Canada’s cannabis industry is consolidating. Aurora Cannabis Inc. (OTCQX: ACBFF), the country’s second largest producer of cannabis and cannabis oil, is acquiring Saskatoon, Saskatchewan-based CanniMed Therapeutics Inc. (TSX: CMED) for approximately C$1.1 billion (US$893,343,000) in an all-stock offer.
CanniMed bills itself as an international plant biopharmaceutical company with 17 years of pharmaceutical cannabis cultivation experience.
The impending legalization of marijuana that is expected to become law in July 2018 is pushing marijuana producers to lock down growers who can help keep up with the expected demand. This acquisition is the largest in the global marijuana industry, according to Thomson Reuters data.
This deal follows months of tension between the two companies, as Aurora originally made a hostile takeover bid capped at C$24.00 per share for CanniMed in November 2017. CanniMed enacted a poison pill in response.
Tensions thawed when Aurora came back with a bid of $43.00 per share based on an implied Aurora share price of $12.65 and 3.40 exchange ratio. The final value of the deal may fluctuate before it closes due to the volatility of marijuana stocks.
