Tilray, Inc. (NASDAQ:TLRY ) entered into an agreement to snap up an extra 662,000 sq. ft. of cannabis grow space today through wholly-owned subsidiary High Park.
The Toronto-based marijuana distribution subsidiary High Park is set to acquire all outstanding and issued securities of Natura Naturals Holdings Inc.
Included among Natura’s portfolio is a licensed cannabis cultivator in Leamington, Ontario, which will join the Tilray banner after the transaction is complete.
The terms of the deal will see Tilray paying $20 million in stock and $15 million in cash immediately, with undisclosed production milestones to increase the amount over time. If those milestones are met within 12 months of the completed acquisition, Tilray will issue an additional $35 million in stock, bumping up the total purchase price to a potential $70 million buyout.
This new greenhouse space in Leamington — of which 155,000 sq. ft. Is currently licensed for cannabis— will join Tilray’s existing stable of three main production facilities located in British Columbia, Portugal, and Enniskillen, Ontario.
Tilray’s President and Chief Executive Officer Brendan Kennedy commented that the deal would assist the company in meeting unprecedented demand for cannabis that has left store shelves and online checkout pages empty in recent weeks.
Kennedy also had this to say about the impending deal:
While marijuana companies of all sizes have been striking supply deals and building new grow facilities at a frenzied pace, industry insiders expect the low supply issue to continue into at least 2020, which has continued to give the black market an edge over legal retailers.
In other Tilray news, the company has announced two major deals lately which will likely set the tone for moves in the cannabis industry over the rest of 2019.
Most recently, Tilray struck a $350 million revenue-sharing deal with Authentic Brands Group to increase the company’s global footprint. Last month Tilray also officially entered the infused beverage market by striking a $100 million deal with beer maker AB InBev (NYSE: BUD).