A major player in B.C.’s greenhouse vegetable sector is about to expand its operations into an Alberta cannabis grow facility — backed by a major investment from the plant’s owner.
Aurora Cannabis on Aug. 25 announced a subsidiary is buying a 50.1 per cent stake in Bevo Agtech, the parent of vegetable and ornamental plant producer Bevo Farms — which in turn is buying Aurora Cannabis’ Aurora Sky grow facility at Edmonton, to convert to “non-cannabis” use.
Publicly-traded, Edmonton-based Aurora said it had paid about $45 million cash to Bevo’s selling shareholders on closing of the deal, with up to another $12 million in Aurora stock to follow over the next three years depending on “certain financial milestones” being reached at Bevo’s Site One facility at Langley, B.C.
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On the other side of the deal, Bevo is to pay up to $25 million to Aurora over time for the Aurora Sky facility — in Leduc County, near Edmonton International Airport — based on “certain financial milestones” being reached at that site.
Bevo is billed as one of the biggest suppliers of propagated vegetables — mainly tomatoes, peppers, cucumbers and eggplants — and ornamental plants in North America.
The company today grows greenhouse seedlings, field crop seedlings and floral plants on 63 acres of greenhouse space at Langley, Aldergrove and Pitt Meadows in B.C.’s Fraser Valley.
Bevo’s management team will remain “significant” shareholders in that company and will embark on a “robust” growth plan, including the use of Aurora Sky to grow orchids and propagate vegetables.
Aurora Cannabis, which has shuttered multiple production sites in several provinces in the recent years, had announced in May it would close the Aurora Sky site by its third quarter in 2023.
At that time, Aurora Sky — purpose-built in 2018 as the largest cannabis production facility in the world — was operating at just 25 per cent of capacity, the company said.
Aurora CEO Miguel Martin, in the company’s Aug. 25 announcement, said the deal with Bevo to repurpose Aurora Sky will save “significant costs previously expected in connection with the wind-down and sale of the facility.”
Aurora, he said, expects its investment in — and collaboration with — Bevo to “drive significant shareholder value and synergies for both parties.”
Bevo CEO Leo Benne, in the same release, said expanding into Alberta “allows us to significantly expand Bevo’s addressable market,” by boosting its production capability, extending its shipping range and accessing “new regional greenhouse demand” in both Canada and the U.S.
Also, he said, Bevo is “incredibly happy that the Aurora team is committed to keeping all of our facilities dedicated to our customer base, and to expanding our operations into Alberta through the addition of the Aurora Sky facility.” — Glacier FarmMedia Network
