01/12/2018 09:55 EST | Updated 01/12/2018 11:33 EST

The Tragically Hip, Weed Millionaires, Back Cannabis Merger

The band owns an estimated $39 million-worth of Newstrike Resources.

The Tragically Hip (from left: Gord Sinclair, Johnny Fay, Rob Baker and Paul Langlois) arrive on the red carpet for the movie

TORONTO — Newstrike Resources Ltd. says the Tragically Hip are backing the company's deal to be acquired by CanniMed Therapeutics Inc.

The band is a creative partner and shareholder in Newstrike, the company says.

According to a report in the Globe and Mail, the Hip own a 5.4-per-cent stake in Newstrike. Even with a steep drop in the price of Newstrike stock this week, the band's share of the company is worth an estimated $39 million.

Watch: Gord Downie voted Canadian Press newsmaker of the year

In a statement on behalf of the band, guitarist Rob Baker says the Newstrike-CanniMed combination "will create shareholder value and a formidable force in the Canadian cannabis market for many decades to come."

CanniMed struck a friendly deal in November to acquire Newstrike in an all-stock transaction.

Also on HuffPost Canada:

CanniMed shareholders would own approximately 65 per cent of the combined company, while Newstrike shareholders would hold the remaining 35 per cent.

However, Aurora Cannabis Inc. is looking to stop the deal as part of its own hostile offer to buy CanniMed.

— The Canadian Press with a file from HuffPost Canada

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