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Creating a Preeminent Global Cannabis Company &
Creating a Preeminent Global Cannabis Company
&
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DisclaimerCAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain information in contained in this presentation constitutes forward-looking statements under applicablesecurities laws. Any statements that are contained in this presentation that are not statements of historical fact may be deemed to be forward-looking statements. Forward lookingstatements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “potential”, “believe”, “intend” or the negative of these terms and similar expressions. Forward-looking statements in this presentation include, but are not limited to, statements with respect to accretive earnings, anticipated benefits associated with the acquisition of MedReleaf(herein the “Transaction”), statements with respect to the pro forma effect of the Transaction on the combined company and its strategy going forward, the completion of any capitalproject or expansions, the timing for the completion of the Transaction; the consideration to be received by shareholders of MedReleaf, which may fluctuate in value due to Auroracommon shares forming the consideration; statements with respect to the funded production capacity which may not be achieved or realized within the time frames stated or at all, theanticipated size and or revenue associated with the adult consumer market in Canada and the global market for medical marijuana, the satisfaction of closing conditions including,without limitation (i) required Aurora and MedReleaf shareholder approvals; (ii) necessary court approval in connection with the plan of arrangement, (iii) receipt of any requiredapprovals under the Competition Act; (iv) certain termination rights available to the parties under the Arrangement Agreement; (v) Aurora obtaining the necessary approvals from the TSXfor the listing of its common shares in connection with the Transaction; and (vi) other closing conditions, including, without limitation, compliance by Aurora and MedReleaf with variouscovenants contained in the Arrangement Agreement. In particular, there can be no assurance that the Transaction will be completed or completed on the terms described in thispresentation. Forward looking statements are based on certain assumptions regarding Aurora and MedReleaf, including expected growth, results of operations, performance, industrytrends and growth opportunities. While Aurora and MedReleaf consider these assumptions to be reasonable, based on information currently available, they may prove to be incorrect.Recipients are cautioned not to place undue reliance on forward-looking statements contained herein. Forward-looking statements also necessarily involve known and unknown risks,including, without limitation, risks associated with general economic conditions; adverse industry events; future legislative and regulatory developments; inability to access sufficientcapital from internal and external sources, and/or inability to access sufficient capital on favorable terms; the early stage of the cannabis industry in Canada generally, realization offunded production estimates, income tax and regulatory matters; the ability of Aurora to implement its business strategies; competition; currency and interest rate fluctuations; the riskof difficulties in the integration of Aurora and MedReleaf, the estimated size of the adult consumer market for cannabis in Canada, the estimated size of the global medical cannabismarket and other risks.
Recipients are cautioned that the foregoing risks are not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be noassurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation,may prove to be incorrect and actual results may differ materially from those anticipated.
Forward-looking statements contained in this presentation are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject tochange thereafter. Aurora and MedReleaf disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future eventsor otherwise, except as required by law. Factors that could cause anticipated opportunities and actual results to differ materially include, but are not limited to, matters referred to aboveand elsewhere in Aurora’s and MedReleaf’s public filings and the material change reports that will be filed in respect of this Transaction, which are, or will be, available on SEDAR.
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A Compelling Combination for Accelerated Growth
Industry Leading Scale
Extensive Distribution Channels in Canada and Internationally
Enhanced Capital Markets Profile
Proven Execution & Agility Across Value
Chain
Innovation and R&D Excellence
Low ProductionCosts and Industry
Leading Yields
Award Winning Product Lines Support
Brand Leadership
$Enhanced
Diversification
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Brands
R&D Technology and Genetics
Domestic and International Distribution
Overview
8 Facilities430,000+(1) kg/year
3 Facilities140,000+ kg/year
SAQ, PharmaChoice, Pharmasave, Liquor Stores,
Pedanios, Shoppers Drug MartSAQ, Cannamedical Pharma,
Shoppers Drug Mart
24 distinct strains in production, oil products, topical creams, capsules
20+ dried products, 6 oil products, 4 capsule products,
topical creams
Aurora, CanniMed, HempCo, Radient
TechnologiesMedReleaf, San Rafael '71,
Woodstock, AltaVie
Funded Capacity
State-of-the art automation, 17+ years of cannabis
research
High-yield cultivator, proprietary genetics,
substantive patient data
570,000+ kg/year
Robust distribution
17 Lift Canadian Cannabis Awards
Comprehensive portfolio
Higher pace of innovation from seed to sale supported by leading research team
Funded Capacity
Products
1. Includes proportionate share of The Green Organic Dutchman (23,000 kg per annum).
Combined Company
Transaction Highlights
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Transaction Summary
Proposed Transaction
• Aurora to acquire all of the issued and outstanding common shares of MedReleaf in an all-share transaction• Unanimously approved by the boards of directors of each of company• Court approved Plan of Arrangement• Pro forma ownership of 61% Aurora / 39% MedReleaf
Consideration to MedReleaf
• MedReleaf shareholders will receive 3.575x Aurora common shares for each MedReleaf common share
• Implies a price of C$29.44 per MedReleaf common share and a premium of approximately 34%, based on the 20-day volume weighted average prices of Aurora and MedReleaf as of 11-May-18
• Implies a total transaction value of approximately C$3.2 bn on a fully diluted basis
Key Approvals and Conditions
• Aurora shareholder approval (majority of votes cast at a special meeting)• MedReleaf shareholder approval (66 2/3% of votes cast at a special meeting)• 56% of existing MedReleaf shareholders have entered into irrevocable hard lock-ups with Aurora to vote in favour of
the Arrangement• Customary regulatory, court approvals, and other closing conditions
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Transaction Summary (cont’d)
DealProtection
• Reciprocal and customary non-solicitation covenants• Reciprocal 5 business day right to match any superior proposal• Termination fee of C$80 mm payable by either party under certain specified circumstances • Expense reimbursement of C$15 mm payable by either party under certain specified circumstances
Timing
• Mailing of special meeting materials expected to occur during the month of June 2018• Special meetings of Aurora and MedReleaf shareholders expected to occur during month of July 2018 and closing of
the transaction is expected thereafter following receipt of all required regulatory approvals and satisfaction of other customary closing conditions
Aurora + MedReleafA Compelling Combination for Accelerated Growth
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What MedReleaf Brings to AuroraAll Boxes Checked
High Quality Assurance and Quality Control (ISO 9001 and ICH-GMP
Certified Facilities)
Strategic and Creative Brand-Seeding Based on Deep Consumer
Insights
Established Presence in Eastern Canada
Award Winning Products
Expanding International FootprintDeep Technical Expertise andHigh-Yield Indoor Cultivator
EstablishedBrand in Canadian
Medical Cannabis Market
Focus on Clinical R&D, Patient Data and Innovative Product
Development
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What Aurora Brings to MedReleafAll Boxes Checked
Technical Know-How in Building Low Cost, Fully Automated Facilities Enhanced Market Liquidity
Established Western Canadian Presence
European Union (EU) GMP Certified
Strong Brands, Innovation and Product Development
Domestic and International Distribution Capabilities
Participation Acrossthe Entire Value Chain
Advanced R&D and Technological Capabilities
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Go-Forward Strategy
Strategic M&A
Acquire Brands & Expertise Across
Value Chain
Expand Portfolio of Strategic Partnerships
Gain Access to New Region and
Distribution Channels
Capacity
Establish a Large Global Production Footprint, Based
on Market-Leading
Technological Design and Operational Know-How
High-Tech, Lost-Cost Facilities
International Distribution
Leverage Global Footprint through GMP Facilities to Facilitate Growth
into the International
Medical Market
Well-recognized Medical &
Consumer Brands
Expand Portfolio of Brands for
Medical & Adult Consumer Use
R&D
Leverage R&D Capabilities to
Develop a Well-Diversified Portfolio of IP (Medical and
Consumer Products,
Technologies)
Scale, Costs, Agility, Innovation and Execution to Accelerate Growth
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Building Growing Extraction Testing, R&D Distribution Products BrandsConsumer
EngagementFormulation
• Larssen is a design and engineering consultancy for efficient greenhouses
• Low-cost operations
• MedReleaf has exceptionally high yields
• Aurora and CMED offer a diverse set of genetics
• Aurora investment in Radient,an extraction company
• MedReleaf was the first LP to launch a topical cream & oil capsules
• Aurora has creams, capsules and a strong pipeline of products
• MedReleaf has a diverse product offering, including softgels and a robust pipeline of product innovations
• Multiple PhD researchers
• MedReleaf brings 10+ years of research and patient data
• CMED brings 17+ years of clinical & research studies
• Agreementswith SDM, SAQ, PharmaChoice, Liquor Stores and many more
• Robustinternational distribution network
• Complementary and ancillary products, including BC Northern Lights, HempCo and many more
• Both companies have well-recognized medical and consumer brands
• Strong consumer engagement, with mobile app, customer care and same-day delivery in Ontario
40+pro-forma cannabis
strains
Vertical Integration with Horizontal DiversificationA Global Company with Expertise Across the Value Chain
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Industry Leading Scale11 Production Facilities
AURORA AURORA AURORA AURORA AURORA AURORA AURORA AURORA MEDRELEAF MEDRELEAF MEDRELEAF Total TGOD(1) TGOD(1)
Facility Alberta (Mountain)
Quebec(Vie)
Quebec (Lachute)
Sask. (Saskatoon)CanniMed
Alberta(Sky)
Denmark(Odense)
Denmark(Nordic)
Alberta(Sun)
Ontario (Markham)
Ontario (Bradford)
Ontario(Exeter)
Alberta, Ontario, Quebec,
Sask., Denmark
Ontario(Hamilton)
Quebec(Valleyfield)
Footprint (sq.ft) 55,000 40,000 48,000 97,000 800,000 100,000 1,000,000 1,200,000 55,000 210,000 1,000,000 4,505,000 150,000 820,000
StatusOperating since 2015
Complete and
licensed in Nov 2017
Completion in early
calendar 2018
Working on GMP
certificationExpansion
started
Licensed in January
2018Completion
by mid-2018
Retrofitting in progressCultivation
to commence in summer
2018
Recently announced
facility
First planting in H1 2019
Completion in H2 2019
Operating since 2014
Yields 300 g / sq. ft.
Expected to be fully
operational by mid-
2018
First harvest in Q1 2019Adjacent land with space for
~1.5mm sq. ft. facility
Expected completion in Q4 2018
Expected completion in
Q2 2019
Funded Capacity(kg / yr)
4,800 4,000+ 4,500+ 19,000 100,000+ 8,000 120,000+ 150,000+ 7,000 28,000 105,000 570,000+ 14,000 102,000
Estimated Completion Date
Nov-14 Apr-17 Nov-17 Mar-18 H2 2018 H2 2018 H2 2019 H2 2019 2014 H2 2018 H1 2019(3) Q4 2018 Q2 2019
1. Aurora has the option to incrementally increase its ownership interest in TGOD to over 50% upon TGOD achieving certain operational milestones.2. The sum of Aurora and MedReleaf’s announced funded capacity is 430,000+ kg and 140,000+ kg per year, respectively; total funded capacity of
Aurora includes proportionate share of TGOD (23,000 kg per annum).3. Based on first harvest.
(2)
Rapid Conversion of Remaining Funded Capacity Into Production Capacity By End of 2019
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Industry Leading ScaleFunded Capacity and Market Capitalization
1. Shown on a fully-diluted basis as of 11-May-18.
Pro Forma Funded Capacity (000 kg) Pro Forma (No Premium)(1)Market Capitalization (C$ bn)
570+ 500+
230
Competitor 1 Competitor 2
$7.4 $7.0
$2.5
Competitor 1 Competitor 2
Enhanced Scale to Further Accelerate Growth
• An Aurora-MedReleaf combination will create the largest publicly traded cannabis company by funded capacity and market capitalization
• Increased size and weighting in index tracking portfolios has the potential to lower cost of capital and attract industry-leading trading multiples
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Canadian Adult Consumer Use Market
Source: Deloitte Recreational Marijuana: Insights and Opportunities
Canadian Medical and Adult Consumer
Use Demand will outstrip supply until
2021
Potential Upside
Ancillary Market
Base Market
Population of Adult
Consumers
Annual Consumption Volume in Grams per
Consumer
Price per Gram of Marijuana
Growers Infused Product Makers
Testing Labs Security
Tourism Revenue
Business Taxes License Fees Paraphernalia
$9+ bn
$23 bn
Base Retail Market Value
Base + Ancillary
Canada is 3-4 years ahead of any other country in terms of building a federally legal, commercial
scale, cannabis cultivation industry
According to Deloitte, sales in the
Canadian adult consumer use
market could be ~$5bn to ~$9bn per
annum
$9+ bn
Base Retail Market Value
$14+ bn
With Ancillary Multiplier
PotentialUpside to Base and Ancillary Markets
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Global Medical Opportunity
Source: Eight Capital 2018 Outlook: Legalization Will Lead to Globalization
North American
Market Size:~4.0 million
kg
South American
Market Size:~2.0 million
kg
EuropeMarket Size:
~4.0 million kg
AustraliaMarket Size:
~0.2 million kg
AfricaMarket Size:
~0.5 million kg
• Total addressable market size of~C$180 bn at maturity
• Total implied demand greater than10 million kg per year
• This market will remain undersupplied for the foreseeable future
AsiaMarket Size:Unknown
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AfricaMarket Size:
~0.5 million kgsCayman IslandsFirst ever sale of commercial cannabis oils
GermanySells cannabis through Pedanios(1), Aurora’s wholly owned wholesale importer / exporter / distributerAllows Aurora to capture full margin to pharmaciesIntroducing CanvasRxmodel to seed and accelerate growth
Germany
Supply agreement with Cannamedical Pharma
Denmark(1)
Owns 51% of Aurora Nordic where a 1,000,000 sq ft facility is being built and a 100,000 sq ft retrofit greenhouse
Extensive Distribution Channels in Canada and Internationally
South AfricaDefinitive agreement to supply cannabis products to Akula Trading 2 Pty Ltd.
Australia22.9% interest in Cann Group, first Australian company licensed to cultivate medical cannabisFirst ever shipment of commercial cannabis oils through CanniMed
AustraliaJV partner Indica received cannabis cultivation and production license
ItalySells cannabis to the Italian government through Pedanios; completed first ever private export from Canada in April-18
AuroraMedReleafBoth Aurora & MedReleaf
BrazilCompleted first ICH-GMP certified commercial export and the country’s first import of cannabis-oil
European UnionLOI with Creso Pharma Ltd. to market CMED medical cannabis brands
Canada (Combined)Operates 9 facilities Established key distributor relationships (SAQ, Shoppers, PharmaChoice and more)
Significant Opportunity for Cross-selling Through Complementary Distribution Networks
1. Aurora Nordic will focus on the cultivation and sales of cannabis in Denmark, Sweden, Norway, Finland and Iceland through Aurora’s wholly-owned subsidiary, Pedanios.
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--
$10
$20
$30
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Qua
rterly
Rev
enue
(C$
mm
)
Proven Execution & Agility
• Fastest ramp up, execution and sales growth achieved relative to other licensed producers
• High pace of execution enhances early mover advantage and rapid capitalization on opportunities
Quarterly Revenue Development
(1)
1. Aurora (Pro Forma CanniMed) and MedReleaf.
Competitor 2
Competitor 1
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Proven Execution & Agility (cont’d)
Acquisitions
Branding / Strategic
Investments
14-Dec-16Signs JV MOU with
Radient
8-June-17Strategic Investment
in HempCo,Food and Fiber
30-Mar-17Strategic Investment in
Australia through investment inCann Group
5-Jan-18Strategic
Investment in TGOD
15-Jan-18Strategic
Investment in Micron Waste
22-Feb-18Strategic
Investment in Liquor Stores N.A.
9-Feb-18Introduces
San Rafael '71
6-Mar-18 Adds the Woodstock
brand
3-Apr-18 Launched Premium
Cannabis Brand, AltaVie
2-Oct-17Acquires
B.C. Northern LightsUrban Cultivator
6-Mar-17AcquiresPelaton
Pharmaceuticals
26-May-17Acquires
Pedanios in Germany, a wholesale importer, exporter,
and distributor of medical cannabis in the E.U.
18-Aug-16Acquires
CanvasRx,a Canadian cannabis
patient counselling service
5-Dec-17AcquiresLarssen
H2 Biopharma
28-Mar-18Acquires
CanniMed
Aurora MedReleaf
14-Sep-17Announces R&D
Collaboration and investment in cannabis
grow lighting firm Flora Fotonica
Dec-16 Mar-17 Jun-17 Sep-17 Mar-18Dec-17
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Select Brands Awards
• Combined company will have a more comprehensive portfolio of medical and recreational brands
• Combined company won 17 Lift Canadian Cannabis Awards in 2017
0%
5%
10%
15%
20%
25%
0% 5% 10% 15%
THC
Val
ue (%
)
CBD Value (%)
Top Licensed Producer - WinnerTop High CBD Oil - WinnerTop Indica Flower - WinnerTop High CBD Flower - WinnerTop High THC Flower - WinnerTop Licensed Producer Customer Service – Finalist (#2)Top Licensed Producer Compassionate Pricing – Finalist(#2)Top Licensed Producer Packaging – Finalist (#2)Top Hybrid Flower – Finalist (#2)Top Sativa Flower – Finalist (#3)
Top High THC Oil – WinnerTop Social Media Account Facebook – WinnerTop High CBD Oil – Finalist (#2)Top High THC Flower – Finalist (#3)Top Sativa Flower – Finalist (#2)Top Social Media Account Twitter – Finalist (#3)Top Licensed Producer Compassionate Pricing – Finalist(#3)
Award Winning Product Lines Support Brand Leadership
Comprehensive Genetics Offering
Brands and Strains Recognized with a Combined 17 Lift Canadian Cannabis Awards
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Innovation and R&D Excellence
A Science Driven Approach
• Thousands of data records collected over 10 years drive enhanced patient experience
• Clinical research with well-recognized research centers and leadership, including 11 peer-reviewed publications
• Developing a Medical Cannabis Centre of Excellence
• Strong scientific leadership team with proven track-record in product development
Innovative Product Development
• Innovative and diverse product lines, including topical creams and capsules
• First LP to bring capsules, topical cream and variety-specific softgelcapsules to market
Science-based Approach Resonates with Medical Professionals and Contributes to Broader Product
Recognition and Brand StrengthDeveloping Marketable IP to Deliver
Products for Medical and Adult Consumer Use Markets
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Experienced and Dedicated Aurora Integration TeamSolid Results and Progress on CanniMed Integration
Detailed Business Integration Team Capable of Addressing Multiple Concurrent Integration Programs • Integration is a corporate priority
Dedicated SVP leading business integration team
Defined Aurora integration methodology targeting maximum merger benefits in first 90 days • Detailed business integration plan and management
500+ key integration tasks • Focus on identifying opportunities to improve operations (production, cost efficiency and organizational structure)• Coordinated communication and engagement drives talent retention
CanniMed Progress (60 of 90 Day Plan) • Since acquiring CanniMed, Aurora has implemented and executed on its integration plan:
Integration is on schedule with our 90 day plan
Leveraging under-utilized licensed space to deliver new products to the adult use market
Progressing on significant yield enhancements within existing footprint
Immediate increase in oil production capacity
Leveraging Canvas RX and physician network to accelerate distribution to medical markets
Financial Data
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Aurora MedReleaf Combined Company(No Premium)
F.D. Market Capitalization(1)
(C$ mm)$4,772 $2,669 $7,441
Cash and Cash Equivalents(2)
(C$ mm)$167 $218 $385
Debt(2)
(C$ mm)$244 $10 $254
Enterprise Value(C$ mm) $4,373 $2,414 $6,786
Geographical Sales PresenceAustralia, Canada, Cayman Islands,
Denmark, Finland, Germany, Iceland, Italy, Norway, South Africa, Sweden
Australia, Brazil, Canada,Germany
Australia, Brazil, Canada, Cayman Islands, Denmark, Finland, Germany, Iceland, Italy, Norway, South Africa,
Sweden
Number of Facilties 8 3 11
Current Capacity 15,800 kgs 16,500 kgs 32,300 kgs
Funded Capacity 430,000+ kgs 140,000+ kgs 570,000+ kgs
Capitalization
OperatingDetails
Summary of the Combined Company
1. Shown on a fully-diluted basis as of 11-May-18.2. Based on most recent filings (31-Mar-18 for Aurora and 31-Dec-17 for MedReleaf), adjusted for subsequent events.
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A Compelling Combination for Accelerated Growth
Industry Leading Scale
Extensive Distribution Channels in Canada and Internationally
Enhanced Capital Markets Profile
Proven Execution & Agility Across Value
Chain
Innovation and R&D Excellence
Low ProductionCosts and Industry
Leading Yields
Award Winning Product Lines Support
Brand Leadership
$Enhanced
Diversification
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Marc Lakmaaker, Director IR &Corporate [email protected]
Cam BattleyChief Corporate [email protected]
Contact Information
Darren KarasiukSVP & GM, [email protected]
Dennis Fong (LodeRock Advisors Inc.)Investor [email protected]
Investor Relations: 1-855-279-4652 Investor Relations: 1-855-473-5323
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