MedReleaf Corp., the Markham, Ont.-based grower of medical cannabis, is in play and has contacted multiple larger players in the marijuana industry about a sale, sources say.

The most serious discussions are happening with Aurora Cannabis Inc., said the sources, who spoke on the condition of anonymity because the talks are private.

A transaction would marry two heavyweights in the legal cannabis industry to create the largest player by market capitalization. Buying MedReleaf would give Aurora access to more supply of weed ahead of Canada’s move to legalize and regulate the recreational use of the drug.

Aurora and MedReleaf declined to comment.

It isn’t certain whether a deal between Aurora and MedReleaf will be consummated. But if a deal gets done, it would be the latest in a string of purchases by Aurora, which on Tuesday closed its January acquisition of Saskatoon-based CanniMed Therapeutics Inc.

It is understood that MedReleaf has also reached out to other companies, including rivals Canopy Growth Corp. and Aphria Inc., in search of an alternative offer, said the sources.

Canopy declined to comment. Aphria was not immediately available to comment.

Shares of Aurora rose in early trading on Wednesday to $8.14. It has a market cap of $4.6-billion. MedReleaf’s stock fell to $22.20, giving it a market cap of $2.2-billion. Both companies have seen their share prices tumble since January amid a sector-wide selloff.

MedReleaf’s shares have jumped more than 40 per cent in the past month and are up about 10 per cent this week. By comparison, the Horizons Marijuana Life Sciences exchange traded fund, which includes many of the largest cannabis stocks, is up about 8 per cent over the past month and 2 per cent this week.