Is Aurora Cannabis Dumping The Green Organic Dutchman?

Aurora Cannabis (TSX: ACB) (NYSE: ACB) appears to be shopping its final holdings in The Green Organic Dutchman (TSX: TGOD) to institutional and accredited investors. An apparent email was distributed to numerous accredited investors this afternoon indicating that the firm was looking to sell its position.

In total, Aurora Cannabis appears to be selling its final 28.3 million shares in the company at a price of $3.00 per share. Cumulatively, the sale will result in cash proceeds of $86.5 million for the Alberta based issuer, which will go towards its continuous consumption of funding. Upon completion of the sale, Aurora will only hold 19.8 million share purchase warrants in the organic producer.

Industry followers had recently suspected that a raise of sorts may be incoming for The Green Organic Dutchman as a result of recent borrow rates placed on the firm by retail brokerages. Borrow rates were reportedly as high as 131.50% for the equity heading into the long weekend. However, that reasoning didn’t resonate with long-position holders who identified that the firm reported $68.7 million in cash in the latest financials.

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Aurora Cannabis originally invested in The Green Organic Dutchman back in January 2018. Originally taking a 17.62% stake in the organic producer, Aurora held roughly 33.3 million shares at a price of $1.65, with additional warrants that have an exercise price of $3.00. As part of the initial investment, certain rights were assigned to Aurora that would allow it to purchase a portion of the cannabis produced by TGOD, as well as options to increase its ownership.

Rather than increase ownership, Aurora elected to sell its shares in the organic producer as a result of the gains it had seen on its initial investment. Aurora Cannabis began selling its position in The Green Organic Dutchman in early October 2018, and proceeded to reduce its share count in several installments through to January 2019, at which point it held a remaining 28.3 million shares. Those shares, evidently, are now up for grabs as the firm attempts to sell its final position in TGOD’s common shares.

The Green Organic Dutchman closed today’s session at $3.51, up 4.46% on the news that the firm received final licensing at its Hamilton facility.

Information for this briefing was found via Sedar and The Green Organic Dutchman. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.