Aurora Cannabis shares spike in early trading following Reliva CBD takeover

Earlier this month, one financial writer described the company as the poster child of the legal weed industry’s woes.

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Is an Edmonton-based licensed weed producer the Lazarus of the Canadian cannabis world?

Just as Christians believe that Jesus restored the Catholic saint back to life four days after his death, investors are breathing new vitality into Aurora Cannabis Inc. after its stock plummeted over the past year.

As of this writing, Aurora shares are trading at $22.30 on the Toronto Stock Exchange, up nearly 25 percent from yesterday’s close. A week ago, the stock was just $8.39.

On May 11, Aurora Cannabis went through a reverse 12:1 split to avoid being removed from the New York Stock Exchange because it was well below its listing threshold of US$1.

That came six days after Motley Fool writer Sean Williams described Aurora as the poster child of the legal North American pot industry’s woes.

This morning’s share-price spike came a day after Aurora Cannabis announced that it had reached an agreement to buy Natick, Massachusetts–based Reliva, which sells hemp-derived CBD products.

The deal involves the transfer of US$40 million of Aurora Cannabis shares. Reliva shareholders could receive up to US$45 million in shares and cash if the CBD producer meets certain unspecified financial targets.

“Together, Aurora and Reliva will partner to create an international cannabinoid leader that we believe can deliver robust revenue and profitable growth,” Aurora chair and interim CEO Michael Singer said in a news release. “We have taken the time necessary to carefully assess the company’s entry into the U.S. market and we firmly believe that the combination with Reliva will create significant long-term value as Reliva provides us options to grow in hemp-derived CBD internationally.”

Charlie Smith

I'm the editor of the Georgia Straight newspaper in Vancouver, as well as a CannCentral contributor.

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