The cannabis industry has been seeing a lot of green despite the lockdowns seen across Canada during a COVID-19 filled 2020. According to Statistics Canada, purchases of recreational cannabis products doubled from 2019 to 2020, totalling about $2.6 billion.
Tilray still a top performer
With a recent slump the past week, it is a great opportunity to load up on cannabis stocks while they are discounted. One such stock to keep an eye out for is Tilray with the ticker symbol TLRY.
The first week of March was tough, where Tilray saw a 17% decrease compared to the previous week. But keep in mind that since the start of the year Tilray has increased by nearly 150%, making it one of the best-performing stocks so far.
This has made the stock popular among traders with an average daily trading volume of over 40 million shares. The company has great year-to-year financial performance as well, going from $153.84 million in revenue in 2019 to $191.34 million in 2020. The overall performance that Tilray has seen makes it a must to watch out for in the coming months.
Aphria-Tilray merger on the horizon
There’s more good news, especially for fans of Aphria and the previously mentioned Tilray. The two companies will be merging as soon as they close in Q2, which could happen as soon as April.
This would create the world’s biggest marijuana company, even capable of putting something like Canopy Growth into the shadows, based on market cap alone. In other terms, the merger would account for roughly 20% of all sales volume in Canada.
The combined entity of the two companies will still operate under the name Tilray, however, Aphria brings a lot to this merger. Aphria operates within Canada, the primary distributor of medicinal cannabis to Germany and has other operations in over 10 other countries like Italy and Denmark.
On top of that, the recent acquisition in November 2020 of SweetWater Brewing Company expands the number of products they will be able to offer. The complete merger will see a massive offering of products ranging from flowers to vapes, edibles, and beverages.
A quick look at Aphria
Taking a look at Aphria, they also have some really solid financial performance. From 2019 to 2020, Aphria managed to increase its revenue from $237.11 million to $542.34 million respectively.
With an average daily trading volume of nearly 24 million shares, it is still quite a popular pick and a must to keep your eyes on. Especially with the aforementioned merger coming into play soon, shares of Aphria will be converted at a rate of 0.8381 to 1, while shares of Tilray will not be adjusted.
Key Takeaways
These are just two stocks to keep in mind going into the coming months—more are sure to pop up as time goes on. It’s important to remember that while cannabis stocks are looking good, they can still be risky.
After the cannabis market famously collapsed back in 2019, it’s taken them nearly two years to climb back up to where they were previously. Do your best to be safe and happy investing.