According to Market Watch, Aurora Cannabis is acquiring U.S.-based CBD business Reliva, a move that will guarantee to Aurora a business presence in America.
Shares of Aurora closed off nearly 13% ahead of the Wednesday afternoon announcement. The stock surged higher in after-hours trading.
However, over the past 12 months, Aurora has lost nearly 90% of its stock market value as of Wednesday’s close.
Reliva stakeholders will be compensated with $40 million in Aurora shares, which have doubled im value since the company reported a narrower quarter-over-quarter loss. The acquisition is expected to be completed in June.
The deal is part of Aurora’s near-term strategy to attain profitability in the next fiscal year and broader objective of steppimgo into the U.S. Cannabis market. Reliva has no debt, and it’s an operation that guarantees access to 20,000 retailers, among which also convenience stores, and strong relationships with the main U.S. wholesalers and distributor.
Since the legalizatiom of recreational use in 2018, marijuana sales in Canada have been lower than expected, but according to the Brightfield Group, CBD sales are foreseen to grow up to $24 billion in U.S. retail output by 2025. However, the road ahead of Aurora Cannabis’ latest business move may reveal itself to be a bit bumpy, due to the FDA’s position on edible CBD and the correlated price drop that theae type of products have seen in the last few years in the United States.