Aurora Cannabis (TSE:ACB) is set to become one of the largest Canadian cannabis companies after announcing it would purchase medical marijuana firm MedReleaf (TSE:LEAF) for $3.2 billion in stock.
The deal will solidify Aurora as an industry giant capable of producing more than 570,000 kilograms of marijuana each year, the company announced at a press conference May 14 in Toronto.
Additionally, current shareholders of Aurora would own 61% of the combined company and Medreleaf shareholders would own roughly 39%.
"Our complementary assets, strategic synergies and strong market positioning will provide us with critical mass and an excellent product portfolio in preparation for the adult consumer use market in Canada," Aurora chief executive Terry Booth said in a statement.
"Equally, the combination strengthens our capacity to service the rapidly expanding global medical cannabis markets, and amplifies our early-mover advantage."
The company will have nine production facilities in Canada and two in Denmark and distribution agreements with Alcanna Inc. liquor stores in Alberta, SAQ provincial liquor stores in Quebec, Pharmasave and Shopper’s Drug Mart.
As of press time, shares of Aurora were down -2.35% on the day, while shares of MedReleaf were up 0.96%.