Aurora Cannabis has acquired MedReleaf Australia for A$50 million through a combination of cash and shares.
The Canadian company, which previously held a 10% stake in the Australian operation, said full ownership of Indica Industries — the entity that trades as MedReleaf Australia — "solidifies our position in this rapidly growing market".
Aurora will contribute $9.45 million in cash, with the remainder of the purchase price paid in Aurora shares.
In a statement, MedReleaf Australia co-founders Russell Harding and Nathan Davis said: "We're proud to have built one of Australia's leading medical cannabis companies, thanks to our main supplier Aurora, dedicated investors, and dynamic team.
"Through our vision, we've connected clinicians with patients nationwide, positively impacting thousands of lives. This transaction marks an important step for MedReleaf Australia's ongoing growth, as we believe medical cannabis is now mainstream medicine, and we're grateful to be part of that story."
Aurora chief executive Miguel Martin described the acquisition as a "strategic milestone in Aurora's global cannabis leadership".
"[It] demonstrates our commitment to investing in markets that offer opportunities for sustainable and profitable growth," he said. "We are excited to solidify our position in this rapidly growing market and the opportunity this transaction presents to us in accelerating our plans to deliver positive free cash flow in calendar 2024."
The company's statement noted that MedReleaf Australia generated net revenue of approximately $40m for the year ending December 31 2023, and was adjusted EBITDA and operating cash flow positive.
Figures released by research firm NostraData last week showed MedReleaf captured nearly one in five medicinal cannabis sales across Australia in 2023.
Australian Securities and Investments Commission (ASIC) records show Harding holds a 44% stake in Indica Industries, while Sativa Operations — a business controlled by Davis — owns 18%.
The company was established in early 2018, originally structured as a joint venture with Canadian firm MedReleaf Corp.
Aurora subsequently acquired MedReleaf Corp for US$2.5 billion in May of that year and has maintained a 10% interest in the Australian business since then.
In an interview in late 2020, Harding said MedReleaf Australia was "fortunate to have the support of Aurora on a range of levels and a good supply line".
"You never know in this world what's around the corner, but certainly at this point we're comfortable with the relationship," he said.
"I think it's very much the case that some companies are skewing towards recreational cannabis, but Aurora still retains its strong focus on medical. It started as a medicinal cannabis company and it still is."
Aurora had also been a cornerstone investor in Cann Group but sold its remaining 12.5% stake in 2020.
