Cannada’s No. 2 cannabis producer, Aurora Cannabis Inc, agreed to purchase a smaller cannabis firm, CanniMed Therapeutics Inc, for $852 million. This is in anticipation for the country’s legalization of Adult Use cannabis later this year.
Although there has been traditionally much tension between the two companies, this agreement is to create the world’s top cannabis producer by market value. Aurora originally made a hostile bid capped at C$24 per share for CanniMed, and increased it all the way up to C$43 in the new offer.
This is now the world’s biggest cannabis industry transaction, bringing up the value of total cannabis deals so far this year to $1.2 billion, already more than double that of 2017. Most of this activity has been based in Canada due to the fact they are set to legalize cannabis by mid 2018, the second country to do so after Uruguay.
While many countries have legalized medical cannabis, Canada’s early move to Adult Use puts the country to the north of the US at a great advantage. The US still lags behind, although many states have Medical and Adult Use it remains illegal at a federal level.
Aurora hopes to boost its capacity to meet demand and increase distribution by its purchase of CanniMed.
“The action is where the medical cannabis export markets are, which are much larger than Canada,” said Chris Damas, editor of the BCMI Cannabis Report. “CanniMed has patents, they have relationships with different universities, research and clinical trials, and export relations with other countries, and Aurora wants to add to their own relationships in Europe.”