Aurora Cannabis reiterated as overweight as Cantor Fitzgerald welcomes Reliva deal

Aurora Cannabis Buys Reliva, Enters US CBD Market

Aurora to enter U.S. market with US$40 million of acquisition of CBD brand Reliva

Cantor Fitzgerald reiterated its overweight rating on shares of Aurora Cannabis Inc. on Thursday and raised its stock price target to C$27 ($19) from C$22, after the company announced a long-awaited push into the US cannabis market, via the $40 million all-stock purchase of a cannabidiol maker called Reliva.

Aurora said the acquisition will provide several strategic and financial benefits, including a United States management team that has strong worldwide CPG backgrounds and a leading market position in hemp-derived CBD in the US. "But in a growth industry, we also judge companies based on the platforms they are building for future growth", said the note. The transaction represents the culmination of a multi-month strategic evaluation of the U.S. hemp-derived CBD industry.

"This is instant access to the world's largest CBD market", Michael Singer, Aurora's Executive Chairman and Interim CEO, told CNBC.

"We plan to capitalize on each company's market leadership and sales infrastructure to drive higher revenue growth than either company could independently accomplish".

If Reliva achieves certain financial targets, the transaction includes a potential earn-out of up to a maximum US$45 million payable in Aurora shares, cash or a combination over the next two years.

The transaction represents the culmination of a multi-month strategic evaluation of the USA hemp-derived CBD industry, according to Aurora Cannabis.

The company said the transaction will create a large and diversified pure-play worldwide cannabinoid company. The company said Reliva stood out from other CBD sellers given its focus on regulatory controls, national distribution footprint and "financial discipline".

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