In roughly three weeks, the face of the global marijuana industry could change forever. Bill C-45 in Canada, better known as the Cannabis Act, is set for a vote in the Senate on June 7, with the strong likelihood that’ll it swiftly be moved along and signed into law not long thereafter. In doing so, Canada will become the first developed country in the world to have legalized recreational marijuana.
Opening the door to adult-use pot is expected to be quite lucrative to the legal cannabis industry. Forecasts are calling for approximately $5 billion in added annual revenue, which comes atop existing medical marijuana sales and export revenue. As a result, marijuana growers have been expanding their capacity as quickly as their balance sheets will allow.
No pot stock has expanded like Aurora Cannabis
Arguably the most aggressive of these expansion efforts has come from Aurora Cannabis(NASDAQOTH:ACBFF). Toward the end of 2017, Aurora was in the midst of constructing its flagship project, the highly automated, 800,000-square-foot Aurora Sky facility that was to be capable of producing 100,000 kilograms of dried cannabis a year. When added to existing, but considerably smaller facilities, Aurora Cannabis was expected to produce just above 100,000 kilograms a year.
However, 2018 has been a ridiculously active year for the company.
In January, Aurora partnered with…
tomato producer Alfred Petersen & Son in Denmark to retrofit a 1 million-square-foot facility to produce cannabis. When complete, the Aurora Nordic facility will be capable of 120,000 kilograms of cannabis a year. Aurora Nordic will primarily be responsible for supplying cannabis to Europe’s medical-marijuana-legal countries.
Recently, Aurora Cannabis completed its acquisition of Saskatchewan-based CanniMed Therapeutics, which added 20,000 active medical patients and 20,000 kilograms of production a year. When completed, it was the priciest marijuana acquisition in history.
And just last month, the company announced its intent to build a 1.2 million-square-foot facility, to be known as Aurora Sun, in Medicine Hat, Alberta. When complete, this facility will have the potential to produce 150,000 kilograms a year. Add this up, and we’re looking at roughly 430,000 kilograms of production per year.
Aurora announces the largest marijuana acquisition in history
And Aurora isn’t close to finished. On Monday, May 14, the company announced what has now become the largest marijuana acquisition in history, assuming it’s completed. According to the company, it’s acquiring Ontario-based MedReleaf (NASDAQOTH:MEDFF) for $2.5 billion in an all-stock deal. The 3.575 shares of Aurora for each MedReleaf share represent an approximate premium of 34%, based on the 20-day volume-weighted average prices for each company’s common stock.
Why is Aurora hell-bent on acquiring MedReleaf? For one…
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