Developing Pharma-Grade Medical Cannabis in Europe
This profile is part of a paid investor education campaign.*
Aura Health Inc. (CSE:BUZZ) is a global, vertically-integrated medical cannabis company. They are building an international network of vertically-integrated cannabis assets. The Company owns 80 percent of Pharmadrug, a German medical cannabis distributor, a convertible note to 54 percent of HolyCanna, a cultivation and nursery license holder in Israel, and has a binding LOI to purchase 57 percent of CannabiSendak, the builder of a network of dispensaries in Israel. Additionally, through significant extraction IP, Aura is dedicated to building a high-margin, downstream business of end-user products.
Aura is in the process of acquiring the majority interest in two companies to become a vertically-integrated business in Israel.
In August 2018, Aura entered into a binding LOI to subscribe to an unsecured convertible note in HolyCanna Ltd., an Israel-based company with a cultivation and sales license application submitted to the Israeli Ministry of Health. Once the license is approved, the convertible note will convert into a 54% stake in HolyCanna.
HolyCanna holds 26% of a cannabis cultivation center in Central Israel where the climate is ideal for outdoor cultivation. HolyCanna is developing an initial 50,000 square-foot facility, which will house the existing 7,500 square feet of indoor operations and 42,500 square feet of outdoor grow space. The company has the option to further expand across an additional 325,000 square feet.
In September 2018, Aura entered into a binding LOI to acquire a 57% interest of the outstanding equity of CannabiSendak Ltd., an Israeli cannabis company founded by Israeli cannabis icon and activist Shlomi Sendak.
The company plans to establish licensed medical cannabis dispensaries throughout Israel supplied exclusively by HolyCanna. The first launch will be a high-profile dispensary in Tel Aviv featuring a café, patient consultation offerings, and medical professionals on site. The company expects to ramp to 10,000 patients accessing the dispensaries on a monthly basis.
Aura is currently in discussions with several extraction companies and intends to capitalize on the emerging cannabis market in Europe through the following:
- An opening Israeli export market;
- Production advancements from its HolyCanna facility; and
- Extraction know-how through strategic investor Nutritional High.
Europe’s cannabis market is forecasted to reach 115.7 billion euros by 2028, according to a report by Prohibition Partners, and its medical cannabis market could be worth 55 billion euros by 2023.
Aura intends to penetrate the European market by forming partnerships in key countries, like Germany, a forerunner of the European cannabis industry. Currently, the country only hosts a legalized medical cannabis market, but recreational use may emerge down the line.
- Strategic agreements with HolyCanna and CannabiSendak in Israel are solidified;
- HolyCanna initial operation of 50,000 square feet of grow with option to expand an additional 325,000 square feet;
- CannabiSendak to build its first high-profile dispensary in Tel Aviv, growing to 10,000 monthly patients;
- In discussions with various extraction companies in Europe;
- Strategic shareholder Nutritional High holds 12% of the company’s shares; and
- Aura’s management team and board hold 14% of the company’s shares.
Developing Extraction Expertise
As part of a partnership with Nutritional High, Aura has access to cannabis extract expertise as well as the ability to leverage Nutritional High’s proprietary product development approach including:
- Proprietary techniques for infusing products with THC or CBD;
- Short-path distillation techniques and machinery that ensures potency;
- Cleanliness and consistency of product; and
- A network of experts that specialize in different aspects across the seed-to-sale supply chain for cannabis.
Nutritional High has developed oils that test as high as 98% THC and they have product development capabilities for extracts, tablets, vape cartridges and edible products.
The Israeli Cannabis Market
Israel has been a pioneer in cannabis R&D for decades, making use of its global leadership in agricultural technology. In the early 1990s, a medical cannabis program was implemented to help cancer patients with pain related issues. Today, Israel has over 35,000 licensed medical cannabis patients, which is one of the highest per capita rates in the world, as well as 80 doctors licensed to prescribe cannabis with regulator’s approval.
The country’s new medical regime is projected for end of 2018 and will incorporate new reforms for the market. This has included a pilot program for new pharmacies and dispensaries that was launched in April. There is also a doctor’s training program available that is seeing large demand from Israeli MDs. In the new regime, prescriptions will not require approval from a regulating body.
Israel is currently producing more cannabis than its market can handle and the future of its market lies in exportation to other jurisdictions. The Israeli government is currently working on passing the framework. It has so far received support from the Department of Agriculture and the Department of Finance. The framework is currently awaiting final approval from the Department of Homeland Security before it can be implemented, with expected launch before the end of 2018.
Daniel Cohen — CEO
Daniel has over 20 years of capital markets experience, most recently spending several years as Head of Sales at Beacon Securities. During this time, Daniel successfully financed many public cannabis companies.
Keith Li — CFO
Keith has over 10 years of experience in public accounting and the private sector. His specialties include audit and assurance, corporate accounting, financial reporting, and regulatory compliance services.
Howard Brass — COO
Howard has nearly a decade of capital markets experience and spent several years leading the restructuring, growth, and sale of Cliplight Manufacturing Company to private equity firm The Jordan Company. Mr. Brass holds an HBA from the Richard Ivey School of Business and is a CFA charterholder.
David Posner — Chairman
David has long been an active player in the public cannabis sector. David is the founder and chairman of Nutritional High (EAT.CN) and played an active role in founding Tinley (TNY.CN), Lineage Grow (BUDD.CN), and Xanthic Biopharma (XTHC.CN). Formerly, David ran a real estate development fund with projects in North and Central America.
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