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Premium pricing of Whistler’s organic cannabis part of allure in $175-million Aurora deal | Financial Post

Aurora Cannabis Inc. — the third largest Canadian cannabis company by market value — has signed a $175 million all-stock deal to buy up mid-sized licensed producer Whistler Medical Marijuana Corp., a privately held cannabis grower in B.C.

Aurora is pegging the purchase as a product and brand play — the company is particularly interested in the full suite of Whistler’s organic cannabis products and the brand recognition it has built up as one of the country’s first licensed producers to sell to the medical market.

“Their organic brand generates a lot of respect in the community,” said Cam Battley, Aurora’s chief corporate officer. “Most of their organic products are already commanding premium price in the medical and adult-use markets, so we also see this as an opportunity to be the first company to bring organic cannabis to the international market.”

It’s hard to know if the deal is expensive because they did not disclose how much of it is a milestone payment,” said Bottomley. “But if you assume the whole purchase price of $175 million is the base purchase price, it’s still less expensive than their stock. So I like it, but I still won’t call it cheap.”

Aurora’s share price has dropped dramatically since legalization, losing more than 40 per cent of its value since a mid-October peak of approximately $15. The shares were up slightly at $8.68 in midday trading in Toronto.

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Premium pricing of Whistler’s organic cannabis part of allure in $175-million Aurora deal | Financial Post.

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