Yesterday, the Ontario Securities Commission (OSC) issued a notice of hearing to consider the application filed by Cannimed Therapeutics (CMED.TO) (CMMDF) to intervene in Aurora Cannabis’ (ACB.TO) (ACBFF) attempted acquisition. The OSC will hold a hearing to consider CanniMed’s application on December 20th.

CanniMed does not want this acquisition to take and place and the marijuana producer has been working on getting this deal rejected. The Aurora acquisition makes sense from a business standpoint and the combined company will be a very attractive business.

If this acquisition is rejected, we expect to see shares of CanniMed move significantly lower and this potential pullback will create a great opportunity for new investors. We expect to see the acquisition completed and would be surprised if the OSC rules in CanniMed’s favor.

CanniMed and Aurora: An Attractive Opportunity

We would be bullish on the combined company and see tremendous opportunity for synergies. Both companies are laser focused on two of the most significant trends in the cannabis industry, international markets and cannabis oils.

The trend toward smokeless marijuana products continues to increase and CanniMed was an earlier adopter to this. The company was one of the first to receive a license to sell cannabis oils from Health Canada and produces cannabis in a GMP compliant facility. CanniMed also offers a gelcap product and is developing new smokeless products (i.e. dissolvable thin wafer).

CanniMed is focused on physician education and the distribution, sale and marketing of medical cannabis products through its agreement with PharmaChoice, a member-owned cooperative that represents more than 700 independent pharmacy owners across Canada.

Aurora Provides the Resources to Support CanniMed

One of the reasons why we are favorable on the potential of the combined company is due to the support that Aurora would provide CanniMed. Over the last year, Aurora has made several investments and acquisitions that would benefit CanniMed’s business.

Aurora has a war chest of a cash, strategic relationships, and significant infrastructure in Canada and abroad. While CanniMed has sold some of its cannabis oil in Australia and the Cayman Islands, Aurora has significant relationships and investments in Germany and Australia. If this deal is completed, Aurora would significantly enhance and expand CanniMed’s global reach.

Aurora has made strategic investments in Hempco Food and Fiber Inc. (HEMP.V) and Radient Technologies (RTI.V), which would significantly benefit the combined company. Industrial hemp grown by Hempco contains efficient extractable quantities of cannabidiol (CBD). Through Radient Technologies, Aurora can produce CBD-based products at scale, providing a considerable competitive advantage in addressing the burgeoning CBD oil market.

The Combined Company Can be a Global Leader

We are favorable on these relationships and the benefit they would have on CanniMed’s cannabis oil business. The combined company would have the capital and resources to execute on the global medical marijuana market and we are bullish on this opportunity.

When it comes to Aurora Cannabis and CanniMed, the whole is greater than the sum of its parts. We will monitor how this situation evolves and if you have any questions, please reach out to support@technical420.com