RE:Opinions welcomed I think the merger is fantastic news, I'll take on all of Tilray's blemishes knowing what we are capable of and how it expands and compliments our portfolio and international presence.
Tilray can use their existing ATM program and renegotiate debt like Aphria did, I don't see dilution becoming a "sky is falling" scenario. Remember the 100 million is in reducing operating costs like administrative and distribution. Aphria's low cost will immediately help Tiray's margins so that's not even included in the 100 million. Plus we can sell any assets like greenhouses before dilution is necessary.
During the last earnings call Aphria was expected by management to be FREE CASH FLOW POSITIVE in Q3 which we entered in December, so we shouldn't be bragging about EBITDA anymore. These statements were made before Sweetwater and Tilray news even, so considering Tilray on its own is also supposed to be EBITDA positive I think that puts us in a super strong position. Closing the deal between April-June seems strangely long to me considering how quick Sweetwater was, but it's max 6 months so I guess not that long in the grand scheme.
Aphria has new avenues to increase revenue on its own, like Israel and Poland, so our revenue should be increasing. Sweetwater will be a big bump on revenue percentage growth for the upcoming four quarters and may soften anything else like decrease in Canadian recreational revenue or CC Pharma. Some expect this in the upcoming quarter, but depends if you want to focus on the selling price of marijuana or the difference in our costs. I'd focus less on selling price per gram and look at the exponential growth of opening stores across Canada and all have remained open throughout COVID. Simon wants us to get to a 25-30% market share once we get to scale which is astonishing for any industry. What a year to be pushing through.
It's tough to swallow that tech companies can burn money for 5-10 years in their "growth" stage but while we're growing we're forced to turn a profit. We're doing phenomenal financially. Tilray's CEO talks about the EU leglaizing medical over the next 24 months which is also underappreciated. I think Dems have a better chance of taking BOTH seats now than I thought two months ago. That's a short term catalyst, but even if that fails your view should be further than the next two years. 2021 will be a great year to put marijuana back in focus for investors once all the vaccinating headlines start to diminish over the summer, as South America and Europe will propose several laws.
The future is very bright. Considering APHA+TLRY market cap is 4.59 billion CAD combined, while Canopy is 12.1, Curaleaf is 8.61 and Trulieve is 4.71 I think the choice should be obvious :)