Tilray (TLRY.O) reports a definitive pact to buy Natura Naturals Holdings, the parent company of a licensed cultivator of cannabis based in Leamington, Ontario. The deal will approximately double Tilray’s Canadian cultivation capacity, according to Cowen analyst Vivien Azer.

-Tilray to pay $35 million at closing, comprised of $15 million cash and $20 million of Class 2 shares

-The deal includes Natura’s 662,000 square-foot greenhouse, including the 155,000 square-feet that are currently licensed, and all subsequent output

-Upon Natura reaching certain quarterly production milestones over the following twelve-month period, up to $35 million of Tilray common stock may become payable

-Deal fits Tilray’s strategy of purchasing cannabis from third-party suppliers and will help it address supply shortages in the Canadian recreational market, Azer writes in a note

-Tilray falls as much as 2.8 per cent in early trading in New York

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