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Cannabis Stocks Trading Mixed Despite News Of Tilray Deal

Sep. 02, 2019 6:01 AM ET
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Summary

  • Shares in Canada's major cannabis producers are trading mixed this Friday.

Tilray (TLRY) appears to be the worst affected after Thursday's announcement of a CAD 110 million deal to buy head-shop chain Four20, which owns and operates six recreational cannabis stores in Alberta. It is hoped that the acquisition, which will see Tilray buy up all of Four20's issued and outstanding shares, will help the cannabis producer expand its presence within Canada. Tilray will pay CAD 70 million for the shares when the deal eventually goes through at the end of Q1 2020, followed by an additional CAD 40 million "subject to the achievement of certain milestones" by Four20.Prior to this acquisition, Tilray completed another deal with Authentic Brands Group to supply this latter with CBD for use in products for sale in several major retail chains across the US and Canada.Despite the positive response to reports of a new deal, the company shares continue to fall and could even drop to the $5.00 mark over the short to medium term. Meanwhile, we could see Canopy Growth (CGC) slide to around $24.00 per unit share, with Cronos Group (CRON) and Aphria (APHA) rising to $11.00 and $7.00 respectively.

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