What a Merger Between Aphria Inc and Tilray Inc Could Spell for the Cannabis Sector

Two Canadian cannabis giants announced that they will be completing an all-stock merger to create the largest global cannabis producer. This news dropped following announcements by both Aurora Cannabis Inc. and Canopy Growth Corp. that they are cutting staff, production, and facilities.

It wouldn’t be a surprise to see at least one more large merger as Canadian cannabis looks to reduce costs and revamp existing portfolios. 

While Cannabis stocks have enjoyed a small rally on expectations that a U.S. under Joe Biden could ease federal regulations currently restricting cannabis companies; however, the industry is not out of the woods as it looks to restructure to a more economically sustainable model.

Aphria has positioned itself for U.S. growth through it’s purchase of SweetWater Brewing last month, offering an American distribution post for the cannabis giant.

Tilray will continue to trade on the Nasdaq with Aphria holding a private unit of the company and Aphria CEO Irwin Simon at the helm.

Aphria’s Chairman and Chief Executive , Irwin D. Simon had this to say about the merger “This is an exciting day for both companies including our 2,500 employees, for the cannabis industry, and for patients and consumers around the world…Our highly complementary businesses create a combined company with a leading branded product portfolio, including the most comprehensive Cannabis 2.0 product offerings for patients and consumers, along with significant synergies across our operations in Canada, Europe and the United States.”

This news could serve as a potential catalyst for more action in the cannabis sector as companies position themselves to establish dominance in a sector that offers massive growth potential but has more recently been battered. 

The cannabis industry remains nascent and as such, we still have much to learn. If you are interested in writing about the most recent cannabis news fire an email over to community@instaleaf.ca and we’d be happy to chat. Stay healthy, stay happy, stay lifted.

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