(Bloomberg) -- Aurora Cannabis Inc., one of Canada's largest marijuana companies, plans to to spin off a subsidiary that will seek investments in the U.S.
Aurora said in a statement Wednesday that its domestic investors will receive stock and stock warrants for Australis Capital Inc. while non-Canadian shareholders will receive a cash distribution.
While Canada is set to legalize recreational marijuana -- a government bill won the backing of the country's Senate late Tuesday -- the picture is more complicated south of the border. There are 29 U.S. states that have legalized medical cannabis and nine others states plus the District of Columbia that have proceeded with consumer legalization. Cannabis remains a Schedule I controlled substance, but the opioid crisis has spurred a debate over whether federal marijuana laws should be enforced in states where production, distribution and use is legal.
"Recent changes in U.S. federal positioning with respect to cannabis have positively impacted the perception of risk to invest in U.S. cannabis assets," Aurora said in its statement. "Entering the U.S. market now, in compliance with regulatory requirements, represents a risk/reward balance that is attractive to a well-connected and funded operators.
To contact the reporter on this story: Simon Casey in New York at scasey4@bloomberg.net
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Joe Richter
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