Cannabis company Aleafia said the deal will position the company as Canada’s largest national clinic network

The all-stock deal is valued at C$173.2 million

Aleafia Health Inc. (CVE:ALEF) announced Wednesday that it was scooping up medical cannabis company (CVE: EMC) (OTCQX: EMMBF) to expand its clinic network.

The Concord, Ontario, company plans to acquire all of Emblem’s issued and outstanding common shares in an all-stock deal valued at around C$173.2 million.

Emblem shareholders will receive 0.8 of an Aleafia common share for each Emblem share owned. Emblem’s shares will be valued at C$1.21, based on Tuesday’s closing price, representing a 27% premium.

Shares of Aleafia were down around 2.7% to C$1.44 by Tuesday’s close while Emblem shares dipped 5% to C$0.95. The stocks have not yet begun trading Wednesday morning.

The companies said the deal will position Aleafia as Canada’s largest national clinic network and enable the company to scale up operations, planning to see an annual capacity of around 138,000 kilograms.

“Emblem’s product leadership in the medical and adult-use sectors and highly coveted supply agreements will perfectly complement Aleafia’s cannabis production and clinic operations. This is a transformative transaction that positions Aleafia as a global cannabis leader,” said Aleafia Health CEO Geoffrey Benic.

Emblem’s Health Canada license grants Aleafia the ability to supply to the provinces of Ontario, Saskatchewan, British Columbia and Alberta as well as to enter into national medical distribution through and national retail distribution through Fire & Flower, Starbuds and OnePlant network.

Aleafia will also have access to Emblem’s high-margin derivative products, including capsules, oils and oral sprays.

Emblem’s board of directors and special committee has unanimously approved the deal.

Contact Lenore Fedow at lenore@proactiveinvestors.com

Follow her on Twitter: @LenoreMariee