Aphria and Tilray Combine to Create World's Biggest Cannabis Company

Two of North America's biggest cannabis companies combine into global giant.

  • Tilray and Aphria announce merger to create $3.9 billion giant
  • Combined revenue is $685 million over the last year
  • Deal to enhance U.S. and international presence
  • Approx C$100 million of annual pre-tax cost synergies expected within 2 years

Canada's Tilray and Aphria have announced they will be merging in an all-stock deal that creates the world’s largest cannabis company by sales. Tilray shares listed on the Nasdaq index were up nearly 30% in pre-market trading on the news.

The combined company has equity value of $3.9 billion and revenue of $685 million in the last 12 months. It will operate under the name "Tilray" and trade under the "TLRY" ticker on the Nasdaq index. Under the terms of the deal, Aphria, the larger of the two, will pay a 23% premium to Tilray’s December 15 closing price of $7.87 and its shareholders will own 62% of Tilray’s stock. Aphria CEO Irwin Simon will be the group's chair and CEO, and Tilray CEO Brendan Kennedy will become a board member. 

"We are bringing together two world-class companies that share a culture of innovation, brand development and cultivation to enhance our Canadian, U.S., and international scale as we pursue opportunities for accelerated growth with the strength and flexibility of our balance sheet and access to capital,” said Simon in the press release. Approximately C$100 million of annual pre-tax cost synergies is expected within 24 months of the completion of the transaction. 

The merger is said to create an "unrivaled European platform." Tilray has a 2.7 million square foot, state-of-the-art medical cannabis production facility in Portugal which provides tariff-free access to the European Union. Aphria currently has a medical cannabis distribution subsidiary in Germany.

The deal also targets growth in the U.S. with consumer packaged goods brands SweetWater Brewing Company and Manitoba Harvest. Bloomberg sources say the new headquarters will be moved to the U.S. as sales increase in lockdown and more states legalize the product despite it being illegal under federal law.


And there's plenty of reasons to legalize it, especially as state revenues suffer during the pandemic. Illinois just revealed it raked in $22.88 million in taxes related to cannabis sales in October, almost equal to the $25.74 million it took in from alcohol sales taxes. Illinois became the 11th state to legalize marijuana for recreational use in January this year. The November elections saw four more states (New Jersey, Arizona, South Dakota, and Montana) vote to fully legalize marijuana, but enactment of the bills is pending.

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