Edmonton, Canada-based Aurora Cannabis (NYSE: ACB) (TSX: ACB) (Frankfurt: 21P) has signed an arrangement agreement to acquire all of the issued and outstanding common shares of Hempco Food and Fiber (TSX-V: HEMP) (OTC: HMPPF).

Under the agreement, Aurora has agreed to acquire all of the remaining common shares of Hempco in exchange for its common shares.

Aurora currently owns 32,872,294 Hempco common shares (nearly 52% of the company’s total common shares outstanding) and a convertible debenture of C$5 million, which may be converted into Hempco common shares at C$1.18 per conversion share. If all of the convertible debentures were converted Aurora would receive an additional 4,237,288 Hempco common shares.

Under the agreement, Aurora will, upon completion of the deal, issue approximately 0.08659 Aurora shares in exchange for each Hempco share not already owned by the company.

Hempco shareholders will not receive any cash in the transaction. In addition, each outstanding stock option to acquire Hempco shares will, following completion of the deal, entitle the holder to receive, upon the exercise thereof, approximately 0.08659 Aurora shares for each Hempco share, at a price adjusted in accordance with the exchange ratio, and otherwise on the same terms and conditions as the original option or warrant.

The board of directors of Hempco formed a committee of independent directors to, among other things, review and evaluate the terms of the transaction.

Completion of the agreement is subject to approval by the Supreme Court of British Columbia and the affirmative vote of Hempco shareholders at a special meeting of shareholders that is expected to be held on August 13, 2019.

The agreement is subject to customary conditions. Assuming that all requisite approvals are received, Aurora and Hempco expect to close the proposed deal in the third quarter of 2019 or such other date as the parties may agree.