This morning, Aurora Cannabis Inc. (TSX:ACB) (NYSE:ACB) announced that it has entered into a Letter of Intent to acquire Farmacias Magistrales S.A, 'Farmacias.' Farmacias is Mexico's first and only federally licensed importer of raw materials containing THC. Today we'll take a closer look at this deal and the resulting Aurora stock movement.
Aurora Expands into Mexico
This announcement was first released back on December 7th. However, Aurora reached a final deal and is now acquiring all of the company's issued and outstanding shares. This new deal established Aurora's first-mover advantage in a country with over 130 million people. Now, residents of Mexico will have federally legal access to Aurora's non-flower cannabis products that contain THC. This is big news for the cannabis company and Aurora stock.
"This transaction positions Aurora with exclusive access to supply THC-containing medical cannabis to a large market of more than 130 million people, while also enabling us to capture the full margin of the medical cannabis we sell there," said Terry Booth, CEO of Aurora. "Farmacias has a large distribution network of both retail outlets and pharmacies, which will enable us to quickly scale up our operations across Mexico. Integrating Farmacias with our operations in Canada and Latin America will not only accelerate growth, it will build substantial long-term shareholder value."
Currently, Farmacias is the only company in the country with the ability to supple THC-containing products to medical patients in the country. In addition to its license, the company owns a 12,000 sq. ft. facility in Mexico City that is used for the production of pharmaceuticals. Now, this facility can hold the imported Aurora THC products.
Aurora Stock Movement
This morning, despite the positive acquisition announcement, Aurora stock is trading red on the NYSE. According to Yahoo Finance, ACB is trading at $5.71 a share on the NYSE, down -$0.03 (-0.59%). On the TSX, ACB is trading at $7.55 a share, down -$0.05 (-0.66%).
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