What's going on?

On Monday, Canadian medical marijuana producer Aurora Cannabis sparked up a deal with rival MedReleaf, acquiring it for around $2.5 billion (tweet this). Who said money doesn�t grow on trees?

What does this mean?

Aurora�s shares have tripled in the last year. So it�s probably no surprise that it�s paying for MedReleaf using its own stock � no money�s actually changing hands in this drug deal. In the end, Aurora will own about 60% of the new joint company, which will be able to produce over 600 tons of weed per year. That�s a lot of green.

Aurora hopes teaming up with its rival will complement both companies’ strategies and lower costs (a.k.a. create synergies), while building a business big enough to handle the increase in demand when cannabis becomes legal in Canada on July 1 (for recreational purposes � medical use was legalized in 2013).

Why should I care?

For you personally: Well, if Seth Rogen can do it�

Cannabis laws are mellowing out all over the world � Snoop Dogg�s favorite treat is now legal for medical purposes in 21 countries, including Germany and Spain � and several countries are considering decriminalizing it entirely, which would allow for recreational use. In the US, half the country permits cannabis for medical use � and you can smoke legally in a few states without a doctor�s note. Startups like goPuff have sprung up to meet the increased demands of smokers who, famously, might get an attack of the munchies.

For markets: Weeding out the small players.

This is the latest in a string of ten acquisitions made by Aurora in the last two years as it seeks to become the leader in Canada�s burgeoning cannabis market � and it caused both Aurora�s and MedReleaf�s stocks to roll up by 1%. The Canadians must be smoking something: also on Monday, medical marijuana producer Canopy Growth Corp picked up the final third of its greenhouse operator, causing Canopy�s shares to get 10% higher.