Curaleaf (CURA.T) is in a fight with Aurora Cannabis (ABC.T) and both sides are getting messy.
At the root of the fight: Curaleaf made a takeover bid for Aurora with a pretty good premium on offer. But Aurora execs think the offer underpays for the assets involved, and that Curaleaf has enough skeletons in its wardrobe (or debts on its bank balance, to be more precise) that the deal should be ignored.
Who’s right? Well, I think I’m in a decent position to say.
It’s been a while since I reported on the weed space but, back before 2019, I was basically the Canadian public markets weed guy, having spotted the first move to cannabis in the wild, and reporting on the scene ad infinitum, for five years to that point.
I tapped out on the space in 2018, right before the top of the market. Telling a full Cambridge House investor conference auditorium “now is the time to get out,” literally four days before the big crash the market has never since recovered from.
A lot of sector experts would have hung in, defending their meal ticket and telling folks there’d be a bounce back, but it was clear there wouldn’t be. The Canadian government didn’t really want a legal weed business in place, they’d been pushed into it by the courts, so they tied the industry in knots with needless red tape, taxes, and speedbumps, designed to prevent it from blooming. Those issues remain.
The Canadian cannabis business is dire. But that’s not to say there hasn’t been money to be made from some elements of the green rush. The bigger players continue to receive investment precisely because they’re big, the reasoning being, they’ll se their size to find an actual profitable business somewhere.. eventually.. probably..
Tilray is opening bars in Oregon. Canopy Growth collects brands. Aurora is still pushing medical use. And Curaleaf is taking an ‘everything, everywhere, gobble gobble gobble’ approach.
And the little guys struggle on.
But if you do an online search for ‘cannabis’, you wont find any of the big players in your first several pages of search results. You’ll find dry government research, you’ll find dispensaries, but no Tilray, no Canopy. It’s as if they’re big despite themselves.
But if we learned nothing else from the pre-2019 days, the best way to jack your share price up in the weed space is to buy competitors. When ‘being big’ matters more than being good, a takeover of top ten roster-mates makes sense. Buy market share, buy an investor base, shave off a little corporate spend, add a few B’s to your market cap, and get the enthusiasts paying attention.
So here we are.
The transaction:
Bidder: Curaleaf Holdings Inc. (TSX: CURA / OTCQX: CURLF)
Target: Aurora Cannabis Inc. (TSX/Nasdaq: ACB)
Type: Unsolicited/hostile takeover bid
Formal bid launched: August 18, 2026
Scheduled expiry: December 1, 2026, 5 p.m. MT, unless extended or withdrawn.
Curaleaf is offering Aurora shareholders:
0.3463 Curaleaf shares + US$0.75 cash for each ACB share.
Using Curaleaf’s August 10 closing price of US$9.39, that produced an initial implied value of approximately US$4.00 per Aurora share.
At the time of writing, ACB shares sit at US$3.81.
At the time of the offer, they were at US$2.75.
There is an important wrinkle: the consideration is capped at US$5.00 per ACB share. If Curaleaf’s 20-day VWAP exceeds C$17.05 at the calculation date, the number of Curaleaf shares issued per ACB share is reduced so the maximum consideration doesn’t exceed US$5.00.
The offer has no financing condition and no due-diligence condition, although it remains subject to regulatory and other customary conditions.
At first glance, that’s a decent premium to market.
What Curaleaf says ACB shareholders are getting
At announcement, Curaleaf calculated its US$4 offer as a 45% premium to Aurora’s 30-day VWAP of US$2.75 immediately before Curaleaf announced its intention to bid.
Curaleaf also markets this as a 110% “ex-cash” premium, because Aurora had approximately US$109 million of cash/equivalents, or about US$1.62 per share.
That second number needs an asterisk in anything we write. It’s mathematically useful, but 110% isn’t the actual takeover premium an ACB shareholder receives. The shareholder receives the roughly 45% headline premium based on the reference price; 110% is Curaleaf’s valuation argument after stripping Aurora’s cash from its market value.
Curaleaf says the offer values Aurora at approximately 12.0× estimated 2026 adjusted EBITDA, versus 7.1× for comparable Canadian peers and 7.6× Aurora’s standalone trading multiple.
The Curaleaf case against Aurora
Curaleaf’s September 8 fact sheet makes five major arguments.
- Aurora has destroyed a lot of capital. Curaleaf points to approximately C$5 billion of impairments and roughly C$130 million of business-transformation costs over the Martin era. Its takeover circular gives a slightly more specific figure: roughly C$4.65 billion of impairments between FY2020 and FY2026.
Aurora’s March 31, 2026 balance sheet showed about C$7.0 billion of share capital against a C$6.4 billion accumulated deficit. Curaleaf says about 72% of the deficit stems from acquisition impairments.
They ain’t lyin’. Aurora management bought a lot of things in an effort to, in my opinion, jack their share price more than their revenues. That’s been disastrous historically. - Aurora has burned cash while Curaleaf has generated it. Curaleaf says Aurora produced more than C$480 million of negative operating cash flow since FY2021, whereas Curaleaf says it generated US$447 million of positive operating cash flow since FY2021.
More recently, Curaleaf says it generated approximately US$145 million of operating cash flow in the 12 months ending June 30, 2026. - Aurora’s outlook is weakening. Curaleaf points to Aurora’s own FY2027 guidance, which anticipates lower revenue and adjusted EBITDA than the preceding year. Curaleaf’s argument is essentially that investors shouldn’t value Aurora on its recently completed “record” year when management itself expects deterioration. A fair point.
- Aurora keeps issuing stock using their at-the-market (ATM) facility, and Curaleaf says Aurora has raised more than US$400 million through equity issuance since September 2020, including through ATM programs, which has diluted shareholders.
The particularly aggressive Curaleaf argument is that Aurora has been issuing shares below Curaleaf’s takeover valuation while simultaneously telling shareholders that Curaleaf’s offer undervalues the company.
That’s probably the single most interesting point in this whole fight and the hardest for Aurora to defend. - Aurora wouldn’t negotiate. Curaleaf says Aurora never entered a confidentiality agreement, never discussed price and never proposed a counteroffer. Curaleaf argues the board therefore doesn’t know whether Curaleaf might have paid more. That’s probably a less winning argument in that Curaleaf capped their offer at $5 per share.
The Aurora case against Curaleaf
Aurora’s response is substantially different. In effect: we don’t need rescuing, the bid is cheap, and Curaleaf isn’t as financially healthy as it wants you to believe.
Its board unanimously recommends shareholders reject the offer, take no action and not tender their shares. Anyone who has already tendered is being encouraged to withdraw.
- Aurora is debt-free
This is the strongest contrast Aurora is pushing. Aurora describes itself as debt-free with a substantial cash position. By contrast, it says Curaleaf has more than US$1 billion of debt/financial obligations and lease liabilities, including US$500 million of senior secured notes carrying an 11.5% interest rate.
This is a strong point. There is a legitimate philosophical difference here:
Curaleaf: Aurora avoided debt by repeatedly diluting shareholders.
Aurora: Why should our debt-free shareholders exchange their shares for equity in a highly leveraged company?
Both statements can simultaneously have merit. When you dig in, Curaleaf would like to hold Aurora’s cash, and maybe reduce that debt, but Aurora holders might be a bit over Aurora continually diluting them to buy things it later rights off. - Aurora says its ATM isn’t a takeover defence
Curaleaf has attacked Aurora for issuing shares after the bid appeared.
Aurora says its ATM was actually established in February 2026, more than six months before Curaleaf launched its hostile offer, and was designed to finance growth, acquisitions and additional cultivation capacity.
Devil’s advocate here: Aurora would be hard pressed to justify their growth model when they have continually written off things they bought for growth.
Aurora also says the ATM: had been inactive for several weeks; wasn’t used for three years before February 2026;
has helped finance acquisitions in the UK. So Aurora disputes the implication that the ATM was created as an anti-takeover weapon.
What the combined company would look like
Curaleaf estimates the combination would create a cannabis company with:
- LTM revenue: >US$1.5 billion
- LTM adjusted EBITDA: nearly US$350 million
Pro-forma market capitalization: >US$3 billion - Expected annual cost synergies: at least US$40 million.
Curaleaf claims its global cultivation footprint is more than three times Aurora’s, with global production capacity approaching six times Aurora’s. The strategic fit isn’t difficult to see. Aurora brings medical cannabis, genetics, cultivation and an established international medical business. Curaleaf brings much greater scale plus distribution, pharmacies, clinics and patient access infrastructure.
Honestly, this is the most obvious case to say yes to the deal.
Curaleaf itself
Curaleaf completed a 1-for-3 share consolidation in June 2026. Before the rollback it had roughly 698 million subordinate voting shares outstanding; afterwards that dropped to roughly 233 million.
As of September 11, they showed:
CURA: C$13.29 per share
Shares outstanding: 233.51 million
Market cap: approximately C$3.10 billion.
My opinion:
Aurora’s ATM use is potentially Curaleaf’s best argument. If Aurora’s board insists US$4 per share materially undervalues ACB while voluntarily selling ACB stock into the market substantially below that valuation, shareholders are entitled to ask why.
Aurora’s answer; that it has financed acquisitions at attractive returns, is not historically accurate. I’d want to see exactly how many shares they sold, at what average price, how much cash it raised, and what it bought with the proceeds, to warrant the dilution and discount to their internal valuation.
On the other hand, Curaleaf’s debt is the best Aurora argument against the deal. US$500 million at 11.5% means roughly US$57.5 million of annual interest on those notes alone, which gobbles up the synergy savings. Against US$145 million of LTM operating cash flow, that’s not trivial. Aurora shareholders aren’t simply receiving “better Curaleaf paper”; they’re accepting exposure to that balance sheet.
That said, the US$5 cap deserves more attention than Curaleaf gives it. ACB holders get CURA equity precisely because they’re supposed to participate in the upside of the combined company. Yet if CURA rises sufficiently before closing, the exchange ratio begins adjusting downward. That limits some of the benefit shareholders would normally expect from a fixed exchange ratio.
Lastly, there’s an interesting contradiction on both sides. Aurora says its stock is worth substantially more than Curaleaf’s offer while selling some of that stock for less. Curaleaf says its cash generation comfortably supports its leverage while paying 11.5% on US$500 million of secured debt.
My honest takeaway here is what it was before all this started; these companies are only as big as they are through first mover advantage, and maintain that through the fallacy that investing in a large company is a faster way to riches than investing in a small company.
At their core, they are poorly run enterprises that have blown through insane amounts of shareholder wealth to get where they are.
Or, to put it another way, ‘the fastest way to make a billion dollar cannabis company is to spend five billion.’
That said, Aurora shareholders should take the deal. The Curaleaf debt doesn’t matter this year, or next, or even the next, if they bring in Aurora’s cash to pay for it. And the completed deal will see CURA’s share price elevate, long after the $5 cut-off, because that’s how these things go.
I have little confidence either company will do much in the coming years, as US legalization isn’t happening under a Republican government that is philosophically against it, nor a Democratic government, as they’ll keep weed legalization as a wedge issue but never do anything towards it.
So, just as I would have said in 2019.. sell.
— Chris Parry
