Marijuana Mega Merger: Aurora Cannabis Buys MedReleaf in $2.5B Deal

OCBFF shares dipped nearly 2% Monday

By Karl Utermohlen, InvestorPlace Writer May 14, 2018, 2:54 pm EDT May 14, 2018

A major marijuana deal was inked on Monday as Aurora Cannabis Inc (OTCMKTS:ACBFF) has agreed to buy MedReleaf as part of a $2.5 billion deal.

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The deal will see Aurora Cannabis pay C$3.2 billion, or $2.51 billion, to make the merger happen, according to statements from both companies on Monday. This is the biggest deal to bring together major Canadian marijuana growers so far.

Investors are paying close attention to pot stocks nowadays as this deal was inked only two months before cannabis was expected to be legalized for recreational use in Canada. This also isn’t the first major marijuana merger in the industry as similar moves have been made in Europe and the U.S. with the purpose of cutting costs and increasing the scale of operations.

The move makes sense in Canada where regulations are more relaxed than in other countries, while the industry is mature there and there is plenty of capital to be spent. The nation’s regulations have allowed firms the opportunity to advance research without having to deal with the typical legal and political pitfalls that negatively affect growers and distributors in the U.S.

“The combination strengthens our capacity to service the rapidly expanding global medical cannabis markets, and amplifies our early-mover advantage,” Aurora Chief Executive Officer Terry Booth said in a statement.

ACBFF shares were down about 1.98% on Monday.

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