Aurora Cannabis (NYSE: ACB) (TSX: ACB) recently entered a royalty-bearing agreement with EnWave Corporation (TSX-V: ENW) (NASDAQOTH: NWVCF) (FES: E4U), a Vancouver-based technology company for the exclusive right to EnWave’s patented drying technology, Radiant Energy Vacuum (REV). As part of the deal, Aurora made C$10 equity investment in EnWave culminating to the purchase of 5.3 million shares at C$1.886. As a result of the transaction, Aurora now owns about 5% of EnWave. However, there were more gains for Aurora in this deal.
The deal permits Aurora to use the technology to produce cannabis material in the European Union (with exception of Portugal). Furthermore, Aurora has secured the exclusive license for Australia and South America (except Peru) if it meets the minimum purchase order of REV. Aurora has also signed a non-exclusive sub-license to use the technology in Canada. Aurora will pay undisclosed royalties to EnWave for all sub-licensing earnings.
The REV technology can significantly reduce cannabis drying time from the current 5-7 days to less than 1 hour. With the help of this technology, Aurora can shorten sales cycles and overhead. As Canada is preparing for cannabis-infused edibles and beverages later this year, this can be a big deal. According to Terry Booth, Aurora Cannabis CEO, “EnWave’s technology [will provide the company with] industrial-scale flow-through, reducing working capital requirements, accelerating time to market harvest, as well as increasing our ability to produce bulk-scale cannabis for extraction and use in derivative products.”
Consequently, Aurora has ordered two REV dehydration systems for use by its Canada Aurora Sun and Aurora Sky facilities. Aurora is also planning for the purchase of the third REV for its Denmark Aurora Nordic facility. Booth explains, “Enware’s technology offers very significant benefits that further improve the economic returns on our Sky Class facilities.”
The European cannabidiol (CBD) market is project to hit $1.7 billion in sales by 2023. It appears Aurora is already preparing itself to becoming an industry leader in the cannabis space.
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