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Shareholder Update & Q&A

Dear Shareholders & Friends,

TGOD would like to provide you with an update on what has taken place over the past few months. We will have an additional update in the coming weeks once our preliminary prospectus has been filed that will bring you up to speed on everything from corporate activities to new hires, our listing date (on track for March), and how to access our IPO.

The purpose of this update is to address many of the questions you may have regarding our financing and new partnership with Aurora. If you have additional questions, please contact our Investor Relations team anytime as we are happy to provide additional information.

FINANCING UPDATE
TGOD has closed its previously announced financing for a combined $112 million. This includes an impressive 2,000 additional shareholders for $56 million and a $55 million investment from our new strategic partner, Aurora Cannabis Inc. (TSX: ACB).

Please note, due to the sheer volume of subscribers, share certificates continue to be sent out in batches. All shareholders should receive their documents by the end of January.

  • The TGOD news release can be found here.
  • The Aurora news release can be found here.

Let us start by saying congratulations to all TGOD shareholders on a successful financing. Let’s welcome Aurora and our ~2,000 additional shareholders to the TGOD family. We are now ~4,000 strong!

We have received numerous questions about our recent financing and our new partnership. As part of our ongoing effort to provide the most transparent and up to date information, we have structured a Q&A with our VP of Investor Relations, Danny Brody, to address these questions below.

The Board of Directors elected to fully fund our entire 116,000 kg expansion for several key reasons, this decision:

  • Removes financing risk
  • Adds significant shareholder value by increasing our valuation on a fully funded basis
  • Ranks TGOD in the top 5 of all Canadian LPs based on a fully funded capacity
  • Makes TGOD the dominant player in “Organic Cannabis”
  • Increases our IPO value and interest from institutions
  • Positions TGOD to mirror Aurora’s rapid growth trajectory

Q&A

Question:
Why have another LP, specifically Aurora, positioned as a strategic investor?

Answer:

Positioning Aurora as a strategic investor is important for many reasons, including:           

  • Acceleration of our construction and build-out
  • Aurora and TGOD are building similar sized world-class operations
  • Advanced insight into Aurora’s 800,000 sq. ft. state-of-the-art facility, Aurora Sky
  • Aurora has a group of partner companies that can provide us with a suite of services that are best in class, tested and already proven
  • Investment from one of the largest cannabis companies in the world validates and endorses our business plan and accomplishments
  • Continued relationship with Aurora Larssen Projects Inc. (ALPS)
  • Reduces our time to market significantly, limiting our costs and reducing our risks
  • We applaud Aurora’s innovation & execution and believe working together adds significant value that would be difficult to replicate alone
  • Aurora’s CEO, Terry Booth, is a visionary that we are excited to partner with
  • We decided to fully fund our operation and the available options for financing lead us to a simple question:
  1. select a financial institution which only supplies capital? or;
  2. select a world-class leader in the industry that supplies financial capital, human capital, products, an international footprint, services and so much more?

Question:
Can you explain more about the supply contract?

Answer:

  • This is a synergistic supply agreement
  • Aurora receives 20% of TGOD’s organic cannabis at wholesale prices
  • TGOD receives an immediate purchase order for 20% of future sales
  • Our original business plan projected a portion of our high-quality organic cannabis would be sold into the wholesale market, this saves us from having to negotiate multiple supply contracts and allows us to focus on growing operations

Question:
Can you elaborate on why Aurora invested into TGOD and how much they bought?

Answer:

  • Aurora has purchased 17.62% for $55 million at $1.65 per share
  • This is Aurora’s largest cash investment to date which proves they see tremendous value in TGOD
  • Aurora began construction on Aurora Sky in Spring, 2017. Their stock price was $2.02. Today, Aurora is trading over $13.00. It is possible TGOD follows a similar trajectory
  • As TGOD transitions from a private to a public company, we anticipate a valuation adjustment more in-line with industry peers
  • It is apparent that Aurora sees great potential in TGOD and this is a synergistic partnership

Question:

What does this mean for our ability to scale and grow in the market?

Answer:

  • We believe this agreement substantially increases the value of TGOD, and truly is a mutually beneficial partnership
  • Aurora’s additional purchases are at public market rates (minus 10%) which acts as a built-in financing mechanism for us, and acts as another significant advantage for our Company
  • Aurora and TGOD have signed a “standstill agreement” for 18 months from listing date, during which time Aurora cannot acquire TGOD
  • This partnership helps TGOD reach an international audience with our premium products and rapidly capture market share in this dynamic market

TGOD is thrilled to have one of the largest Cannabis companies in the world positioned as our strategic investor and partner going forward. This is a powerful move, and Aurora’s investment exemplifies the vision of our management team, accelerates our growth, and de-risks the Company significantly going forward.

CEO MESSAGE FROM ROB ANDERSON

This has been an incredibly exciting year building TGOD at lightning speed. We are quickly catching up to some of the largest companies in the industry. I would like to thank each and every one of you for supporting the Company’s plan and vision to create the largest Organic Licensed Producer in Canada. (and soon beyond!)

I hope the above Q&A explains some of our thought process around the decision to partner with Aurora. If you have any further questions, comments or concerns, please contact Danny and the Investor Relations team directly as they are there to support you.

This is an extremely fast paced business in a sector that has never been built to scale. Although the opportunity is huge, so are the risks. I cannot stress enough the unknowns of commercial production, immense capital, and operation expenses required. Aurora’s investment strategically positions us to overcome these challenges by not only providing immediate financing but the opportunity for future financing as well. The experience building Aurora Sky will be invaluable as we scale TGOD to become one of the largest Licensed Producers in the world.

As the CEO of TGOD, my job is to accomplish three fundamental tasks:

  1. Provide a vision and develop a business plan around the vision;
  2. Finance the vision; and
  3. De-risk the business plan.

My vision for year one was to fully fund the best in class organic cannabis facility in Canada, which has been accomplished. Adding strategic partners such as Ledcor, Eaton, ALPS and now Aurora dramatically increases our ability to execute our business plan.

The Aurora relationship is a tremendous win for our company as it provides TGOD with the following:

  • A fully funded operation
  • Increased efficiency in building, production, and sales
  • An immediate international footprint
  • Validates the corporate vision

Partnering with the industry leader in terms of innovation and execution validates how TGOD’s differentiated business model creates substantial value for our partners and shareholders. This is a synergistic partnership that will help TGOD reach an international audience with its premium products and rapidly capture market share in this incredibly dynamic market. We look forward to working with both teams at ALPS and Aurora.

Rob Anderson, CEO
The Green Organic Dutchman
MAKING LIFE BETTER