Cannabis producer Tilray (TLRY - Get Report)  definitively agreed to pay as much as C$110 million (US$82.9 million) of stock for the Calgary cannabis retailer Four20 Investments. 

Terms call for Tilray to pay C$70 million of Class 2 common stock at closing and as much as $40 million conditioned on how the business performs. 

Four20 operates six retail locations and has secured 16 more high-traffic locations in Alberta cities including Canmore, Calgary and Edmonton.

The deal further develops Tilray's retail strategy, which includes minority investments in other leading cannabis retailers, Tilray's chief corporate development officer, Andrew Pucher, said in a statement.

Tilray said it would leverage Four20's retail experience to expand to other Canadian provinces when those regions permit licensed producers to own retailers.

The Nanaimo, British Columbia, company expects to close the deal by the end of the first quarter, subject to regulatory clearances, approval by Four20's holders, and court approval.

Canaccord Genuity provided a fairness opinion to Tilray's board in connection with the transaction.

Tilray shares are down 1.15% to $26.89. 

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