In an attempt to latch onto the Biden administration's recent cannabis federal legalization push, Canadian cannabis producer Tilray--long one of the best stocks in this space to own--has acquired indebted California-based cannabis retailer MedMen Enterprises.

Under the deal, Tilray will acquire 75% of MedMen’s outstanding secured convertible notes and 65% of its outstanding warrants for $165.8 million

Some deals are just too good to pass up. That’s despite the fact that just last month, Tilray Chairman and CEO Irwin Simon told Yahoo Finance that the company wouldn’t touch the U.S. plant market without definitive legalization. 

“Until legalization does happen, we cannot touch the plant and not touch anything in the U.S,” Simon said. 

However, after a change of heart over MedMen, Simon said the deal would enable Tilray to lead the U.S. market when legalization allows.

“What MedMen does for Tilray is that it gives us a great brand. Ultimately, once legalization happens, it gives us the potential to own a great company that we can ultimately take into the rest of the world,” he said.

Since Canada legalized recreational use of cannabis in 2018, Tilray has been the industry frontrunner. That same year, it made its debut on the NASDAQ, becoming the first marijuana company to go public on a major U.S. exchange

Also that same year, Tilray gained approval as the first cannabis company to export legal weed to the U.S. for a clinical trial at the University of California, San Diego. The company also has a decent international strategy, producing medical cannabis in Canada and Europe and supplying products in 10 countries on five continents.

In April, Tilray underwent a merger with former rival Aphria, making the combined company the largest pot seller by revenue, with a market cap of approximately $8.2 billion. 

Of course, Tilray is not the only Canadian cannabis company positioning itself for possible federal marijuana legalization in the United States.

In June, Toronto-based Cronos Group acquired 10.5% of PharmaCann, one of the largest privately held cannabis companies in the U.S., for $110.4 million. 

Likewise, Canadian cannabis retail chain High Tide has been on a U.S. buying spree. 

This is all happening in the space as the U.S. Senate moves to legalize cannabis at a federal level. 

Cannabis is legal in most states but remains illegal at the federal level. Eighteen states and Washington, D.C., have now legalized marijuana for recreational use for adults over 21. Thirty-seven states currently allow medical marijuana use, while 15 states do not have any laws that allow marijuana.

In June, three Democrat leaders sponsored the Cannabis Administration and Opportunity Act, which would remove marijuana from the Controlled Substances Act (CSA) and allow states to determine their own cannabis laws. 

Senate Majority Leader Chuck Schumer, Senator Cory Booker of New Jersey and Ron Wyden of Oregon said the draft regulates “how best to legalize and regulate cannabis and cannabis commerce in a post-prohibition America”.

The new bill would allow adult Americans to buy and possess up to 10 ounces of marijuana without facing criminal penalties. But the draft also regulates banking, which is an urgent issue for cannabis companies in the U.S. that are now deprived of banking and stockpiling cash. 

Currently, due to federal restrictions, most federally regulated banks won’t service the industry, forcing cannabis companies to resort to cash-run operations.

In April, the U.S. House of Representatives passed SAFE Banking Act legislation that would allow banks to provide services to cannabis companies in states where it is legal.