MONTREAL, Canada (AFP) — Canadian cannabis producer Aphria on Friday rejected a proposed Can$2.8 billion (US$2.1 billion) takeover bid by US-based Xanthic Biopharma, calling it hostile and under-valued.

Green Growth Brands, a division of Xanthic Biopharma, presented a conditional offer of Can$11 per share on Thursday after markets closed.

It is offering to buy one of the biggest producers of cannabis in Canada, which in October legalised recreational use of the drug, drawing major investment to an industry previously focused on medical marijuana.

The US group, which has cannabis operations in Nevada, said the combined firm would be the only North America-wide firm in the business, and the largest by market capitalization in the United States.

It said its offer represented a premium of 45.5 per cent over Aphria’s December 24 closing price on the Toronto Stock Exchange.

Green Growth said the offer was conditional on obtaining necessary financing.

Aphria responded on Friday by saying that the US firm’s offer is “based on a hypothetical valuation of its own shares, with no relation to the current price.”

Aphria shares jumped more than 10 per cent in early trading Friday on the Toronto bourse to Can$8.36 a share while Xanthic Biopharma dropped one per cent to Can$3.69.