May 22, 2020 1:57 pm
Last Updated: May 22, 2020 1:58 pm
The euphoria that followed the announcement Wednesday that Aurora Cannabis Inc. (NYSE: ACB) is acquiring Reliva LLC was subsiding Friday.
The Canadian marijuana stock shot up more than 30% on Thursday, closing at $17.40, after news of the deal with U.S. hemp retailer Reliva was released late Wednesday. But Aurora’s stock gains receded Friday, down just over 6% at midday.
Aurora will pay $40 million in stock, plus $45 million in stock or cash if financial targets are achieved. The acquisition allows Aurora to enter the United States and access its thriving CBD market. The purchase is expected to close in June.
The privately held Reliva is reportedly a profitable business, selling balms, creams, gummies, tinctures and beverages with hemp-derived CBD. Its products are available in more than 20,000 retail locations across the United States and online.
Looking for Profitable Growth
“Together, Aurora and Reliva will partner to create an international cannabinoid leader that we believe can deliver robust revenue and profitable growth,” said Michael Singer, Aurora’s executive chairman and interim chief executive. “We have taken the time necessary to carefully assess the company’s entry into the U.S. market and we firmly believe that the combination with Reliva will create significant long-term value as Reliva provides us options to grow in hemp-derived CBD internationally.”
Reliva’s chief executive, Miguel Martin, will remain with the combined company, becoming president of Aurora USA. “We were fortunate enough to be able to choose our long-term partner and believe this partnership provides a significant opportunity to accelerate sales growth for Reliva in the United States and internationally,” said Martin, who has 25 years of experience in consumer packaged goods.