The merger comes as Canada's pot industry grapples with losses and debt, and as it tries to chart a course forward in the U.S.' widening legal territory.
Under the deal, the new company will have offices in the U.S., Canada, Portugal and Germany, with estimated market share of around 17% in Canada and $685 million in yearly revenue. The merged company will take the Tilray name and trade on the Nasdaq under the TLRY stock ticker.
Aphria (APHA) CEO Irwin Simon will become CEO and chairman of the new company once the deal closes. The deal is expected to close in the second quarter of next year.
Tilray's (TLRY) current CEO, Brendan Kennedy, will hold a seat on the company's nine-member board. However, seven of the seats will be held by current Aphria directors, including Simon.
The combined value of about $3.9 billion for the merged company would still be smaller than that of Canopy Growth (CGC), which is worth $9.9 billion.
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Aurora Cannabis (ACB) laid off 200 employees and slashed production at one of its big production facilities. Aphria and Aurora were rumored to be in merger talks earlier in the year.
MORE Act, Runoffs
This month, the U.S. House of Representatives voted to pass the MORE Act, which would remove marijuana from the list of controlled substances. The bill would decriminalize cannabis at the federal level and let states make their own laws.
The bill, however, faces little chance in the Senate. And some lawyers and pot companies have said decriminalization wouldn't necessarily help the legal marijuana business.
New Jersey, Arizona, Montana and South Dakota on Election Day approved ballot measures to legalize recreational marijuana. South Dakotans and Mississippi voters also backed some degree of medical use. Two runoff elections next month in Georgia will determine the balance of the Senate, and how much advantage the Democrats will have in passing cannabis reform.
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