Australis Capital, an investment company that was spun off in 2018 from cannabis industry major Aurora Cannabis (ACB 3.26%), has put the kibosh on a planned business tie-up. Australis announced this week that it has cancelled its previously announced merger with hemp products producer Folium Biosciences.

The company said in a press release that it "recently discovered new relevant information with regard to Folium and, on that basis, [Australis] has decided to not proceed with the merger." It did not elaborate.

Hemp oil.

Image source: Getty Images.

The Australis-Folium deal was announced last December, and it was to take the form of a reverse merger. Under its terms, the two companies would exchange shares (in the case of Australis) and membership units (Folium) to create a new entity. This was to inherit the name Folium Biosciences, with the acquired party holding an estimated 89% of shares in the combination.

At the time, Australis pledged that it would provide details of Folium's financials.

Hemp is seen by numerous analysts and investors to be a good business opportunity in the U.S. The plant produces minimal amounts of Delta-9 tetrahydrocannabinol -- THC, the compound that gets a user high -- compared to its relative, cannabis. However, it produces far higher levels of cannabidiol (CBD), which is purported to have medicinal properties. Hemp-derived products were legalized in the U.S. with the passage of the 2018 Farm Bill.

Australis was created by Canada-based marijuana vertical Aurora to take advantage of cannabis industry investment opportunities in the U.S. As marijuana remains illegal at the federal level in this country, however, Australis stock -- like that of Aurora Cannabis -- is listed in Canada, even though the company is headquartered in Las Vegas.

On Thursday, Aurora shares closed down by nearly 2%.