Aurora Cannabis Expands South With Acquisition Of Farmacias Magistrales
Leading marijuana producer Aurora Cannabis Inc (NYSE:ACB) has announced plans to establish a foothold in Mexico through the acquisition of Farmacias Magistrales. The deal announcement comes less than one week after Aurora announced an exclusive supply agreement with Farmacias Magistrales.
Canada-based Aurora Cannabis will acquire Farmacias Magistrales SA through an all-stock deal. The exact value of the deal was not announced. The acquisition follows an agreement between Aurora Cannabis and Farmacias that calls for Aurora to supply the Mexican company with medical cannabis.
Prior to that, Farmacias Magistrales received the first and only import license for medical marijuana in the country.
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Why It's Important
Not only does Farmacias hold the only license to import medical marijuana into Mexico, it has also received licenses to store raw CBD and THC materials, as well as to manufacture and distribute CBD and THC products.
Farmacias has a strong distribution network across the country, with 80,000 retail points for CBD products and 500 pharmacies and hospitals for THC products. It has a 12,000-square-foot facility for the production of pharmaceuticals.
Although Aurora's latest acquisition is focused on the medical marijuana segment, the timing of the transaction should also be taken into account. In November, the country's constitutional court ruled that a blanket ban on recreational marijuana was unconstitutional. Soon after that, Sen. Olga Sanchez, President Andres Manuel Lopez Obrador's choice for interior minister, introduced a bill that would legalize recreational weed.
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