CanniMed Therapeutics Inc. said Wednesday it needs time to review a surprise takeover offer from a rival marijuana producer that sent its share surging on another volatile trading day for pot stocks amid speculation a wave of consolidation is coming.

"We advise shareholders to take no action until such time as the board has had the opportunity to fully consider and make a recommendation regarding the unsolicited offer," CanniMed (TSX:CMED) said in response to the bid made public by Aurora Cannabis Inc. (TSX:ACB) after the close of markets on Tuesday.

Vancouver-based Aurora announced an all-share offer valuing CanniMed's stock at up to $24 per share that it said already has support from shareholders representing 38 per cent of CanniMed's outstanding shares.

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Aurora said it submitted a proposal to CanniMed's board of directors Monday and has given the company until Friday to respond. If the board doesn't respond, it said it plans to launch a formal takeover bid.

But CanniMed said that it has not received a formal written offer from Aurora, adding it would review the terms set out in the press release and respond by the Friday deadline.

CanniMed cautioned that it considered Aurora's estimates of how much the share-exchange deal was actually worth to CanniMed shareholders to be inflated, since Aurora's valuation per share is based on its stock price as of Nov. 14 after a 125 per cent increase over the preceding 12 trading days.

Following news of the proposed deal, CanniMed's share price shot up $4.50 or 29.4 per cent to close at $19.80, while Aurora closed down $0.19 or three per cent at $6.22.

CanniMed also said it is already in talks to acquire marijuana company Newstrike Resources Ltd., a producer endorsed by members of rock band the Tragically Hip.

Marijuana analyst Vahan Ajamian said this latest deal could spark merger and acquisition activity among the around 50 licensed producers in the burgeoning industry ahead of recreational legalization, slated for July 1.

"This could spark a wave of consolidation with the larger players 'gobbling up' the smaller ones," said Ajamian in a note.

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PI Financial Corp. analyst Jason Zandberg said he wasn't sure if the deal would spark consolidation, but that it make sense to build scale ahead of next July.

"If you can build scale, then not only can you guarantee supply numbers, but you also have a bit better negotiating power," said Zandberg.

But he said any deals would likely be shared-based ones within the industry, like Aurora's proposal, since cannabis stocks have climbed so much in recent months.

"The absolute value of the market cap of these companies would scare off a lot of outsiders from buying."

He said the deal looks to make a lot of sense from both sides, but given CanniMed's response it could go hostile.

Current valuations mean that for some companies it would make more sense to simply build their own facilities, said Chris Damas, editor of the BCMI Report.

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"You can build square footage at a lower price than you can buy it on the stock market, the difference is quite astonishing."

He said CanniMed offered some particular attractions to Aurora, including licensed soft oil gel capsules, a foothold in Saskatchewan and expanded facilities that haven't yet been reflected in its financials.

If Aurora's acquisition is successful, it would boost its market capitalization to more than $3-billion and would see it serve about 40,000 active registered patients. That compares to 63,000 at Canopy Growth Corp., Canada's largest marijuana company.

CanniMed, previously Prairie Plant Systems, was one of the first medical marijuana companies to be granted a Health Canada licence to produce in 2013.