Marijuana Merger Is Bet on ‘Cannabis Lifestyle’ Future

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The all-stock transaction rewards Tilray shareholders with a 23% premium to Tuesday’s closing price and hands Aphria shareholders 62% percent ownership of the combined entity, which will have its principal U.S. offices in New York and Seattle. While it will retain the Tilray name and trading ticker, the company is to be led by Aphria CEO Irwin Simon, who previously founded high-flying natural-foods maker Hain Celestial Group Inc. Tilray soared 20% in early trading Wednesday, while Aphria rose 1.6%.

The deal marks a turnaround for Aphria, which under previous leadership was tarnished by allegations that executives engaged in self-dealing transactions and other criticisms by short sellers. Pot stocks broadly, at one point market darlings, also suffered a fall from grace amid a confluence of operational difficulties and growth-stunting U.S. regulations. The Covid-19 pandemic hasn’t helped, either.

Now, though, a Joe Biden presidency may portend policy changes that would allow the cannabis industry to better flourish in the U.S., even if the government stops short of legalizing pot at the federal level. That’s something industry analysts suspect is still a few years away. In November, four more states passed ballot measures to allow for recreational use, and even a medical marijuana proposal in the deeply red state of Mississippi drew overwhelming support. It was…

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