Shares of cannabis company Tilray Inc. (TLRY) - Get Tilray Brands, Inc. Report surged in after-hours trading Tuesday after a report saying the company is in advanced merger talks with Aphria Inc. (APHA) - Get Aphria Inc Report.
An announcement of a deal could come as soon as Wednesday, CNBC’s Sara Eisen tweeted, following a report on Bloomberg Canada. Both companies are headquartered in Canada.
The merged company would keep the Tilray name, while Aphria shareholders would retain a larger stake and a majority of the board seats, according to the report. The combined operation would likely move its headquarters to the U.S. as it pursues increased market share, according to the report.
Marijuana legalization efforts have continued to advance in the U.S. in recent years. measures to legalize recreational or medicinal use won voter approval in all five states where they appeared on the ballot in November.
Tilray stock gained $1.41, or 18%, to $9.28 in after-hours trading.
Aphria shares rose $1.21, or 15%, to $9.33.
Cannabis stocks were mostly higher Tuesday on an up day for Wall Street. Among notable cannabis stocks, 11 rose while 3 fell.
The Horizon Marijuana Life Sciences ETF (HMLSF) rose 10.12 cents, or 1.56%, to $6.59.
Large-cap stocks with notable cannabis initiatives were mixed.
The S&P 500 index rose 47.13 points, or 1.29%, to 3,694.62.