to Aurora will allow the company to expand its operations without diluting the company’s shares.
Closing of the debt facility is subject to completion of final due diligence, negotiation of definitive documentation, and satisfaction of conditions precedent customary to a financing of this nature.