Aurora Gets Dirty With Micron Waste Technologies

Aurora Cannabis Inc. (TSX:ACB) has made a strategic investment in Micron Waste Technologies Inc. (CSE:MWM) in a deal that gives Aurora a cut of the gross revenues in return. Additionally, the two companies will collaborate to further progress on Micron’s organic waste treatment technology as it relates to the cannabis cultivation process. Micron’s team developed a proprietary digester solution for the treatment of organic waste.

Micron’s New Technology

Aurora’s interest in Micron stems from the waste company’s new aerobic digestion-based technology design. The equipment, which converts organic waste into purified water, fully meets the municipal effluent discharge standards. To put that into perspective, current designs and equipment available on the market today require expensive forms of further treatment for organic waste as they do not comply with municipal standards. Due to such excessive costs, most companies that generate substantial amounts of organic waste end up dumping it in landfills. That in itself incurs a cost, not only in monetary value, but in its impact on the environment as well.

Micron, on the other hand, has already proven their technology to be beneficial. In fact, the company has already demonstrated its use with a British Columbia grocery store chain. So successful was the demonstration that Micron has entered into a Memorandum of Understanding with the chain for additional pieces of equipment across the province.

The Agreement With Aurora

The soon-to-be-completed agreement between Micron and Aurora calls for one of Aurora’s cultivation facilities to be equipped with Micron’s technology. Collectively, both companies will work to finesse the product, optimizing it for commercial distribution across the cannabis industry. Upon proven success of the final product, Aurora retains the option to sign a definitive supply agreement with Micron, allowing them to purchase the technology for each of their cultivation facilities at a preferred pricing structure.

"The investment in and collaboration with Micron reflect our commitment to innovation in the cannabis sector, aimed in this case at achieving improved operational economics, as well as a superior, 'greener' approach to organic waste management," said Aurora CEO Terry Booth in a statement. "The treatment and disposal of organic waste in the cannabis industry is a time consuming and costly exercise that is subject to strict regulation by Health Canada. Micron's solution promises to be a very elegant, highly efficient and low-cost alternative that will also have a positive impact on the environment.”

In recognition of Aurora’s role in aiding in the final design of the technology for use in cannabis cultivation, Micron has agreed to pay royalties to Aurora. As per the statement released on Tuesday, Micron agreed to pay Aurora 4 percent of gross revenues related to the sales and services of the new technology. Micron will keep all intellectual property rights to the new system.

“Aurora's investment provides additional funds to accelerate diversification into other sectors, such as supermarkets, quick-serve restaurants, agricultural operations and hotels, which are all faced with high organic waste disposal costs,” add Rav Mlait, CEO of Micron. “While our goal has always been to deliver solutions that have a positive impact on the environment, the only way to truly make a difference is by having a value proposition that provides a strong commercial rationale for adoption.”

By The Numbers

Included in the agreement is the right of Aurora to purchase up to 6,000,000 shares of Micron at a cost of $0.34 per share, for a total cost of $2,040,000 million. Post-investment those numbers represent a 9 percent interest by Aurora in Micron. Once the first piece of technology is successfully sold, Micron agrees to issue an additional 2 million shares to Aurora.

“In making this investment, we anticipate benefiting not only from the positive impact on our operations, but also by being exposed to the upside potential of Micron's commercial development. We look forward to collaborating with Micron in furthering the market reach of this very promising technology," continued Aurora CEO Terry Booth.

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