Cannabis ETFs Spike on Jazz-GW Pharma Deal

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 agreed to buy cannabinoid drug company GW Pharmaceuticals GWPH 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 commercializing regulatory approved therapeutics that address a range of diseases, including epilepsy-related seizures associated with Lennox-Gastaut Syndrome, Dravet Syndrome and Tuberous Sclerosis Complex. Jazz’s lead product, Epidiolex, is the first plant-derived cannabinoid medicine approved by the U.S. Food and Drug Administration to treat epilepsy-related seizures. [Read more at Yahoo! Finance]