Aurora Cannabis is gunning to become the No. 2 player in the Canadian marijuana market with its offer to acquire CanniMed Therapeutics – a deal it says would make its rival’s business “sing.”

“Combining these two companies, with a combination of about 40,000 patients between the two companies and significant revenues, would put us second to Canopy in the space, in terms of revenues,” Aurora executive vice-president Cam Battley told BNN on Wednesday.

“It’s the right time to do this. We could really make CanniMed sing, and that’s why we were approached by this plurality of shareholders from the CanniMed side.”

The Vancouver-based company wants to acquire all of CanniMed's issued and outstanding stock in an all-share deal worth up to $24, or about 3.7 Aurora shares per CanniMed share based on Aurora's closing price of $6.41 Tuesday, a premium of 57 per cent. CanniMed's traded as high as $21.25 on Wednesday.

CanniMed shareholders would hold about 16 per cent of Aurora's shares if the deal is completed.

Aurora said it submitted a proposal to CanniMed's board of directors Monday and has given the company until Friday to respond. If the board doesn't respond, Aurora plans to launch a formal takeover bid.

“We’d like this to be as collaborative a process as possible," Battley told BNN, adding that he thinks his company’s performance has put it in a good position to take over CanniMed.

“We’ve been executing consistently,” Battley told BNN. “We’ve been doing something that not every licensed producer in this space has been doing and I think that that’s what has given us the opportunity to take a step and talk to CanniMed and make a friendly offer, at this point.”

Aurora said it has entered into agreements with shareholders representing 38 per cent of CanniMed's outstanding shares to support its bid. The company disclosed the proposal at the request of the Investment Industry Regulatory Organization of Canada, which halted Aurora shares earlier Tuesday.

Shares of Aurora have shot up more than 30 per cent on the back of its earnings last week that showed a 169 per cent jump in revenues in the quarter ended Sept. 30, and $1.2 million in sales of dried cannabis in Germany.

CanniMed said in a release Wednesday it has not received a formal offer and it believes the share consideration presented by Aurora is “inflated.” It also said it’s in advanced talks to buy Newstrike Resources.

The acquisition would boost Aurora's market capitalization to more than $3 billion. Its projected active registered patient base of 40,000 would still be shy of the 63,000 at Canopy Growth Corp.

Canadian marijuana companies have ramped up production capacity ahead of Canada's deadline for the legalization of recreational cannabis next summer and worked to extend their reach outside the country's borders over the last financial quarter.

Some analysts have been predicting a wave of consolidation among the around 50 licensed producers in the burgeoning industry ahead of legalization.

CanniMed, previously Prairie Plant Systems, was one of the first medical marijuana companies to be granted a Health Canada licence to produce in 2013. Prior to that, Prairie Plant Systems had been the government's official marijuana provider on the earlier program enacted in 2000.

The company is focused on cannabis oil, a higher-margin product than dried bud.