Aurora Cannabis Inc. has inked a friendly deal to acquire MedReleaf Corp. in an all-stock transaction valued at $3.2 billion, creating a company capable of producing more than 570,000 kilograms of marijuana per year.

Current shareholders of Aurora - one of the Canadian cannabis industry's major consolidators - would own 61 per cent of the combined company and MedReleaf shareholders would own about 39 per cent.

“Our complementary assets, strategic synergies, and strong market positioning will provide us with critical mass and an excellent product portfolio in preparation for the adult consumer use market in Canada,” Aurora chief executive Terry Booth said in a statement.

“Equally, the combination strengthens our capacity to service the rapidly expanding global medical cannabis markets, and amplifies our early-mover advantage.”

Consolidation in the Canadian marijuana sector has been accelerating as the country prepares to legalize cannabis for recreational use later this year.

Rival cannabis company Canopy Growth Corp. (TSX:WEED) announced separately on Monday that it has a non-binding agreement to buy the remaining 33 per cent stake of BC Tweed Joint Venture Inc. in return for up to $374 million worth of its shares.

Canopy also announced it has applied to list its common shares on the New York Stock Exchange.

Edmonton-based Aurora and Markham, Ont.-based MedReleaf had confirmed on May 3 they were in discussions but had no agreement at the time.

The deal implies a price of $29.44 per MedReleaf common share, 18 per cent above the Friday closing price of $24.90.

The companies will have nine production facilities in Canada and two in Denmark and distribution agreements with Alcanna liquor stores in Alberta, SAQ provincial liquor stores in Quebec, Pharmasave and Shoppers Drug Mart.

The boards of both companies have approved the transaction but the deal requires approval by at least two-thirds of MedReleaf shareholders and a simple majority of Aurora shareholders.

“By combining with Aurora . . . we will be ideally positioned to set the global standard for our industry at a pace that will be difficult to match,” MedReleaf CEO Neil Closner said in a statement.

Aurora recently completed its acquisition of Saskatoon-based licensed producer CanniMed Therapeutics after striking a $1.1 billion stock-and-cash deal in January.

In February, rival licensed producer Aphria Inc. completed its acquisition of B.C.-based Broken Coast Cannabis Inc., a transaction valued at more than $200-million in stock and cash.