Jazz Pharmaceuticals PLC (NASDAQ:JAZZ) has agreed to acquire pioneering cannabis firm GW Pharmaceuticals plc (NASDAQ:GWPH) for US$7.2bn (£5.2bn) or US$220 per share, a 34% premium to Tuesday’s closing price.

Jazz, a sleep medicines and cancer treatment developer, will pay US$200 per share in cash and US$20 per share in its own shares.

The transaction, which has been unanimously approved by the boards of both companies, is expected to close in the second quarter of 2021.

UK-based GW Pharmaceuticals produces childhood epilepsy treatment Epidiolex, the first cannabis-based medicine approved in the US after the FDA green light in 2018.

It is also approved in the EU in patients two years of age and older for the adjunctive treatment of seizures associated with LGS and Dravet syndrome, in conjunction with clobazam.

Epidiolex is under review by the European Medicines Agency for the treatment of seizures associated with Tuberous Sclerosis Complex, a rare disease characterised by severe early-onset epilepsy.

GW also has a scientific platform and a pipeline of cannabinoid product candidates, as well as highly specialised manufacturing expertise.

It was founded in 1998 by doctors Geoffrey Guy and Brian Whittle, who managed to obtain a cultivation licence for research purposes by the UK authorities at a time when weed had a very bad name.

It floated on AIM in 2001, got a dual listing on the Nasdaq in 2013 then left London’s junior market three years later.

A flurry of cannabis companies are expected to debut the London market soon: notably, Australian-listed MGC Pharmaceuticals intends to raise £5mln with its IPO later this month to advance clinical trials of two drug candidates, increase distribution and complete construction of manufacturing facilities in Malta.

GW surged 46% to US$214.12 while Jazz shed 3% to US$151.57 at open.