Thinking of buying pot stocks for the new year? Check out these two companies and their soaring revenues…
Up 64% and 34%, respectively, Tilray (NASDAQ:TLRY) and HEXO (NYSE:HEXO) are among the best-performing cannabis stocks in the industry over the past three months. And the momentum seems to be just getting started, as they both have massive upside potential going into 2021.
When it comes to buying pot stocks, the best time to take a position is when they are about to fly high due to significant catalysts on the near-term horizon. It would be even better to get them at a great price, ensuring long-term wealth multiplication thanks to taking positions at cheap valuations. Today, let’s look at two companies in the sector that fit these criteria, and how they could potentially make you more prosperous in 2021.
1. Tilray
Medical cannabis company Tilray is about to merge with Canada’s biggest pot grower by revenue, Aphria (TSX:APHA)(NASDAQ:APHA), via a reverse takeover. Each Aphria shareholder will own 0.8381 shares of Tilray for each share they own after the deal, which will likely close by the second quarter of next year.
After the merger, Aphria shareholders will control 62% of the combined company, while Tilray shareholders will own the remaining 38%. The combined entity will do business under Tilray’s trade name.
The agreement will create the largest cannabis company in the world by revenue. In the past 12 months, Aphria-Tilray generated CA$874 million in sales, surpassing that of U.S. pot grower Curaleaf Holdings‘ (CNSX:CURA) (OTC:CURLF) CA$842 million in revenue.
The two companies will hold the largest market share (17.3%) to tackle the $2.4 billion Canadian marijuana industry. With the consolidation, Aphria-Tilray will boast a complete portfolio of cannabis products, including dried flower, pre-rolls, oils, capsules, edibles, vapes, and beverages.
There are also exciting opportunities ahead with the continued growth of Aphria in the German medical marijuana industry, and the potential to partner with its new subsidiary SweetWater Brewing to develop cannabis-infused craft-beer. In the first quarter of 2021 (ended Aug. 31), CA$79.6 million of Aphria’s CA$145.7 million in sales came from its German unit, CC Pharma.
Simultaneously, the company’s $300 million acquisition of SweetWater Brewing will bring in an additional $66.6 million of revenue per year. SweetWater currently has the best-selling newly released craft beer brand in the U.S., 420 Strain. That’s not all; Aphria-Tilray has one more subsidiary for its U.S. expansion plans — Manitoba Harvest, which sells CBD products in 17,000 stores across North America.
The two pot giants expect to generate $78 million in expense reductions over the next two years. For all their potential, Aphria-Tilray remains…
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