Ottawa-based cannabis investment firm CannaRoyalty (CNSX:CRZ) has sold off a valuable license to Aurora Cannabis (TSX:ACB), giving the local company a stake in one of Canada’s largest pot producers.

CannaRoyalty announced Wednesday it will sell its exclusive Canadian licensing rights for a pre-roll cannabis technology to Aurora in exchange for $7 million worth of common shares in the Ontario-based producer. The platform, developed by Wagner Dimas Inc., allows cannabis companies to produce and package pre-rolled joints at scale.

"Pre-rolls are a rapidly growing, in-demand segment of the international cannabis market and the Wagner Dimas technology has substantial competitive advantages over peers in terms of throughput, quality and diversity," said Aurora CEO Terry Booth in a statement.

CannaRoyalty CEO Marc Lustig said in a statement that selling off the pre-roll license gives the firm’s shareholders some liquidity from an early investment and exposure to Aurora’s growth – shares in the licensed producer have risen nearly 300 per cent in the past year as legalized recreational use in Canada looms.

Shares of CannaRoyalty were up 1.6 per cent to just under $5 in trading Wednesday on the Canadian Securities Exchange.

In a separate deal, CannaRoyalty said Thursday that it had struck an agreement with California-based Pacific Remedy to manufacture and distribute its pre-rolled cannabis products through the Ottawa firm’s network of retailers across the west coast state.

Also on Thursday, the firm announced it had closed a previously-announced $33-million private placement funding round. An additional $2.98 million came from an exercised over-allotment option.