Analyst Note| Kristoffer Inton |
On Aug. 17, Canadian cannabis producer Tilray announced that it and a group of strategic investors acquired roughly $166 million, or about 75%, of U.S. multistate operator MedMen’s senior secured convertible notes and related warrants. Tilray’s share in the deal gives it 68% of the outstanding notes and warrants, which would convert to about 21% of MedMen’s outstanding shares. The notes are convertible and warrants exercisable upon U.S. federal legalization, or Tilray’s waiver of such requirement. The deal gives Tilray its first option value into U.S. THC, akin to Cronos’ option to acquire a 10.5% stake in PharmaCann and Canopy’s options to acquire 27% of Terrascend and 100% of Acreage.