Cronos sells Whistler Medical shares to Aurora Cannabis
The marijuana producer sells its stake in Whistler Medical Marijuana to rival Aurora.
Why is Cronos selling Whistler shares to Aurora?
Cronos has sold its shares in Whistler Medical, a medical marijuana company that produces 18 strains of pot and also sells CBD oil, to capitalise on the pot boom across the US and Canada. As the drug is legalised across much of North America, the growth in cannabis has led many marijuana companies to consolidate as a result.
In this strategic deal, Aurora will pay Cronos C$175 million for the stake in Whistler Medical. In return for the stake, Cronos will receive Aurora stock worth C$26.6 million dollars. Cronos will also receive an extra C$7.6 million shares based on the achievement of certain milestones after the acquisition.
Mike Gorenstein, chief executive officer (CEO), of Cronos, thanked Whistler for their partnership after selling the shares.
‘We'd like to thank and congratulate Whistler for their partnership over the past two years,’ said Gorenstein.
‘Whistler's commitment to creating high-quality products and establishing a premium brand has generated value for consumers and investors alike. We are proud to have been part of their growth and look forward to their progress through this venture,’ added Gorenstein.
Aurora CEO, Terry Booth, spoke about the expansion efforts the company wants to implement with its purchase of Whistler.
‘Applying certain of our best practices to the Whistler cultivation protocols, we anticipate an increase in capacity of the Pemberton facility beyond the stated 5,000 kg annual production target,’ said Booth in a statement.
What’s next for Cronos stock?
Cronos stock rose briefly before falling after Aurora acquired its shares of Whistler Medical. Though some investors say marijuana is a good investment and are bullish on the commodity, there is also concern about an oversaturation in the market. Cronos and Aurora hope that this consolidation will encourage investors to continue to invest in marijuana.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.