Cannabis companies Aphria and Tilray who are based in Canada announced plans to merge in a transaction that will create an international marijuana firm with combined equity value of $3.9 Billion dollars! The new company will be the “world’s largest global cannabis company” the companies said in a joint news release. Under the terms of merger company will operate under the Tilray name with offices in the United States, Canada, Portugal and Germany. In addition to competing in Canada’s recreational marijuana market, Aphria and Tilray said the new company would be “well-positioned” to pursue European growth opportunities, building on Aphria’s German assets and Tilray’s Portugal production facility.
The companies highlighted their consumer packaged goods infrastructure in the U.S., including Aphria’s recently acquired craft brewer SweetWater Brewing Co. and Tilray’s Manitoba Harvest hemp foods business. “The combined company is expected to have a strong, flexible balance sheet, cash balance and access to capital, giving it the ability to accelerate growth and deliver attractive returns for stockholders,” Tilray and Aphria in the release.
The company executives expected the merger to close in the second quarter of 2021, subject to approvals from shareholders, regulators and courts. The combined firm would be led by Aphria CEO Irwin Simon who said he aims to capture at least 30% market share in Canada. A very realistic outlook for the combined company’s European operations, saying he sees “a good chance” for recreational legalization in Germany and Portugal in 2021. Germany rejected a recreational legalization bill in October. As for the company’s U.S. plans, Simon noted that the combined company still won’t be able to operate there in a plant-touching capacity.
The companies believe it’s “extremely likely” that every European Union country will legalize medical marijuana in the next two years, particularly in light of a recent United Nations vote to reschedule cannabis. “There are tremendous opportunities for growth, not only in the existing European market but in in new markets, medically, such as France,” he said. “I think that is going to lead to more conversations around adult-use legalization in Europe, occurring not only in 2021, but in the following years.”
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