Marijuana stocks got a case of merger munchies as Aurora Cannabis agreed to gobble up yet another weed company Tuesday.
The Canadian marijuana producer will buy Anandia Laboratories for around $88 million in an all-stock transaction.
Anandia has a library of cannabis genetics, as well as in-depth genomic and chemical analysis. The firm’s cannabis testing business is to remain functionally independent under the deal.
Anandia Laboratories is in the midst of constructing a purpose-built Cannabis Innovation Centre on Vancouver Island. The 22,500-square-foot greenhouse facility and associated 10,000-square-foot lab will house its cannabis breeding and genetics program. It will now be able to complete construction quicker, as it will have access to more resources under the Aurora Cannabis deal.
“Partnering with Aurora, with their expanded financial resources, scientific expertise and multiple cultivation sites, will enable us to accelerate our current breeding efforts to create the next-generation of cannabis genetics,” Anandia’s co-founder and CEO Dr. Jonathan Page said in a press release.
Marijuana stocks were mixed on the stock market today, with Canopy Growth (CGC) up 0.1% and Cronos Group (CRON) down 2.7%. While they are the few pure-play marijuana stocks listed in the U.S., other companies have exposure to the market. Corona parent Constellation Brands (STZ) took a nearly 10% stake in Canopy last year. And Scotts Miracle-Gro (SMG) sells hydroponics equipment used by cannabis growers. Meanwhile, Aurora also has expressed interest in listing on the Nasdaq.
Marijuana Stocks Get The Munchies
Canada’s cannabis industry is rushing to consolidate ahead of recreational legalization this year. It is advancing ahead of its counterpart in the U.S., where cannabis remains illegal on a federal level.
Aurora Cannabis has been a big mover in the country’s fledgling marijuana industry. So far it has announced 14 other acquisitions in the past two years.
Most recently, it agreed last month to acquire rival marijuana producer MedReleaf in an all-stock deal worth $2.5 billion, marking the cannabis deal yet and positioning Aurora as the world’s biggest pot producer.
The Aurora-MedReleaf deal would give the company a footprint in Canada as well as Brazil, Australia, Denmark, Italy and Germany. Germany is set to become the world’s biggest nationally regulated marijuana market, Aurora Cannabis Chief Corporate Officer Cam Battley said during a conference call to discuss the deal.
The combined company would also have a bigger research team and be able to offer a broader range of marijuana products. Those include increasingly popular gels, topicals, and even dissolvable wafers.
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