Curaleaf Holdings Inc. agreed to buy Emmac Life Sciences Ltd. for about US$285 million, giving the company entry into Europe’s rapidly growing cannabis market.

The deal will be funded through a combination of Curaleaf shares and cash, Executive Chairman Boris Jordan said in an interview Tuesday. The total value could change slightly based on fluctuations in the share price, he said.

“By doing this transaction, Curaleaf is indisputably the largest operator on a revenue and a footprint basis around the globe,” Jordan said. With a market capitalization around US$10 billion, Curaleaf is already the largest U.S.-based multistate operator.

Curaleaf’s shares extended a rally on the news, rising as much as 16 per cent, the biggest intraday gain in almost a year. The stock had gained 18 per cent this year through Monday.

Europe Growth

The largest cannabis companies are racing to grow through acquisitions and jockeying for position ahead of further legalization in the U.S. and increasing acceptance globally. Europe currently only allows medical cannabis, but the deal positions the two companies to take advantage of what’s anticipated to be a fast-growing market as more countries consider recreational use. The Netherlands and Switzerland are expected to implement recreational programs by the end of the year.

U.S. companies have mostly been focused on North America, but may eventually want to compete with Canadian peers overseas. Jordan said he expects to make additional acquisition in Europe, and getting into that market is a way to eventually expand into the Middle East and Africa.

“Countries like Poland, Ukraine, South Africa -- there are even rumors of Egypt -- are also moving toward legalization and Europe is a great hub to attack those markets from,” he said.

Curaleaf had recently raised US$300 million via a senior secured term loan.