Tilray Brands, Inc. and Hexo Corp. have revised the terms of a US$211 million deal the cannabis companies signed that could see Tilray own a stake in its rival.

The companies say the deal now includes an additional discount to Tilray's purchase price and a reduction to the conversion price Tilray will pay for a note issued by Gatineau-based Hexo and HT Investments MA LLC (HTI).

Under the amended deal, Leamington, Ont.-based Tilray would acquire the note from HTI, which includes an outstanding balance of $185 million, along with any accrued and unpaid interest, for 89.2 per cent of the outstanding balance. 

That portion of the balance now equates to a 10.8 per cent discount and will be coupled with a drop in the conversion price of the note, which will fall from 85 cents to 40 cents per share.

The new terms will allow Tilray to convert half of its outstanding common stock of Hexo this month, but the overall deal is not expected to close until at least July 15 and could now take up to Aug. 1 because of the adjustments.

The previously announced deal will see Tilray and Hexo work together through a strategic agreement, where Tilray will serve as third-party manufacturer for Hexo, the companies will share savings on a 50:50 basis and Hexo will pay Tilray an annual fee of $18 million for advisory services.