Cronos producer sells shares to competitor Aurora

Cronos sells 19% of the capital of Whistler Medical Marijuana Corp. to Aurora Cannabis for C $ 175 million as a purchase option

Producer Cronos Group (CRON, ACB) announced on Monday that it has sold all of its shares, or 19% of Whistler Medical's shares, to rival Aurora.

To pay, Aurora released approximately C $ 175 million of shares or (US $ 131,4 million) for its interest, which is subject to certain fund adjustments and holdbacks. Cronos has received approximately 2,5 million Aurora shares valued at approximately C $ 24,6 million and will receive an additional C $ 7,6 million when certain milestones are completed, according to a statement.

“We would like to thank and congratulate Whistler for its partnership over the past two years,” said Mike Gorenstein, CEO of Cronos Group, in his statement.

“Whistler's commitment to creating high quality products and establishing a premium brand has generated value for consumers and investors. We are proud to have been a part of their growth and look forward to their progress in this endeavor. "

Whistler Medical Marijuana Corp, Mike Gorenstein, Cronos

The wave of recreational legalizations last year, including in Canada and the state of Michigan as well as the passage by the United States Congress of the Farm Bill, which legalized hemp, a key source of cannabidiol, led to industry consolidation and spurred companies in other areas, such as drinks and tobacco, to enter this market.

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Last November, Constellation Brands, the beverage maker behind Corona beer and Svedka vodka, has closed a C $ 5 billion investment with Canadian producer Canopy Growth, giving it a 37% stake.

In December 2018, Altria, cigarette maker Marlboro has announced plans to invest C $ 2,4 billion ($ 1,8 billion) in Cronos.

In January 2019, Tilray said it plans to acquire grower Natura Naturals. In February, the company announced it would acquire Manitoba Harvest, the world's largest hemp food company.

On Monday, Cronos was up by 1,54% and gained 131% over the last 12 months, Aurora was up by 0,33%.

source: Market Insider

Tags : BusinessExchangeMarijuana
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