Cronos Group Inc.’s stock was up in premarket trading on Friday after the Canadian cannabis company said it is reviewing unsolicited indications of interest from potential buyers.

The company said late Thursday that it has received “a number” of inquiries about “a potential transaction involving Cronos.”

It said it is in the early stages of reviewing the proposals and it can make no assurances about any deal announcements.

Cronos CRON, -4.08% CRON, -3.83% stock was up 0.5% in premarket trades Friday after dropping 4% in regular trading in the previous session.

Reuters reported late Thursday that Cronos was working with a financial adviser and that U.S. cannabis company Curaleaf Holdings CURLF, +2.19% was among the potential buyers. Cronos is backed by tobacco giant Altria MO, +0.24%, which owns 41% of its stock after investing $1.8 billion in the company in 2018.

Curaleaf and Altria have not commented, the Reuters report said.

Any potential deal would likely be made with Curaleaf stock, Jefferies analyst Owen Bennett said in a research note viewed by MarketWatch.

If Altria decides to convert its ownership in Cronos to Curaleaf stock, it “could provide a massive endorsement to Cura and the future of the U.S. industry, in turn attracting more institutional ownership,” Bennett said.

Jefferies would support the deal but said it offers little cost-savings benefits since the two companies don’t have overlapping businesses, he said.

“For Curaleaf, and its long-term global ambitions, as well as potential near-term institutional ownership, assuming little premium to cash value, we would be supportive,” Bennett said. “For Altria, while we think they would want out of Cronos, with a cash deal unlikely, we’re doubtful they would take shares in an MSO at this stage. Huge for U.S. sentiment if they did though.”

Also Read: Canopy Growth’s stock pops after it reveals latest plan to enter U.S. cannabis market

The deal talk comes amid potential consolidation in the Canadian market as supply has outpaced demand for cannabis and depressed stock prices throughout the sector.

Hexo’s former chief financial officer told MarketWatch he expects more deal-making in the Canadian cannabis sector after the company was acquired by Tilray Inc. TLRY, -5.49%.

Also Read: As Tilray buys Hexo, former exec sees more consolidation ahead in Canadian cannabis

Overall, cannabis stocks have been moving down sharply in 2023 amid dim prospects for federal legalization in the U.S. and oversupply in the Canadian market.

Cronos stock is down 26% in 2023, compared to a 29.6% drop by the ETFMG Alternative Harvest ETF MJ, -2.60% and a 33.2% loss by the AXS Cannabis ETF THCX, -3.89%. Curaleaf stock is down 19.5% so far this year.

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