Australia's biggest medicinal cannabis company, Cann Group, is believed to be in the crosshairs of its largest shareholder.

Street Talk understands Canada's Aurora Cannabis Inc – that country's second largest cannabis company with a $C4.3 billion market capitalisation - is considering a formal approach to Cann Group's board about a takeover. Sources suggested there had been informal engagement between the two parties.

Aurora's interest is believed to be pegged at about $4.50 a share, which would value Cann Group at about $500 million.

Cann Group suitor Aurora has been mopping up cannabis companies in the past six months. Gary Malerba

The company's shares last closed at $2.99, but hit a record high just above $4 in January.

Aurora is expected to offer scrip for Cann Group, which would ensure a two-way due diligence process should the ASX-listed cannabis company determine it is in their shareholders' best interest to explore a tie-up.