Earlier this week, Aphria Inc. (APHA.TO) (APHA) reported a major development as it relates to the European Union’s (EU) cannabis market and believes that our readers need to be aware of the significance of the announcement as it relates to the previously announced mega-merger with Tilray Inc. (TLRY).
As standalone businesses, both Aphria and Tilray are well positioned to capitalize on the European cannabis market. Following the completion of the mega-merger, the combined company will have the most market share in the EU and in Canada’s legal medical and recreational cannabis industries.
CC Pharma is a wholly owned subsidiary of Aphria and serves as the EU distribution arm of the business. During the last year, CC Pharma has reported impressive growth and it has played a key role in Aphria’s success in the EU.
The major development that Aphria reported earlier this week is related to a commercial supply agreement that CC Pharma entered into with Materia Deutschland. Under the agreement, CC Pharma will distribute Aphria-branded flower products across Materia Deutschland’s pharmacy network in Germany. Materia is a medical cannabis and wellness company that is focused on expanding its portfolio of medical cannabis products being offered to pharmacies in the EU (especially Germany).
Under the terms of the agreement, CC Pharma will import, and batch release the products, with Materia Deutschland taking responsibility for pharmacy sales and fulfillment. By adding Aphria’s flower to Materia Deutschland’s portfolio of cannabis products, it is enhancing the types of cannabis products that are being offered to customers and increase the amount of market share that it has in Germany. In the coming weeks, Materia will start to distribute and sell Aphria-branded products to pharmacies and we are bullish on the growth prospects that are associated with the relationship.
Tilray operates a state-of-the-art EU GMP facility in Portugal and we expect the facility to serve as a major growth driver for the combined company. Once the acquisition is completed, we expect the combined company to record a massive spike in revenue that is derived from the EU’s cannabis market. Going forward, we expect the combined company to discover substantial synergies as it relates to the EU and consider this to be a crucial pillar of the long-term story.
We are excited about the transaction for a variety of reasons and want to highlight what we consider to be the most significant:
- We expect the combined company to find massive synergies between the businesses
- the combined company is expected to have a leading position in Canada’s recreational cannabis market
- Aphria’s acquisition of Sweetwater Brewing Company provides the combined company with substantial infrastructure to capitalize on the US market
- the combined company will have a leading position in strategic international markets
- the transaction will further enhance the diversity and the strength of the leadership team
We are bullish on the growth prospects that are associated with the Tilray-Aphria merger agreement and believe that our readers need to be aware of the opportunity. If you are interested in learning more about the Aphria-Tilray merger, please send an email to support@technical420.com with the subject “Aphria-Tilray Merger” to be added to our distribution list.
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AUTHORED BY
Michael Berger
Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.