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What Will a Combined Tilray and Aphria Look Like After Their Merger?

By Eric Volkman and Corinne Cardina - Feb 16, 2021 at 12:00PM

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The new company will have a comparatively big presence overseas, for one thing.

As the marijuana world knows by now, Tilray (TLRY) and Aphria (APHA) are combining in a big weed-stock merger. 

In this segment from Motley Fool Live recorded on Feb. 5, 2021, longtime Motley Fool contributor Eric Volkman and healthcare and cannabis bureau chief Corinne Cardina talk about what shape and form Tilray 2.0 is likely to take.

Corinne Cardina: Tilray and Aphria, they said they were going to merge. I think it was back in December. What is this new entity going to look like? When is it going to close?

Eric Volkman: We don't know when it's going to close. They are still sewing it together. Basically, we can say it's going to be a beefed-up version of Aphria. Aphria is going to hold about 63% of the merged entity. It's going to be called Tilray. They didn't delve into the reasons why, but I suspect because Tilray is a more recognized name. There's more visibility with that company.

[The new Tilray is] going to be big. According to them, by the standard of 12 months trailing revenue, they will be the largest marijuana company in the world, which is a weird metric to use. But anyway, they're going to be one of the biggest companies in the world.

They're also going to have a lot of range, which is why I find them interesting. They are active in almost every category. They have retail, they have considerable medical marijuana assets. Tilray has been busy in terms of the international sphere, which has scope to get interesting. They signed a deal to ship... They have a presence in Portugal already, one of the scattershot European countries that has legalized medical marijuana. They have a facility there and on top of that in Portugal, they also received their first medical license. They'll be selling there and they'll be exporting to Spain.

Spain is a little bit more of a fuzzy story. Medical marijuana isn't directly legal there, but it's not illegal. It's one of these gray areas where you can sell it if you do it the right way. It's teaming up with the Spanish company in order to do that. Almost very literally it's establishing a nice foothold in Europe, which is definitely going to do some good for the combined company when they do fuse together.

Aphria already has a pretty important medical asset in Germany, a company called CC Pharma, which is a distributor, and that contributes quite a bit to their revenue. I think it's something [like] 40% of total revenue. All those European medical assets combined, are going to give the combined company a nice leg up in that market.

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