Aurora Cannabis is making its way into the U.S. market after agreeing to acquire Reliva in a $40 million all-stock deal. Reliva’s products are sold in more than 20,000 retail locations in the U.S. and the company holds the second-largest CBD market share in the country.

According to a press release, Reliva has generated positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) over the previous 12-month period. Aurora is required to generate positive adjusted EBITDA by the end of 2021’s first fiscal quarter as part of its debt pact signed in February, Motley Fool reports.

Aurora said Reliva “stood out among a lengthy list of potential partners” due to their positive EBITDA, “focus on regulatory, testing and compliance protocols,” their management team’s “extensive experience selling and marketing regulated consumer packaged goods” and strong relationships with “critical trade partners that provide a U.S. national distribution footprint.”

Michael Singer, executive chairman and interim CEO of Aurora, said the partnership will “create an international cannabinoid leader that we believe can deliver robust revenue and profitable growth.”

“We have taken the time necessary to carefully assess the Company’s entry into the U.S. market and we firmly believe that the combination with Reliva will create significant long-term value as Reliva provides us options to grow in hemp-derived CBD internationally. Similar to Aurora, Reliva has a strong entrepreneurial spirit and successful track record of transforming categories and creating growth brands.” – Singer in a statement

Miguel Martin, CEO of Reliva, called the enterprise “a significant opportunity to accelerate sales growth for Reliva in the United States and internationally.”

The deal, which marks Aurora’s first foray into the U.S. cannabis industry, is expected to close in June.

During the second fiscal quarter of 2020, Aurora reported net losses of about $980 million on net revenues of $47.7 million. The company’s international medical cannabis revenues fell from about $3.8 million over the fourth quarter of 2019 to about $1.5 million during the reported quarter.

Last summer, the firm announced the creation of Aurora Hemp after acquiring Hempco Food and Fiber Inc. in a stock deal worth $45.2 million.

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