Two Canadian cannabis manufacturers have decided to merge, creating a $6-billion corporation in preparation of the legalization of recreational marijuana use that will take effect this summer. The merger, in which Aurora Cannabis bought out the smaller grower CanniMed, will place the companies in a strong position as they gear up for the influx of new consumers.
The merger took an incredible amount of negotiations, lasting six days and ending with an all-night push before the final go-ahead on January 24.
“This is an excellent outcome for both Aurora’s and CanniMed’s shareholders after a hard-fought and diligently negotiated process,” said Cam Battley, Aurora’s Chief Corporate Officer in a news release. “We now look forward to warmly welcoming CanniMed’s employees and forging one unified team. Together, under the Aurora banner we’ll continue to invest in domestic and international growth, and continue executing on our strategy of building the most dynamic, innovative, integrated cannabis company in the world.”
Aurora Cannabis made it’s bid back in November, offering $24 per share for existing shareholders of CanniMed, the negotiations would push Aurora Cannabis to up their offer to 3.4 Aurora shares per 1 CanniMed share, equating to $47 per share.
“A testament to the great team at CanniMed, this transaction clearly confirms that the company has been highly successful in becoming a preeminent global leader in the medical cannabis industry,” said Brent Zettl, President and CEO of CanniMed in the news release. “In this leadership position, CanniMed has provided invaluable education, resources, support and relief of symptoms for thousands of patients served around the globe.”
In merging the two growers, Aurora Cannabis becomes Canada’s most valuable marijuana company. This is the largest deal to date in Canada’s emerging cannabis-sector.
Additional to the merger, the Niagara region is also seeing a shift due to marijuana legalization. Niagara College hosted a panel last week to discuss pot legalization and its effects on the region. The speakers suggested that with six licensed facilities, over two million square feet of cultivation space. With another million set to come within a year, the region and Niagara College could become a global contender in the new sector as well.
However, despite the growth within the new market, the legalization of recreational marijuana is the cause for some distress in other industries.
Ontario landlords are looking to gain the right to ban the use of pot from their properties, which would mean they could change existing rental agreements.
Much in the same way that tobacco use can be banned, landlords will have the option to include a ban on pot use on their properties when leases need to be renewed. This does not apply for existing leases which cannot be changed by law.
This is problematic when looking at the possibility of damage to properties during the time that leases aren’t amended to include non-usage. The cost to remove marijuana smells from apartments is estimated to be between $5,000 and $6,000.
However, many feel that this leaves recreational marijuana users with fewer places to smoke, especially due to the restrictive rules that are already been in place for the drug. Recreational users will not be able to consume the product in public places and are only allocated to do so on their own personal properties, unlike medical marijuana use, which is delegated to the same restrictions as tobacco use.
The province is currently in the midst of seeking feedback over possible outdoor vaping/smoking areas in designated multi-unit residences, however in the meantime, the debate between landlords and marijuana users continues.