Cannabis shares are smokin’ this morning on the news that Canadian pot producers Tilray (NASDAQ:TLRY) and Aphria (NASDAQ:APHA) will merge in an all-stock deal to create an entity with an equity value of 4.8 billion CAD ($3.8 billion), Bloomberg reported, citing a statement and interviews with the companies’ CEOs.
The new company would be the world’s biggest marijuana production and distribution company. It will trade on the Nasdaq under Tilray stock’s TLRY ticker. Aphria shareholders will own 62% of Tilray’s shares.
Aphria CEO Irwin Simon said the deal will allow the company to expand outside of Canada. It plans to take advantage of potential federal legalization in the United States, as well as further legalization in Europe.
More Tie-Ups Ahead?
Last month’s U.S. elections saw more states legalize or decriminalize recreational marijuana use.
The Tilray-Aphria tie-up is about more than just joints, however. Together, the combined company will lead the market in cannabis-infused drinks. Earlier this year, Aphria struck a deal to acquire U.S. craft beer maker Sweetwater Brewing, while Tilray has a pot-powered beverages partnership with Anheuser-Busch InBev (NYSE:BUD).
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.