Agree
@elit
The market is finding it hard to digest the value in these significant deals, given the perceived high value paid.
I have stated before, the prices paid, are high, but well inline with deals being done around the world now.
The deal below is huge in comparison?
Aurora to buy MedReleaf for $2.5 billion in biggest ever pot deal
John Benny,
Nichola Saminather
3 Min Read
(Reuters) - Aurora Cannabis Inc will buy rival MedReleaf Corp for C$3.2 billion ($2.51 billion) in the biggest deal yet to unify major Canadian pot growers, as the country moves toward legalizing marijuana for recreational use.
The deal announced Monday is the latest in a wave of mergers in the industry as marijuana producers — emboldened by pot legalizations in Europe and a number of U.S. states — seek to cut costs and gain scale.
Canada’s relaxed regulations, a mature industry and free-flowing capital have offered firms a unique opportunity to advance research without the legal and political risks that bog down growers in the United States and elsewhere.
Canadian regulators have granted over 70 firms licenses to produce and sell medical marijuana, with more than half granted in 2017 or 2018.
Aurora and MedReleaf together expect to produce over 570,000 kilograms per year of cannabis through nine facilities in Canada and two in Denmark.
“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.
Related Coverage
Canada is one of the few countries that exports marijuana, allowing growers to take immediate advantage of recent medical pot legalizations in more than 20 countries. The worldwide legal marijuana market is expected to generate revenue worth $146.4 billion by end of 2025, according to California-based market consultancy by Grand View Research.
“(Aurora is) targeting mostly Europe for exports ... the demand is firmly in place, in terms of their medical market,” said Alan Brochstein, founder of cannabis-industry information provider 420 Investor.
“(Europe has) perhaps a better program initially in terms of insurance coverage and distribution through pharmacies,” he added.
The acquisition is Aurora’s second large deal this year, coming just months after it bought CanniMed Therapeutics for C$1.1 billion.
Shares of Aurora and MedReleaf each rose 1 percent on Monday morning on the Toronto Stock Exchange.
Aurora shareholders will own about 61 percent of the combined company, following the all-stock deal. Aurora offered to buy each MedReleaf share for C$29.44, representing an 18.2 percent premium to MedReleaf’s Friday closing price.
Aurora would likely sign more deals, but not any as big as the MedReleaf acquisition, Booth said at a media conference in Toronto. The company would also consider listing its shares in New York, he added.
“Aurora has ... been pretty aggressive with their expansion plans but now shareholders will want to see those assets being put to use before the company rushes out and buys something else,” said Bruce Campbell, chief investment officer at Cannabis Growth Opportunity Corp.
Reporting by John Benny and Yashaswini Swamynathan in Bengaluru; Editing by Arun Koyyur and Sai Sachin Ravikumar
The above deals I believe certainly justify the prices paid by QBL for MCL and Medcann, within an industry standard, that is most certainly running hot right now. Everyone is paying way too much?
Is it truly a good deal for retail holders??
As suggested above, and like always, if you got in at the right time, you are sitting pretty, if you paid 11.5 cents right at the top of this, then you would be felling pretty worried?
It is like that for all stocks, only the individual, can make these decisions, of when to buy and sell, and people need to be much more realistic on where they believe a company is and where it could go, before making a decision to buy.
QBL NEEDED to get a licence, they paid not in CASH, but shares, Is it a high price for a licence, not if it works long term, I think that Medcan is a good deal for QBL on that basis.
Is the MCL deal a good deal, again I think, on a no cash basis, means for Andrew and co to earn any real money out of this, they HAVE TOO perform over the long term.
If this industry, does in Australia, what many believe, and QBL is a market leader, long term all should be well, and people who have brought in this at the top of the market, will eventually be rewarded.
But, a LOT of hard work and a fair bit of luck is required to make all this happen.
Just like a look of spec stocks??
