(Reuters) - Jazz Pharmaceuticals Plc said on Wednesday it had agreed to buy GW Pharmaceuticals plc in a $7.2 billion cash-and-stock deal which will bolster its neuroscience business with the addition of a cannabis-based epilepsy treatment. GW Pharma’s Epidiolex, the first marijuana-derived drug to be approved in the United States, generated sales of over $500 million for the U.K.-based company last year. Analysts expect sales to breach $1 billion soon. The drug was approved in June 2018 for use in patients aged two years and older with rare childhood-onset forms of epilepsy that are among the most resistant to treatment. It has since received wider approvals, including in children of one year and older. The deal took some cannabis-focused exchange-traded funds (ETFs) by surprise. Many saw it as a seal of approval for the medical marijuana industry by traditional pharma companies. “Today could be a notable turning point as a more traditional pharma company has agreed to purchase GW Pharma,” said Nawan Butt, portfolio manager of the Medical Cannabis and Wellness UCITS ETF. Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares, which manages the Pure Cannabis ETF, said: “We’re surprised at the news... but not at all surprised by opportunity or the price.” “More and more companies are learning the benefits of cannabinoid products, and cannabis and cannabinoids products are rapidly gaining acceptance in the public eye and at a federal government level.” The deal will allow Jazz to move beyond sleep disorders and cancer treatments by beefing up its neuroscience unit. Jazz Chairman and Chief Executive Bruce Cozadd said in an interview that in GW, Jazz is getting “a near-term blockbuster product in Epidiolex and a really exciting scientific platform around cannabinoid medicines, with early-to-late-stage clinical programs already in place.” Jazz will acquire GW for $220 per American depositary share - $200 in cash and $20 in Jazz shares. The offer represents a 50% premium to GW’s Tuesday closing price. GW shares were hovering around $214, while Jazz shares fell 2%. Evercore and Guggenheim advised Jazz, according to the press release. Goldman Sachs & Co LLC and Centerview Partners LLC advised GW.