Marijuana Merger Is Bet on 'Cannabis Lifestyle' Future
Aphria and Tilray are combining ahead of possible policy changes that would allow the industry to flourish in the U.S. Expect more dealmaking.
The marijuana industry is on the verge of taking off and is just waiting for the signal.
Photographer: Justin Sullivan/Getty Images North AmericaCanadian cannabis producers — already enticed by the larger U.S. consumer market — see the incoming Biden administration bringing the nation that much closer to legalizing the substance. Against this backdrop comes the news that Aphria Inc., a Leamington, Ontario-based marijuana company, is acquiring Delaware-incorporated Tilray Inc., creating a bigger player in a growing field. The merger announced overnight is likely to kindle even more dealmaking in and around the industry as larger consumer-products makers also eye the opportunity to sell pot-infused foods, beverages and skin-care items. It’s an industry on the verge of taking off and is just waiting for the signal.
The all-stock transaction rewards Tilray shareholders with a 23% premium to Tuesday’s closing price and hands Aphria shareholders 62% percent ownership of the combined entity, which will have its principal U.S. offices in New York and Seattle. While it will retain the Tilray name and trading ticker, the company is to be led by Aphria CEO Irwin Simon, who previously founded high-flying natural-foods maker Hain Celestial Group Inc. Tilray soared 20% in early trading Wednesday, while Aphria rose 1.6%.