U.S. cannabis retailer Green Growth Brands said it will make a hostile offer to acquire Aphria for $2.06 billion in a move to expand its operations into Canada.

The announcement of the all-stock acquisition proposal on Thursday came after a sharp fall in Aphria’s share price since a short-seller published a negative report about the Canadian pot producer.

Green Growth’s offer represents a premium of 45.5% over Aphria’s closing price on the Toronto Stock Exchange on Dec. 24.

“Together, we can unleash synergies between our teams, assets, and geographies, forming a combined enterprise that will accelerate our collective growth strategies in Canada, the U. S. and overseas,” Peter Horvath, CEO of Green Growth, said in a news release.

Aphria supplies cannabis to all Canada’s provinces and the Yukon Territory, while Green Growth’s operations include cultivation, manufacturing, and retail dispensaries.

Canada legalized the recreational use of marijuana in October and, according to Reuters, “Several companies are looking to partner with or buy pot firms to explore opportunities in the Canadian cannabis sector.”

Earlier this month, Marlboro cigarette maker Altria Group invested $1.8 billion in Toronto-based Cronos Group, representing by far the biggest investment by a major tobacco conglomerate in a cannabis company.

Green Growth noted Aphria’s current cash cost per gram is C$1.30 and is expected to further decrease to C$0.95 per gram with projected annual capacity of more than 250,000 kilograms by early 2019.

“The combined company will marry Aphria’s low-cost cultivation and near-term production capacity with Green Growth’s vast retail know-how to capture market share while maintaining lean margins,” Green Growth said.

The company, which is backed by the billionaire Schottenstein family, went public through a reverse takeover of Xanthic Biopharma and started trading on the Canadian Stock Exchange last month.

“What we’ve learned about our own story is that there’s a real demand and need for seasoned and accomplished management in the industry,” Horvath told MarketWatch. “The essence, the idea here, is to take talent and capabilities and join them with [Aphria’s] team and leverage them across multiple geographies.”

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