A $2.3 billion merger has created the world’s largest marijuana company — and it’s a sign of a dealmaking boom in the sector

marijuana company

Aurora Cannabis bought Medreleaf in a $2.3 billion stock deal — the largest cannabis merger ever.
It’s a sign that M&A is heating up in the cannabis space.
The deals are driven by the excitement around legalization, competition for scale, and specific expertise on the medical side of the sector.

A dealmaking boom in the marijuana sector is ramping up as excitement around legalization grows.

Aurora Cannabis, one of the largest Canadian growers, bought its rival Medreleaf for a $2.3 billion stock deal, the companies announced in a joint statement on Monday. The combined firm will be the largest cannabis company by market cap, leapfrogging its chief rival, Canopy Growth.

The behemoth will produce a total of 1.25 million pounds of cannabis in its facilities and will have access to the increasingly important European market.

The deal is one of many to pop up in the cannabis sector in recent days.

“Merger Monday, a Wall Street adage, is back in vogue but in a new space, the cannabis sector,” said Morgan Paxhia, Chief Investment Officer of cannabis industry-focused hedge fund Poseidon Asset Management.

With the ink barely drying on the Aurora-MedReleaf deal, a consortium of four cannabis companies — Baker Technologies, Sea Hunter, Brightside, and Sante Veritas Therapeutics — announced a merger on Tuesday, operating under the name TILT. The new conglomerate will list on the CSE, a secondary Canadian exchange.

Here’s a rundown of the other major Monday announcements:

Canopy Growth announced it would seek to list on the NYSE and begin trading shares at the end of May (pending approval), amid a wave of excitement about marijuana legalization sweeping the US.
Green Thumb Industries, a Chicago-based cultivator, announced it’s going public through a reverse-takeover agreement with the Toronto Stock Exchange-listed Bayswater Uranium Corporation. The new public …read more

Source:: Business Insider


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