Green Growth Brands Ltd., a newly formed U.S. cannabis retail operation backed by the wealthy Schottenstein family, is in the process of making a hostile takeover bid for one of Canada’s largest pot producers by market value.

On Thursday, Green Growth, a vertically integrated marijuana company with operations in several states, revealed that it tabled an all-stock bid for Aphria Inc. (APHA), valuing the company at 11 Canadian dollars a share, or roughly $2.1 billion. The offer represents a premium of 45.5% over Aphria’s closing price on the Toronto Stock Exchange on Dec. 24 and is more or less in line with where the shares were trading before short-sellers Quintessential Capital and Hindenburg Research labeled the Ontario-based company’s business a “shell game.”

Green Growth said it contacted Aphria’s board about creating a “friendly business combination,” including a $50 million investment, before announcing its plans to launch a hostile bid. The Columbus, Ohio-based company added that it believes it already has the support of Aphria shareholders, who currently control about 10% of the pot producer’s outstanding shares, and disclosed that it had already acquired a “meaningful toehold position” in Aphria.

In its statement, Green Growth talked up the benefits of the two firms joining forces, claiming that its own retail experience combined with Aphria’s ability to grow lots of pot at a low cost would improve the prospects of both companies.

"We believe our offer will create value for both Aphria and Green Growth shareholders," CEO Peter Horvath said in a statement. "We are confident that the significant premium we are offering and the opportunity to participate in the growth of a stronger, combined company are so compelling that we are taking our offer directly to Aphria's shareholders."

Aphria warned that "shareholders should be aware that the value of GGB's per-share offer is based on a hypothetical valuation of its own shares, with no relation to the current price."

"Based on the 20-day volume weighted average price of GGB shares and the expressed exchange ratio of 1.5714 common shares of GGB for each Aphria share, the proposed bid would be approximately 23% below the Company's average share price over the same period," said the company in a press release on Friday.

Aphria’s U.S. listed shares rose 23% in pre-market trading.

Last month, Green Growth unveiled plans to expand its retail business, outlining its goal to offer a "premium cannabinoid brand offering scientifically proven relief through easy, innovative, and contemporary non-combustible methods."

The company is still in the startup phase, yet is backed by considerable expertise. CEO Horvath has worked in retail for about 35 years, including stints as an executive at large public companies such as American Eagle Outfitters Inc. (AEO) and DSW Inc. (DSW), both part of the Schottenstein family's sprawling retail empire worth billions. The Columbus, Ohio family is also the majority shareholder in Green Growth.

Horvath and the Schottenstein family appear to have timed their bid for Aphria well. A deal would help Green Growth to capitalize on the popularity of cannabis without paying over the odds. Several months ago, buying Aphria would have been much more expensive, leaving less capital to invest in the business.

Earlier this month, Citron Research had said "the bidding is officially on" for Aphria in a bullish note that described why it is a prime acquisition target. "With Aphria’s recent share price decline, it is the clear winner in the ‘don't overspend’ game," said the note.

If the deal does go through, Aphria will likely lose its New York Stock Exchange listing as Green Growth operates illegally under U.S. federal law.