Canadian company Aurora Cannabis Inc. ACBFF on Wednesday signed a binding agreement to acquire CannaRoyalty's exclusive license to Wagner Dima's innovative cannabis preroll technology.
What Happened
CannaRoyalty CNNRF is licensing the technology in exchange for $7 million in Aurora stock.
Privately owned, Nevada-based Wagner Dimas developed rolling machines that precisely form cannabis rolls and cones; 5 million rolls and cones were produced last year, according to the announcement.
Aurora said it offers whole-flower cannabis, milled cannabis, cannabis oils and vaporizers — but nothing of the prerolled variety.
The $7-million deal pairs a major cannabis supplier with a technology manufacturer.
"This successful liquidity event for one of our early investments validates our approach as a strategic investor in the cannabis industry, while at the same time providing us with equity exposure to Aurora’s future growth,” CannaRoyalty CEO Marc Lustig said in a statement.
Aurora CEO Terry Booth said the company looks forward to introducing the preroll technology to the Canadian market.
Why It's Important
This collaboration comes at key time for both medicinal and recreational cannabis. In June, the Cannabis Act was passed in Canada, allowing for the legal use of recreational cannabis nationwide.
Thirty states in the U.S. currently have laws allowing the use of cannabis in some form. For residents in Michigan, a ballot question on marijuana legalization is set to appear on the November ballot.
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