- Marijuana producer Cronos Group on Monday announced that it has sold its 19% stake in Whistler Medical Marijuana to rival Aurora Cannabis.
- Aurora issued stock to pay approximately 175 million Canadian dollars ($US131.4 million) for the stake.
- Watch Cronos Group and Aurora Cannabis trade live.
Aurora issued shares to pay approximately 175 million Canadian dollars ($US131.4 million) for the stake, which is subject to certain working capital adjustments and holdbacks. Cronos has received about 2.5 million Aurora shares worth about 24.6 million Canadian dollars and will receive another 7.6 million Canadian dollars upon reaching certain milestones, according to a statement.
“We’d like to thank and congratulate Whistler for their partnership over the past two years,” Mike Gorenstein, CEO of Cronos Group, said in the statement.
“Whistler’s commitment to creating high-quality products and establishing a premium brand has generated value for consumers and investors alike. We are proud to have been part of their growth and look forward to their progress through this venture.”
A wave of recreational-marijuana legalization last year – including in Canada and the state of Michigan, and the US Congress passing the Farm Bill, which legalised hemp, a key source of the ingredient cannabidiol – has sparked consolidation in the industry and triggered companies in other fields, such as beverages and tobacco, to enter the space.
In November, Constellation Brands, the beverage maker behind Corona beer and Svedka vodka, closed a 5 billion Canadian dollars ($US4 billion) investment in the Canadian cannabis producer Canopy Growth, giving it a 37% stake.
Early Monday, Cronos was trading up 1.54% and Aurora was higher by 0.33%.
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