Tilray To Acquire Cannabis Cultivator Natura Naturals Holdings

Tilray Inc. TLRY is expanding its production capacity through the acquisition of licensed cultivator Natura Naturals Holdings. 

What Happened

Tilray will buy the Leamington, Ontario-based cultivator for C$35 million, including C$15 million in cash and C$20 million in Class 2 stock once the deal is completed.

"Upon Natura reaching certain quarterly production milestones over the following twelve-month period, up to C$35 million of Tilray common stock may become payable resulting in a total purchase price of C$70 million if fully achieved," according to the press release.

The acquisition is subject to regulatory approvals as well as approvals from shareholders. Tilray expects it to be completed within the next 30 days.

Why It's Important

The acquisition will give Tilray access to Natura Naturals' greenhouse cultivation facility of 662,000 square feet. Currently, 115,000 square feet of the facility are licensed. 

The acquisition will be a substantial addition to Tilray's growth capacity. Its two facilities in Enniskillen, Ontario houses around 10 acres (or about 435,600 square feet) of greenhouses, with the company having planned to expand it to 30 acres. 

Following the full legalization of cannabis in Canada, companies are struggling to meet the huge demand. As the country grapples with shortages, businesses are heavily investing into expansion.

The consensus among experts is that the supply and demand issues should be resolved within six to 12 months. In the meantime, the government is developing a regulatory framework that would cover cannabis-infused edibles and beverages, which should become available by Oct. 17. 

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