Article by Kate Robertson, Lift News
Canadian licensed cannabis producer Aurora has reached an agreement with the board of directors at CanniMed Therapeutics to acquire the company in full after two months of intense negotiations.
CanniMed shareholders could receive 3.40 Aurora shares for each CanniMed share or a combination of shares and cash, to a maximum aggregate of $140 million. It’s the cannabis industry’s largest deal yet, valued at approximately $1.1 billion.
“A testament to the great team at CanniMed, this transaction clearly confirms that the company has been highly successful in becoming a preeminent global leader in the medical cannabis industry,” said Brent Zettl, CanniMed’s president and CEO, said in a statement.
In November, Edmonton-based Aurora launched a hostile takeover bid at $24 per share. According to a press release issued by Aurora, the new deal is a 79 per cent increase from the previous offer. Aurora announced their intentions as Saskatoon’s CanniMed announced its own plans to acquire Newstrike, the Tragically Hip-backed weed grower in Ontario. That deal is now not proceeding, but CanniMed will pay the company a $9.5 million break fee.
CanniMed was the first company to be licensed to produce cannabis under the old Marihuana for Medical Purposes Regulations (MMPR), but Aurora’s chief corporate officer Cam Battley says it was their purpose-built facility that aligned so well with the company’s plans to dominate both the domestic and European medical cannabis markets.
“If you take a look at all of our facilities, including our hybrid greenhouses, they are not like traditional greenhouses in that they’re a closed system with overpressure, meaning we have precision control over all of the critical environmental variables, from the lighting to the temperature to the humidity and the nutrients,” Battley said by phone. “And that gives us extremely good consistency of production and it also makes it easy for us to build and produce to GMP standards, Good Manufacturing Practices.”
Since receiving its license to produce cannabis in 2015, Aurora has rapidly expanded its production capacity. They operate Aurora Mountain, a 55,200 square-foot hybrid greenhouse in Mountain View County, Alta. and Aurora Vie, a 40,000 square-foot facility located in Pointe-Claire, Que. Aurora Sky will be an 800,000 square-foot hybrid greenhouse in Alberta’s Leduc County, near the Edmonton International Airport and the company also acquired Lachute, Quebec’s H2 Biopharma in November, giving them another 48,000 square feet of nearly completed purpose-built space near the Montreal International Airport, with more land to spare. Earlier this month, they secured a 17.62 per cent interest in The Green Organic Dutchman in Valley Field, Quebec. with access to a minimum of 20 per cent of what is produced.