A newly formed U.S. cannabis operation — backed by a storied Ohio family that has built a fortune in the retail business — is making a hostile bid for a Canadian pot company with which it has done business in the past.

Backed by the wealthy and powerful Schottenstein family, U.S. marijuana producer Green Growth Brands Ltd. GGBXF, +17.67% said late Thursday it is making a takeover bid for Aphria Inc., one of Canada’s largest cannabis producers by market value. Aphria’s U.S. listed stock APHA, +0.23% soared 26% in after-hours trading Thursday after closing down 4.3% at $5.57 during the regular session. The stock was up about 17% in premarket trade Friday. Aphria’s Canada-listed shares APHA, +0.71% were halted after the close.

Green Growth said that its offer values Aphria at C$11 a share, or roughly $2.1 billion, which represents a 46% upside to Aphria’s closing price on Dec. 24. Green Growth’s pitch is based on combining the Schottenstein family’s long experience in the retail business with Aphria’s ability to grow lots of pot.

Aphria responded early Friday by saying the offer “significantly undervalues” the company, but that it would form an independent committee to review it.

“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,” Green Growth Chief Executive Peter Horvath said in a telephone interview Thursday evening. “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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Horvath has worked in retail for roughly 35 years and has been an executive for large public companies such as American Eagle Outfitters Inc. AEO, +2.13% and DSW Inc. US:DSW — both of which count the Schottensteins as major investors and executives. Jay Schottenstein is the chief executive and chairman of American Eagle and the chairman of DSW, while the billionaire Schottenstein family has a sprawling retail empire that includes lots of real estate and interests in grocery stores and consumer-goods manufacturing.

The Thursday announcement is not the Schottensteins’ first foray with Aphria. In 2017, the family sought to obtain a medical marijuana cultivation license in Ohio through a joint venture called Schottenstein Aphria LLC. Ultimately the joint venture failed at obtaining an Ohio license, though at the time it planned to appeal the decision.

If Green Growth’s bid to buy Aphria is successful, it will likely mean significant changes for existing Aphria shareholders. At the moment, the Toronto Stock Exchange, or TSX, and the New York Stock Exchange, where Aphria is traded in the U.S., do not allow companies that violate federal regulations to list their stock. Because Green Growth operates illegally under U.S. federal law, it’s likely that the stock would only trade on the CSE — as Green Growth does now — and over the counter.

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Horvath acknowledged in the phone interview that listing on the CSE exclusively wasn’t ideal. “It’s not optimal,” he said. “But it doesn’t mean it can’t work.”

For Horvath, the key benefits include bringing management with experience running a global company, which he likened to the current state of cannabis in the U.S. The current legal regime in the U.S. has created a motley collection of laws that vary wildly around the country, much like how each nation has a distinct set of laws that global retailers have to follow.

Green Growth bills itself as a vertically integrated marijuana company with operations in several states. According to the company’s financial statements, it banked losses of $516,344 on sales of $1.7 million during the September quarter. It did not earn revenue in the prior quarter, and lost less than $100,000. It currently has subsidiaries in California, New Jersey, Nevada and Oregon; it also owns several licenses to cultivate, process and sell marijuana in Nevada. Green Growth went public via a reverse takeover of Xanthic Biopharma Inc. and started trading on the CSE last month.

Green Growth said that it had offered a “friendly” bid that included a $50 million investment before making its current bid public, and that it plans to complete “brokered financing” of its own stock at C$7 a share on the Canadian Securities Exchange, to raise C$300 million and fund the business. Green Growth said it is offering 1.5714 shares of its stock for each Aphria share and said it “believes” it has support for the takeover from roughly 10% of current Aphria shareholders.

See also: Aphria’s stock rebounds after second short-seller report

Aphria stock has declined more than 30% after short seller Hindenberg Research published a note about the company’s business, calling it a “shell game,” among other things. At the time Aphria called the note a “malicious and self-serving attempt to profit by manipulating” the stock price. Since then, Aphria has announced that it has a named a special committee to review the claims.

An Aphria spokeswoman said Thursday the company did not have an immediate comment.