As we noted frequently, Aurora Cannabis Inc (OTCMKTS:ACBFF) has been almost certainly the most aggressive “predator” among big league participants in the Canadian cannabis patch. One of the signature flags of this status is surely the company’s recent deal to acquire MedReleaf, a company with a market value greater than $2B today. Some worry developed following the deal that regulators might start to preempt risk of monopolization in this emerging industry. Well, worry no more.
The company just announced that the Canadian Competition Bureau has issued a no-action letter under the Competition Act (Canada) indicating that it does not intend to challenge the proposed arrangement between Aurora and MedReleaf, whereby Aurora intends to acquire all of the issued and outstanding common shares of MedReleaf. According to the release, “the Arrangement remains subject to customary closing conditions, including approval by each of Aurora shareholders and MedReleaf shareholders at shareholder meetings scheduled to be held on July 18, 2018, and final court approval. Subject to satisfaction of these closing conditions, the Transaction is expected to close later in July, 2018.”
Aurora Cannabis Inc (OTCMKTS:ACBFF) is a licensed producer of medical marijuana pursuant to the Marijuana for Medical Purposes Regulations and operates a 55,200 square foot expandable state-of-the-art production facility in Alberta, Canada.
ACBFF’s wholly-owned subsidiary, Australis Capital Inc., seeks to be an active participant in the U.S. Cannabis market. Aurora is trading on the Canadian Securities Exchange under the trading symbol “ACB”. The company is headquartered in Vancouver, Canada.
According to company’s materials, “Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations. The Company operates a 55,200 square foot, state-of-the-art facility in Mountain View County, Alberta, is currently constructing a second 800,000 square foot production facility, known as “Aurora Sky”, at the Edmonton International Airport, and has acquired, and is undertaking completion of a third a 40,000 square foot production facility in Pointe-Claire, Quebec, on Montreal’s West Island. In addition, the Company holds approximately 9.6% of the issued shares (12.9% on a fully-diluted basis) in leading extraction technology company Radient Technologies Inc., based in Edmonton, and is in the process of completing an investment in Edmonton-based Hempco Food and Fiber for an ownership stake of up to 50.1%. Furthermore, Aurora is the cornerstone investor with a 19.9% stake in Cann Group Limited, the first Australian company licensed to conduct research on and cultivate medical cannabis. Aurora also owns Pedanios, a leading wholesale importer, exporter, and distributor of medical cannabis in the European Union, based in Germany.”
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With further mojo supplied by this regulatory nod, the chart shows 13% added to share values of the company over the past week of action. What’s more, the name has seen interest climb, with an increase in recent trading volume of 10% above the average volume levels in play in this stock over the longer term.
As noted by the company’s most recent release, “The Arrangement has been unanimously recommended by the Aurora board of directors and the MedReleaf board of directors. Certain directors and officers of Aurora and MedReleaf have also entered into support agreements pursuant to which they have agreed to vote their shares in favor of the Arrangement. In addition, holders of approximately 56% of MedReleaf’s issued and outstanding common shares have entered into irrevocable hard lock-ups to vote their shares in favor of the Arrangement.“
As for Aurora’s target, MEDFF currently trades at a market capitalization of $2.1B with a significant war chest ($215.9M) of cash on the books, which is balanced by about $1.8M in total current liabilities. MEDFF is pulling in trailing 12-month revenues of $43.6M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 16%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $MEDFF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $MEDFF, either long or short, and we have not been compensated for this article.