Aphria & Tilray Combine to Form World’s Largest Cannabis Firm

Tilray and Aphria, two licensed cannabis producers in Canada, have announced they are combining to create the world’s largest cannabis company based on pro forma revenue.

Full story after the jump.

Canadian cannabis companies Aphria and Tilray on Wednesday announced they are combining businesses, creating the world’s largest cannabis company based on pro forma revenue. Combined, the company’s pro forma revenue is $685 million.

Once combined, it will operate under the Tilray corporate name with shares trading on the NASDAQ under the ticker symbol “TLRY.”

Under the terms of the agreement, Aphria shareholders will receive 0.8381 shares of Tilray for each Aphria common share, while Tilray holders will continue to hold their shares with no adjustment to their holdings. Upon completion of the deal, Aphria shareholders will own approximately 62 percent of the outstanding Tilray shares on a fully diluted basis, resulting in a reverse acquisition of Tilray and representing a premium of 23 percent based on the share price at market close on December 15, 2020, the company said.

The combined company will employ about 2,500, according to Aphria’s current Chairman and CEO, Irwin D. Simon. Simon will serve as chairman and CEO of the combined company.

“We are bringing together two world-class companies that share a culture of innovation, brand development and cultivation to enhance our Canadian, U.S., and international scale as we pursue opportunities for accelerated growth with the strength and flexibility of our balance sheet and access to capital.” – Simon in statement

The board of directors will be comprised of nine members, seven of which are current Aphria directors and two will be from Tilray, including current company CEO Brendan Kennedy, and another which will be designated.

“By leveraging our combined strengths and capabilities, we expect to be able to meet the needs of consumers more effectively all over the world and advance patient care,” Kennedy said in a press release. “With a strong financial profile, low-cost production, leading brands, distribution network and unique partnerships, we believe the combined company will be well-positioned to deliver sustainable, attractive returns for stockholders.”

The companies have reported a combined $232 million in gross revenues over the last year. On a pro forma basis, from August to October 2020, the combined company would have held a 17.3 percent retail market share, which would have been the largest share held by any Canadian licensed producer and 700 basis points higher than the next closest competitor.

The deal still needs to be finalized by regulators.

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