The deal comes two months before cannabis is expected to be legalized for recreational use in Canada, and is the latest in a wave of mergers in the industry as marijuana makers — emboldened by similar moves in Europe and a number of U.S. states — seek to cut costs and gain scale.
“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.
The acquisition is Aurora’s second large deal this year, coming just months after it bought CanniMed Therapeutics for C$1.1 billion.
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 companies said.
Markham, Ontario-based MedReleaf sells dried cannabis and pot-based oils and capsules in Canada.
Aurora shareholders will own about 61 percent of the newly 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.
Separately on Monday, Aurora’s chief rival Canopy Growth said it would buy out a stake in a British Columbia joint venture and also announced a plan to list its shares on the New York Stock Exchange.