Shares of Canadian cannabis companies Aphria Inc. and Tilray Inc. fired at the end of negotiations on Tuesday following a report that companies are in advanced talks to merge.
BNN Bloomberg reported Tuesday afternoon that Aphria APHA,
APHA,
and Tilray TLRY,
could announce a merger as early as this week and are discussing the combined company’s move to the US, based on news from unnamed sources. The same news source reported over the summer that Aphria was in talks to merge with Aurora Cannabis Inc. ACB,
but this agreement did not come to fruition.
BNN reported that Aphria would be the dominant entity in the merger in the current talks, retaining 60% of the combined entity’s ownership. According to the report, Aphria CEO Irwin Simon would lead the merged company, while Tilray CEO Brendan Kennedy would reach the board instead of holding an executive role, according to the report , that the deal could still be undone.
Canadian cannabis stocks rose after the country became the first industrialized nation to legalize recreational pot sales, but fell sharply after companies fell short of large-scale growth expectations. . Shares have retreated over the past month as hopes for legalization in the United States rose after the November election.
See also: Aphria agrees to buy the American craft beer Sweetwater, known for its ‘420’ brand beers
Aphria was one of the first cannabis companies to tackle a calculation, shaking its executive team in early 2019 after short sellers publicly questioned some of the offers the top executives had made. Tilray was the first large car company to be listed on a U.S. stock exchange and shares rose to more than $ 100 not long after it went public in July 2018 before falling sharply.
Both shares rose more than 15% in out-of-hours trading on Tuesday after the report was released. Tilray closed with a gain of 6.8% to $ 7.87, while Aphria added 3.1% to $ 8.12 in the regular session.