The neuroscience unit is at the heart of Jazz's growth as it generated $456.9 million in the third-quarter sales, contributing a sizeable chunk to the overall sales of about $600 million.
The deal will allow Jazz to move beyond treatments for sleep disorders and cancer by adding GW Pharma's Epidolex, which brought in sales of $132 million in the latest reported quarter.
The cannabis-based drug was approved in the United States in June 2018 for use in patients aged two years and older with Dravet Syndrome and Lennox-Gastaut Syndrome, rare childhood-onset forms of epilepsy that are among the most resistant to treatment.
The U.S. medical cannabis industry is estimated to cross $16 billion in annual sales by 2025, according to industry researcher New Frontier Data.
Jazz will acquire GW for $220 per American depositary share - $200 in cash and $20 in Jazz shares. The offer price represents a 50% premium to GW's Tuesday closing price.
GW shares were hovering around $214 before the bell, while Jazz shares fell 4%.
The deal, which is expected to close in the second quarter, will be accretive in the first full year of combined operations, the companies said.
The cash portion of the transaction is expected to be funded through a combination of cash on hand and debt.