Cannabis mergers have run aground since the tide went out on pot stocks. Earlier this month, MedMen Enterprises killed its $680 million deal with PharmaCann. A Tuesday press release by Cresco Labs proclaimed the completion of antitrust review for its $800 million merger with Origin House. But it went on to say the companies need to negotiate the terms of the deal they’d announced in April, when cannabis stocks were at their peak.

The April deal had arranged for the exchange of 0.8428 of a Cresco share for each share of Origin House. At the time, Cresco stock (ticker: CL.Canada) traded for 15.05 Canadian dollars a share on the Canadian Securities Exchange, so the deal valued Origin House (OH.Canada) at C$12.68 a share. Much has changed. Cresco now trades for C$7.96 and Origin House goes for C$5.29.

Arbitrage traders seem to think Cresco’s deal could scuttle. At the agreed-upon share exchange, the arb spread on the two stocks had widened Wednesday to C$1.40 (subtracting Wednesday’s price for Origin House from the agreed fraction of Cresco’s price). That’s huge for stocks trading near C$5 and C$8 apiece, and way wider than the modest spread that separated the stocks for most of the last few months.

In Tuesday’s announcement, the companies said they “are now working towards closing the transaction on terms that will be mutually agreeable to both parties.”

Chicago-based Cresco declined to explain what terms still need agreement. In an email, spokesman Jason Erkes said the companies were “thrilled” at completing the federal antitrust waiting period for their deal. Now, he said, “we are able to re-engage with Origin House in collaboration and verification procedures, as is typical of large and complex M&A transactions.” Origin House did not respond to a Barron’s query.

Other big marijuana industry deals awaiting closure are two by Harvest Health & Recreation (HARV.Canada) to acquire CannaPharmacy and Verano Holdings for stock originally valued at $90 million and $850 million, respectively. At C$3.56 each, Harvest shares now trade at about half the level at which the deals were struck. The Tempe, Arizona-based firm didn’t respond to a Barron’s query on its deals’ status, but said in a September press release that the deals were on track to close by year end.

In the thick of many cannabis industry transactions is the Canadian broker Canaccord Genuity (CF.Canada), which has dominated the financing of Canadian producers like Aurora Cannabis (ACB), as well as those of most American operators, who are forced to sell stock in Canada because of marijuana’s illegality under U.S. federal law. More than any financial firm, Canaccord’s profits have been hitched to marijuana stock prices and mergers.

In the merger of Cresco and Origin House, Canaccord has been Cresco’s advisor. Canaccord’s analyst and salespeople talked up Cresco’s stock this week—potentially lifting the price of Cresco’s merger currency while there’s haggling over the deal.

Most financial firms restrict their analysts and salespeople from pushing a stock when the firm’s bankers are engaged in its underwriting or merging. After Cresco’s merger news this week, Canaccord analyst Derek Dley affirmed his “speculative buy” rating on Cresco stock and wrote that the deal’s implicit approval by U.S. antitrust regulators should be a “substantial catalyst” for the stock and the cannabis sector.

Canaccord salespeople also reached out to clients. “This is a major positive” for Cresco, wrote one salesman, who assured customers that the unsettled terms of Cresco’s deal could be resolved with a slight tweaking of the acquisition price.

Barron’s asked Canaccord and its analyst Dley if the firm should be recommending Cresco stock when its bankers were advising Cresco on a stock-denominated acquisition. A Canaccord spokesperson said the firm’s Cresco research clearly discloses the banking relationship and conforms to the rules of Ontario’s security regulator and the Canadian investment industry’s self-regulatory group. Those rules allow otherwise-restricted bankers to continue publishing recommendations on a liquid security that their analysts regularly cover.

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