Cannabis firms Tilray, Inc. and Aphria, Inc. announced today the completion of their previously agreed upon merger, creating what they say will be “the world’s largest global cannabis company.”
The combined company — with a market capitalization valued at $8.2 billion at the end of trading on April 30, 2021 — will operate under the Tilray name moving forward and continue trading on the Nasdaq under TLRY and will begin trading on Toronto Stock Exchange under the same ticker symbol beginning May 5.
Tilray estimates $81 million of annual pre-tax cost synergies within the first 18 months, planning to achieve that in cultivation and production, cannabis and product purchasing, sales and marketing, and corporate expenses. According to a 2020 press release, the two companies posted $685 million in revenue on a pro forma basis for the last 12-month period. Products include flower, pre-roll, oils, capsules, vapes, edibles, and beverages.
Aphria’s Irwin D. Simon will serve as chairman and CEO for the combined company. He will also chair the eight-member board of directors.
“Our focus now turns to execution on our highest return priorities including business integration and accelerating our global growth strategy. COVID-19 related lockdowns have presented unique challenges across Canadian and German markets,” Simon said in a press release. “As these markets begin to re-open, Tilray is poised to strike and transform the industry with our highly scalable operational footprint, a curated portfolio of diverse medical and adult-use cannabis brands and products, a multi-continent distribution network, and a robust capital structure to fund our global expansion strategy and deliver sustained profitability and long-term value for our stakeholders.
“Our global team is laser-focused on turning potential into performance and addressing consumer and patient needs for safe, innovative, adn high-quality products,” he continued.
Tilray currently operates in Canada, the U.S., Europe, Australia, and Latine America. The combined company will maintain offices in Portugal and Germany, as well as the U.S. (New York and Seattle) and Canada (Toronto, Leamington and Vancouver).
Tilray is also expected to be a leader in the U.S. cannabis markets, if made federally permissible, in large part due to Tilray’s existing consumer packaged goods presence, including Manitoba Harvest — an early innovator in CBD, hemp, and wellness products — and SweetWater — a cannabis lifestyle branded craft brewer that Aphria acquired in December. The company is expected “to leverage SweetWater’s craft beer manufacturing and distribution network to build brand awareness for the combined company’s leading brands via craft beers, hard seltzers, and other beverages,” according to the 2020 release.
Within the beer space, Tilray has already established a powerful ally. In December 2018, the company announced a joint venture in Canada with Anheuser-Busch InBev to research non-alcoholic beverages infused with THC and CBD, agreeing to each invest up to $50 million. A-B subsidiary Labatt Breweries of Canada partnered with Tilray subsidiary High Park Company, a Canadian producer and distributor of cannabis brands.
The merger of Tilray and Aphria comes just two weeks after The U.S. House of Representatives passed the SAFE Banking Act. The bill would allow banks to provide services to cannabis companies, clarifying that legitimate cannabis businesses will not be considered illegal, according to Reuters. Legislation now moves to the Senate, where Senate Majority Leader Chuck Schumer has already expressed support.