Skip to Main Content

Aurora Gets 19.9% of Choom

In the industry’s latest round of mergers and acquisitions, cannabis producer Aurora Cannabis now has a 19.9% stake in Choom, however, this wasn’t a purchase—it was to pay a debt. Choom recently announced that it had finished restructuring around $25.9 million in outstanding debt, most of which ($21.8 million) was owed to Aurora Cannabis, which took a chunk of the company rather than cold, hard cash.

The Agreement

According to a press release, as part of the agreement, the outstanding debt was converted into just over 79.7 million common shares, resulting in a nearly one-fifth stake in Choom, on top of a new $6 million convertible debenture to Aurora that matures at the end of 2024, accruing 7% interest per year until then.

Community Savings Inline Banner Jul 1-Aug 31 2021
Advertisement

Under the agreement, Aurora also has the right to elect two seats for Choom’s Board of Directors and participate in any securities offerings that Choom may undertake in the future. In exchange, Choom will operate retail cannabis stores on behalf of Aurora.

Choom operates 15 retail stores across British Columbia, Alberta, and Ontario, and has launched a proprietary e-commerce platform to keep up with the changing industry. Aurora Cannabis is a licensed producer that started in medical cannabis but can now be found in the recreational market under the brands San Rafael ’71, Daily Special, Aurora Drift, Whistler Cannabis Co., AltaVie, and Woodstock.

Photo courtesy of Luke Potter.