Cannabis ETFs Spike on Jazz-GW Pharma Deal – February 4, 2021

Cannabis stocks have been the biggest winners to start 2021 buoyed by hopes of wider legalization and near-term decriminalization as well as the growing adoption of marijuana in more states. The recent comments from several prominent politicians regarding cannabis reform legislation added to the strength (read: 5 Best ETF Investing Ideas for 2021).

In fact, several Democratic senators released a joint statement early this week signaling plans of pursuing new legislation to reform regulations in the United States. The latest deal activity in the space has strengthened the bullish case for these stocks. This is especially true as Jazz Pharmaceuticals (JAZZ Free Report) agreed to buy cannabinoid drug company GW Pharmaceuticals (GWPH Free Report) for $7.2 billion in cash and stock.

Deal in Focus

Per the terms of the deal, Jazz will pay $220 per American depositary share of GW Pharmaceuticals, including $200 in cash and $20 in Jazz ordinary shares. This represents a premium of about 50% over GWPH’s closing price on Feb 2, and 60% over its 30-day volume weighted average price. The deal is valued at $6.7 billion net of GW cash.

The combined company will be a leader in neuroscience with a global commercial and operational footprint. The deal will bolster GWPH’s efforts in developing, manufacturing and…

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Cannabis stocks have been the biggest winners to start 2021 buoyed by hopes of wider legalization and near-term decriminalization as well as the growing adoption of marijuana in more states. The recent comments from several prominent politicians regarding cannabis reform legislation added to the strength (read: 5 Best ETF Investing Ideas for 2021).

In fact, several Democratic senators released a joint statement early this week signaling plans of pursuing new legislation to reform regulations in the United States. The latest deal activity in the space has strengthened the bullish case for these stocks. This is especially true as Jazz Pharmaceuticals (JAZZ Free Report) agreed to buy cannabinoid drug company GW Pharmaceuticals (GWPH Free Report) for $7.2 billion in cash and stock.

Deal in Focus

Per the terms of the deal, Jazz will pay $220 per American depositary share of GW Pharmaceuticals, including $200 in cash and $20 in Jazz ordinary shares. This represents a premium of about 50% over GWPH’s closing price on Feb 2, and 60% over its 30-day volume weighted average price. The deal is valued at $6.7 billion net of GW cash.

The combined company will be a leader in neuroscience with a global commercial and operational footprint. The deal will bolster GWPH’s efforts in developing, manufacturing and…

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