Aphria stock and Tilray stock surged Wednesday after announcing a merger that would create the biggest weed company by revenue. Other marijuana stocks also rose.


Under the deal, which was first reported by BNN Bloomberg Tuesday, Aphria (APHA)shareholders will receive 0.8381 shares of Tilray’s (TLRY) for each Aphria stock they own. Aphria will own about 62{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} of the combined company.

The merged company will take the Tilray name and to trade under TLRY stock ticker.

While the combined equity value of about $3.9 billion will still be smaller than that of Canopy Growth’s (CGC), Aphria and Tilray say their combined revenue of $685 million will create the world’s largest cannabis company by that metric.

Aphria’s current chairman and CEO, Irwin Simon, will take on those roles for the combined company. Tilray CEO Brendan Kennedy will be named to the board, along with another Tilray executive.

Aphria and Aurora Cannabis (ACB) were rumored to be in merger talks earlier in the year. The merger talks would come as Canada’s pot industry looks for ways to lean down, after years of losses.

Aphria in November said it would enter the U.S. via an agreement to buy craft brewer Sweetwater Brewing Co. for around $300 million. SweetWater is known for beers that use terpenes and hemp flavoring. Aphria said the brand was “closely aligned with a cannabis lifestyle.” Tilray owns Manitoba Harvest, a hemp company that sells products in the U.S. and Canada.

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Aphria, Tilray Lead Marijuana Stocks Higher

Aphria stock rallied 6.5{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811} to 8.65 in premarket trading on the stock market today. Tilray jumped 27{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}. Canopy Growth added 1.7{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}. Cronos Group (CRON) was up 3.9{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}. Aurora Cannabis gained 1.7{c34e2c9cd63a11c97fab811dbaaefe0cfbb1edd2527888e1a44d36f3491ee811}.

President-elect Biden has said he supports federal marijuana decriminalization. This month, the U.S. House of Representatives voted to pass the MORE Act, which would remove marijuana from the list of controlled substances.

The bill, however, faces little chance in the Senate. Two runoff elections next month in Georgia will determine the balance of the Senate, and how much advantage the Democrats will have in passing cannabis reform.

New Jersey, Arizona, Montana and South Dakota on Election Day approved ballot measures to legalize recreational marijuana. South Dakotans and Mississippi voters also backed some degree of medical use.


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