Shares of Aurora Cannabis (ACB) jumped 2% on Monday at the Toronto Stock Exchange after the Canadian pot company announced that it would acquire Farmacias Magistrales, Mexico’s lone licensed importer of THC products. THC, or Tetrahydrocannabinol, is a major psychoactive component in marijuana.
The acquisition comes just days after Aurora had set up an exclusive partnership with the Mexican pharmaceutical company to export its products.
The acquisition is significant, as it makes Aurora the first marijuana company to gain inroads into the 130-million Mexican population. Farmacias, meanwhile, will use the imported cannabis concentrates to make oil products as an initial introduction to the medical market.
Aurora CEO Terry Booth said, “Farmacias has a large distribution network of both retail outlets and pharmacies, which will enable us to quickly scale up our operations across Mexico. Integrating Farmacias with our operations in Canada and Latin America will not only accelerate growth, it will build substantial long-term shareholder value.”
Consideration of the agreement, the value of which was not disclosed, will be paid in shares of Aurora, based on a valuation of the proforma distribution revenue projections of Farmacias. The deal now awaits government and regulatory approvals.
US-traded shares of Aurora rose 0.4% on NYSE on Monday.
In its quarterly results last month, Aurora said its cannabis production jumped 400%, while revenue soared 260%. Earnings, meanwhile, skyrocketed over 2800% to CAD$104.2 million, compared to the same period last year. Shares were modestly up following the results.
Last week, rival Cronos Group received a $1.8 billion investment from cigarette maker Altria Group (MO). Shares of Cronos Group soared 22% at the Toronto Stock Exchange following news of the funding.