Why CanniMed Therapeutics Inc. Soared 17.18% on Thursday

CanniMed Therapeutics Inc. (TSX:CMED) soared 17.18% on Thursday after announcing that it will discuss a possible deal with Aurora Cannabis Inc. (TSX:ACB). What should you do now?

| More on:


Canadian medical cannabis producer CanniMed Therapeutics Inc. (TSX:CMED) watched its stock roar 17.18% higher in Thursday’s trading session following its announcement that it has postponed its special shareholders’ meeting to vote on its proposed takeover of Newstrike Resources Ltd. (TSXV:HIP) in order to discuss a possible transaction with Aurora Cannabis Inc. (TSX:ACB).

So what?

Aurora had originally tried to acquire CanniMed in November, but CanniMed was not a fan of the deal and has done everything in its power to prevent it, including launching its takeover of Newstrike Resources and filing a $725 million lawsuit against Aurora, but it seems like the two sides are finally on speaking terms and will meet to discuss a potential deal.

Aurora has been accumulating shares of CanniMed since announcing its intention to take the company over on November 24, with its most recent press release showing an aggregate number of shares purchased at 700,600, which have a market value of approximately $22.84 million at the close of trading on Thursday, but it has agreed to not acquire any additional shares during the standstill period that will last until January 21 at 11:59 P.M. (EST).

Now what?

Cannabis is right up there with cryptocurrency and blockchain technology as one of the most-talked-about topics in the investment world today, especially in Canada, and it has been one of the most active in terms of deal making as well. I think a deal between CanniMed and Aurora would make the combined company an absolute powerhouse in the industry with far greater long-term growth potential, and it would give it elite status alongside Canopy Growth Corp. and Aphria Inc. in my mind, so I am definitely rooting for the deal to get done. 

With all of this being said, I would avoid making new investments in CanniMed or Aurora until we know more about the possible deal on January 21, so stay tuned!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joseph Solitro has no position in any stocks mentioned.

More on Investing

Aircraft wing plane

Prediction: Air Canada Stock Will Sit on the Runway for a While

Will Air Canada stock be able to continue to ride post-pandemic tailwinds, or is this stock pricing in an upcoming…

Read more »

Businessman holding AI cloud
Tech Stocks

Artificial Intelligence, Real Returns: Profiting From the AI Revolution

Tech companies like Shopify Inc (TSX:SHOP) are profiting from the AI revolution.

Read more »

Paper airplanes flying on blue sky with form of growing graph

Are Airline Stocks a Good Buy in December 2023?

Airline stocks are cyclical. So, interested investors should aim to buy low and sell high to target price appreciation.

Read more »

little girl in pilot costume playing and dreaming of flying over the sky
Stocks for Beginners

TFSA Investors: 3 Steps to Get Into Cross-Border Investing

Overseas trading can be scary. But if you follow these steps, you can certainly achieve far higher returns than just…

Read more »

Dividend Stocks

2 Top Telecommunication Stocks to Buy on the TSX Today

Two telco stocks, but not the dominant industry players, are buying opportunities on the TSX today.

Read more »

Business man on stock market financial trade indicator background.

Better Buy: Canadian Bank Stocks or Fintech Stocks?

Bank stocks like Bank of Nova Scotia (TSX:BNS) are often cheaper than fintech stocks.

Read more »

worry concern
Dividend Stocks

Is Now Actually the Right Time to Buy BCE Stock?

Looking for a great stock to buy at a serious discount? It’s the right time to buy BCE (TSX:BCE) stock…

Read more »

Illustration of bull and bear
Dividend Stocks

Defensive Sectors: A Safe Haven for Canadian Investors in a Bear Market       

As uncertainty continues to increase in the stock market, buying stocks in defensive sectors can help protect your capital.

Read more »