Canada's Indus Holdings buys Miley Cyrus-backed pot producer

(Reuters) - Pot producer Indus Holdings Inc said on Thursday it bought California-based rival Lowell Herb Co for $39 million, adding a brand backed by Miley Cyrus and Chris Rock to its offering of products.

Consolidation is heating up in the cannabis sector as companies pursue scale to benefit from the coronavirus-driven surge in weed sales and likely relaxation of U.S. federal prohibitions after Joe Biden's win in the presidential election.

Canadian pot producer Aphria Inc said in December it would merge with rival Tilray Inc, creating the world's largest cannabis producer by sales.

Indus paid $4.1 million in cash and issued 22.6 million shares to Lowell Herb, which also raised money from celebrities such as Mark Ronson and Sarah Silverman.

The Canadian company plans to change its name to Lowell Farms Inc.

It also said that Lowell Herb-owner, The Hacienda Group, would continue to produce the brand's products, which include smokes, cannabis flowers, oil and vapes, for an interim period.

(Reporting by Rithika Krishna in Bengaluru; Editing by Aditya Soni)