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Two major Canadian cannabis producers, Hexo and Tilray Brands, have agreed to form a “strategic alliance”, which involves Tilray acquiring Hexo’s debt in exchange for the right to purchase Hexo shares.
Tilray will acquire CAD$243.3m ($193m)) of Hexo senior secured convertible notes from HT Investments, with the right to convert them to Hexo shares at CAD0.85 ($0.65) per share. The debt will bear interest at a rate of 5% per annum, lasting three years to 1st May 2026. Tilray will have the option of either having the loan repaid plus accrued interest or, prior to maturity, converting any amount owed into the ownership position in Hexo.
