Aleafia is acquiring Emblem in an all-stock deal worth $173 million, a deal that marks the first significant cannabis industry takeover since Canada legalized recreational pot in October.
The deal will combine two mid-tier cannabis producers into a significant player in the medical marijuana space while providing Aleafia with an entry into the nascent recreational cannabis market that Emblem already operates in.
"There were other players out there in the market but some were more recreationally-focused or they weren't known for taking care of their patients," said Benjamin Ferdinand, chief financial officer at Concord, Ont.-based Aleafia, in a phone interview with BNN Bloomberg.
"On that basis, the ones that did fit were larger and in our view, we needed to consolidate to get there. With that said, Emblem was a natural fit."