Aurora Cannabis announced that the company has entered a letter of intent to acquire Farmacias Magistrales.
Canadian cannabis producer Aurora has officially entered a letter of intent to buy all of the company’s outstanding shares in an all-stock deal.
This decision came only a little after Aurora announced a supply deal with Mexico’s Farmacias Magistrales.
Farmacias Magistrales was initially interested in working with Aurora on supplying the Mexican market, which is why they first signed the supply deal.
The Mexican company also holds the only license to import medical marijuana into Mexico, as well as licenses to store raw CBD and THC materials and manufacture and distribute CBD and THC products.
Farmacias Magistrales also owns a 12,000-square-foot facility for the production of pharmaceuticals.
They are well networked as they have the potential to reach out to over 80,000 retail outlets for CBD items, and over 500 dispensaries and hospitals nationwide as well.
Aurora Cannabis stock is moving up
The company stock has been going down for a while now, ever since it hit $15 CAD on October 15th, in fact. Currently, it’s just under $8 CAD.
Even though it may seem as if the company lost a lot of its value, many say that this recent slump is due to an overvaluation that happened earlier in the year.
It touched down at around $6.21 CAD about a week ago and ever since it’s been going up.
Many are contributing this recent rise in the share price to the fact that Altria, producer of Marlboro, has announced a deal with Cronos Group. This news gave a boost to the pretty much whole cannabis sector.
Seeing how the deal between Aurora and Farmacias Magistrales is an all-stock deal, it will contribute to diluting the value of the stock.
Many market analysts have brought up Aurora’s buying trend this year, describing it as a blatant disregard for shareholder value.
Chief Corporate Officer Cam Battley said this summer that Aurora is in the middle of what is “essentially a land grab” meaning that we could expect more dilution and all-stock acquisitions.