Canadian cannabis company Tilray is hedging its bet on country-wide legalization of marijuana in the U.S. by buying a stake in Medmen, an American cannabis retailer.
“What Medmen does for Tilray is that it gives us a great brand. Ultimately, once legalization happens, it gives us the potential to own a great company that we can ultimately take into the rest of the world,” said Irwin Simon, Tilray’s chairman and CEO.
Under the terms of the deal, Tilray and other investors have acquired 75 percent of the U.S. retailer’s outstanding secured convertible notes from Gotham Green Partners and 65 percent of the company’s outstanding warrants for $165.8 million.
Although Medmen has an established cannabis business, the company has suffered losses in recent years, with its market value plummeting to less than $200 million, CNBC reported.
Medmen currently operates 25 retail stores and has plans to open another five later this year.
Speculations surrounding the federal legalization of marijuana have also recently prompted other Canadian companies to acquire U.S. firms. In June this year, cannabis corporation High Tide Inc. acquired Daily High Club (DHC), one of the top five global cannabis retailers. The acquisition gave High Tide USA Inc., a wholly-owned U.S. subsidiary of Canada-based High Tide, 100 percent ownership of DHC.
“Daily High Club stood out to us because it is an increasingly popular consumption accessories online retailer, with a rapidly growing subscription box model which can easily be tailored to include cannabis products in the event of U.S. federal legalization,” said Raj Grover, president and CEO of High Tide.
