Major cannabis companies are continuing to pursue mergers and acquisitions opportunities as a part of their expansion strategies going in 2019. Tilray Inc (NASDAQ: TLRY) announced today that they had entered an acquisition agreement in which the company, through their subsidiary company, would acquire all outstanding shares of Natura Naturals Holdings Inc, a Canadian-based licensed cannabis cultivator operating out of Leamington, Ontario.
A major aspect of the deal remains the acquisition of Natura’s cornerstone facility 662,000 square foot greenhouse cultivation facility, with 155,000 square-feet currently being licensed. Under the terms of the agreement, Tilray will pay C$35 million upfront, $15 million in cash and $20 million in Tilray stock. After Natura reaches specific quarterly production markers over the coming year, Tilray has offered up to $35 million in Tilray stock as performance bonuses if these milestones are achieved.
“We’re very pleased to have an agreement in place that allows us to expand our capacity to supply high-quality branded cannabis products to the Canadian market,” said Tilray CEO and President Brendan Kennedy. “Through an extensive and thorough search for the right supply partner, we’re pleased to have come to a mutually-beneficial agreement with Natura.”
Currently, Tilray owns three top of the line facilities in Canada along with one based in Portugal. Analysts remain optimistic about Tilray’s current and future position in the cannabis industry as one of the leading firms on the planet. “Tilray continues to see under-supply throughout the adult use market,” said Cowen analyst Vivien Azer according to Business Insider. “The Natura transaction will allow Tilray to significantly expand its capacity. Natura currently owns a 662,000 square foot greenhouse cultivation facility in Ontario, which Natura has previously announced will have an annual capacity of 70,000 kg upon completion. As such, this transaction would approximately double Tilray’s domestic cultivation capacity.”
Last week, Tilray announced a major revenue sharing agreement with Authentic Brands to help market cannabis products to retail customers. In response to today’s announcement, however, Tilray shares dropped sharply when the markets opened today, plunging 6.3 percent.
Tilray Inc Company Profile
Tilray is a global pioneer in the research, cultivation, production and distribution of medical cannabis and cannabinoids. Tilray was the first licensed producer of medical cannabis in the world to have its facility Good Manufacturing Practices (GMP) certified in accordance with European Medicine Agency (EMA) standards. The company currently serves tens of thousands of patients, physicians, pharmacies, governments, hospitals, and researchers in eight countries spanning four continents through its affiliated entities in Australia and New Zealand (Tilray Australia New Zealand Pty Ltd), Canada (Tilray Canada Ltd), Germany (Tilray Deutschland GmbH), and Portugal (Tilray Portugal Unipessoal Lda). –Tilray
Natura Naturals Holdings Company Profile
Based in Leamington, Ontario, Natura Naturals Inc., the wholly-owned subsidiary of Natura Naturals Holdings Inc. is a licensed cultivator of cannabis in accordance with the Cannabis Act and Cannabis Regulations. The company’s cultivation facility is capable of producing plants in a 662,000 square-foot greenhouse facility, of which 155,000 is currently licensed, under optimal growing conditions. Natura grows high-quality cannabis which can be used for various medical and recreational applications. In addition, Natura has an extensive genetics library and continues to develop innovative products for the Canadian and international marketplace. – Natura Naturals