Aurora Cannabis Inc, MedReleaf Corp Officially Cement Merger Agreement

Benjamin A. Smith
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Aurora Cannabis Inc (TSX:ACB) (OTCQB:ACBFF) (FRA:21P) and MedReleaf Corp (TSE:LEAF) (OTCMKTS:MEDFF) (FRA:MEW) have officially become one today, as per early afternoon press release. The combined entity now owns the world’s most extensive medical cannabis portfolio, chalk-full of assets and distribution reach which vault the company into preeminent market position.

The big news was made public at 1:45pm EST, with confirmation that holders of MedReleaf common shares had received 3.575 common shares of Aurora for each LEAF share held. Upon closing of the transaction, Aurora Cannabis will submit applications with the Toronto Stock Exchange and Ontario Securities Commission to de-list LEAF existing common shares and for MedReleaf to cease to be a reporting issuer. With that announcement, MedReaf Corp.—as a stand alone entity—has entered its final twilight as a public company.

The remainder of the press release was a reiteration of synergistic strength, but it bears repeating:

The combined science and R&D teams includes a roster of approximately 40 PhDs and MScs, who will be actively researching projects throughout the global cannabis industry. Aurora Cannabis has made a calculated bet that 2018’s acquisition spree will position itself as the dominant player in cannabanoid sciences intellectual property, which should filter down into several over-the-counter and pharmaceutical product lines over time.

The combined entity will have a combined funded capacity of more than 570,000 kg/annualized, spread across several Canadian provinces and international jurisdictions. That includes a world-class cannabis strain portfolio to help drive medical patient enrollment both domestically and abroad.

Aurora Cannabis has also procured instant higher market share, as MedReleaf has several existing supply agreements with the provinces and national retailers like Shopper’s Drug Mart. Aurora’s access to MedReleaf’s San Rafael ’71Woodstock, and AltaVie brands will give it among the most diverse product offering on recreational store shelves this October.

Final Thoughts

While it’s unclear where the stock goes from here—having already descended ↓25.85% since July 5—Aurora Cannabis has clearly put itself in ideal position for the upcoming retail market, international market share and future high margin product development.

With prices now reaching a 6-handle, we wonder how long it will be before large Canadian investment and pension funds start staking significant positions at discounted levels—if they aren’t doing so already.

Benjamin A. Smith

Benjamin A. Smith

Ben is a research analyst and capital markets professional with nearly 20 years of experience. His areas of expertise are broad-based, and include extensive knowledge of macro economics, stock/derivative trading, commodity complexes, cryptocurrencies and technical/quant analysis. He also maintains an particular affinity for U.S. politics and the macro-regulatory environment facing...
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