Canada ‘pot’ merger valued at $321M

Canopy Growth Corp., the largest company in Canada’s rapidly developing marijuana industry, agreed to buy competitor Mettrum Health Corp. for about $321 million to expand production as the government moves toward legalization.

The all-stock deal values Mettrum at $6.32 a share, the companies said Thursday in a statement, representing a 42 percent premium to Wednesday’s closing price.

Shares of marijuana companies rose in Toronto trading, extending huge gains this year, with Canopy’s shares quadrupling.

Canada’s plan to legalize recreational use in 2017 has attracted a wave of capital in anticipation of billions of dollars of new revenue.

Expectations were further heightened on Wednesday after the country’s Task Force on Marijuana Legalization and Regulation delivered a report to the government on how the drug should be legalized and regulated. The group said its recommendations will be made public in mid-December. The market value of Canada’s six largest marijuana companies has swollen to more than $2.7 billion.