Jazz Pharmaceuticals has agreed to buy GW Pharmaceuticals, a British pioneer in cannabis-based medicines, in a $7.2bn cash-and-stock deal that will expand the US drugmaker’s neuroscience portfolio.

US-listed GW will receive $220 per share, of which $200 will be paid in cash and the rest in Jazz stock. The offer represents a 50 per cent premium on GW’s closing share price on February 2.

Shares in GW were up 47 per cent in pre-market trading on Wednesday while Jazz’s stock price declined almost 5 per cent.

The deal will give Jazz access to Epidiolex, a drug developed by GW to treat childhood epilepsy, which in 2018 was the first cannabis-derived medicine to receive US regulatory approval and become available on the UK’s NHS.

It comes as cannabis-based medicines are increasingly being legalised across the globe, including North America and parts of Europe, making the sector one of the fastest-growing in pharmaceuticals.

“We are joining two teams that share a passion for, and track record of, developing differentiated therapies that advance science and transform the lives of patients,” said Bruce Cozadd, chairman and chief executive of Jazz, in a statement. “This will help facilitate a successful integration and bring added capabilities to Jazz.”

GW was founded more than two decades ago by Geoffrey Guy to harness the medical benefits of marijuana. In 2010 it launched Sativex, a drug to treat the symptoms of multiple sclerosis that has since been approved in 30 countries.

The company left London’s junior market in 2016 for a sole listing on Nasdaq. The pioneer in medicinal cannabis is today the UK’s largest cultivator and exporter of products derived from marijuana.

The deal, which is partly being financed with Jazz’s balance sheet cash and debt from Bank of America and JPMorgan Securities, will allow GW to tap into Jazz’s significantly larger platform and grow at a faster pace across more therapeutic areas. Epidiolex generated about $510m in annual sales within two years of launch.

Investments in cannabis companies have in recent years soared as several countries, including the UK, have legalised the use of cannabis for pain relief and a myriad of conditions such as anxiety or epilepsy.

In North America, the line between cannabis use for medical and recreational purposes has blurred, with leading companies such as Aurora and Canopy Growth serving both markets, following the legalisation of all types of cannabis consumption in Canada and several US states such as California and Illinois.

The deal is expected to close in the second quarter of 2021.