Tilray and Aphria merge to create the world's biggest cannabis company
Can you do the Can Can? Canadian cannabis icons Tilray and Aphria are combining to form Earth's largest pot company by sales. The new company will keep Tilray’s name (heated marriage decision) and will trade on the Nasdaq. Fun fact: it's basically impossible for American cannabis stocks to trade on US exchanges, since marijuana is illegal at the federal level.
- Geographic FOMO: Canna companies don't know where legalization will strike next, so they're trying to plant their weeds wherever the green light seems likely.
- Ameri-canna: Aphria needs to expand outside of Canada. Tilray's US biz gives it nice exposure to the American market as more states are legalizing.
- Euro-canna: As more European countries legalize medical marijuana, Tilray and Aphria can combine their European production facilities to scale and distribute faster.
THC sippin'... Tilray and Aphria are also combining their bev businesses. Aphria acquired SweetWater Brewing Company for cannabis-infused beers like "420 Strain IPA" — Tilray partnered with Bud-maker AB InBev for CBD and THC drinks. These "beyond the leaf" products could be gateway goodies for weed to go mainstream.
Cannabis is freshman year Harry Potter... Hasn't really done much, but gets all the attention. Even after their stocks jumped on the news, Tilray and Aphria's combined market value is just ~$3.6B — for reference: Sam Adams-maker Boston Beer is worth over 3X that. Combined, Aphria and Tilray make less than $700M in sales per year — that's less than Juul's sales in 2018. So canna companies have to consolidate while they wait for more legalization.