In a move industry insiders had previously called a hostile takeover, Aurora Cannabis has bought CanniMed Therapeutics for $1.1 billion CAD ($852 million USD). The purchase makes Aurora the largest cannabis producer on Earth based on market value, overtaking Canopy Growth Corporation.
While the United States continues to grapple with the conflict between state and federal policy in the face of an expanding global cannabis industry, Canadian marijuana producers are seeing exponential growth in what is a wide-open field of prosperity. This latest deal marks the largest marijuana transaction in history, during a season of vast consolidation among cannabis companies.
Aurora Cannabis effectively made the move to expand its cultivation ability in order to meet the insatiable demand of the imminent recreational market this summer.
After the news of the purchase was released, shares in CanniMed went up 23 percent at times to $43.80 CAD. As of publication, the shares were at $42.66 CAD.
Previous to Aurora’s purchase of CanniMed, the latter company was in talks to purchase licensed producer Newstrike. That deal went south once CanniMed was acquired and shares of Newstrike fell 21 percent in value to $1.44 CAD.
A previous all-stock offer from Aurora was quickly scuttled by CanniMed, but the new deal, a combination of stock and cash, was seen as satisfactory by both parties involved. For a while, dealings between the two companies had become quite dramatic, as evidenced by mutual public criticism and a lawsuit on behalf of CanniMed against Aurora.
“We are very pleased to have come to terms with CanniMed on this powerful strategic combination that will establish a best-in-class cannabis company with operations across Canada and around the world,” said Aurora CEO Terry Booth.
Canopy Growth Corporation was the largest cannabis producer and remains so in terms of production capacity, but the purchase of CanniMed by Aurora gives them a market value of $7.8 billion CAD, with Canopy valued at $6.9 billion CAD.