Why Did Tilray Stock Drop Sharply Today?

The deal will see Tilray pay ABG an initial $100 million and as much as $250 million in cash and stock based on certain milestones. In return, Tilray will receive up to 49% of net revenue from cannabis products bearing ABG brands. The agreement also guarantees Tilray a minimum annual payment of $10 million for 10 years, so it will—at the very least—make back its initial investment over the next decade.

Tilray and ABG’s partnership is the second such pairing of a cannabis producer and an apparel-adjacent company in recent days. Last week, Green Growth Brands (GGB) and Designer Shoe Warehouse (DSW - Free Report) announced a deal that will see some of GGB’s CBD-infused products sold in select DSW stores.

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