Cronos producer sells shares to competitor Aurora

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Cronos sells 19% stake in Whistler Medical Marijuana Corp. to Aurora Cannabis for 175 millions of Canadian dollars in option to purchase

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

To pay, Aurora has released approximately 175 million Canadian dollars of shares (131,4 US $ M) for its participation, which is subject to certain fund adjustments and holdbacks. Cronos has received approximately 2,5 million Aurora shares valued at approximately 24,6 million Canadian dollars and will receive 7,6 million additional Canadian dollars when certain milestones have been reached, 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 building a superior brand has created value for consumers and investors. We are proud to have been part of their growth and we look forward to their progress in this endeavor. "

The wave of recreational legalization last year, including in Canada and the state of Michigan as well as the adoption by the US Congress of the Farm Bill, which legalized hemp, a key source of cannabidiol, has resulted in industry consolidation and encouraged companies in other areas, such as drinks and tobacco, to enter this market.

Last November, Constellation Brands, the beverage company behind Corona Beer and Svedka Vodka, has made an investment of 5 Canadian Dollars with Canadian producer Canopy Growth, giving it an 37% stake.

In December 2018, Altria, the Marlboro cigarette manufacturer announced plans to invest 2,4 billion Canadian dollars (1,8 billion) in Cronos.

In January 2019, Tilray stated that it was planning to acquire the Natura Naturals grower. In February, the company announced that it would acquire Manitoba Harvest, the largest hemp food company in the world.

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

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