Canadian pot company buying convertible notes of downtrodden U.S. brand as Tilray seeks approval to issue more shares for deal
Canadian cannabis company Tilray Inc. has its eyes on the U.S.
Tilray TLRY, announced Tuesday afternoon that it has agreed to purchase convertible bonds put forward by U.S. pot company MedMen Enterprise Inc. MMEN, MMNFF, +1.49% as it sought to avoid insolvency. The deal could eventually give Tilray a path to own MedMen if marijuana is federally legalized in the U.S.
“The investment we are announcing in MedMen securities today, one of the most recognized brands in the $80 billion U.S. cannabis market, is a critical step toward delivering on our objective as we work to enable Tilray to lead the U.S. market when legalization allows,” Tilray Chief Executive Irwin Simon said in a statement.
The maneuver is similar to what Canopy Growth Corp. CGC, -0.46% WEED, -0.14% pulled off in 2019 with Acreage Holdings Inc. ACRDF, -2.52%. Canadian cannabis companies cannot own U.S. properties outright because the drug is still illegal at the federal level in the U.S., so they tend to buy equity stakes that can turn into ownership in the event of a change in U.S. law. [Read More @ Marketwatch]
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