Earlier this week, the rumor mill started to imply that the merger between Aphria, Inc. (APHA.TO) (APHA) and Tilray, Inc. (TLRY) could be in trouble. 

The basis of the opinion is related to how Tilray extended the date of the shareholder meeting and lowered the bar to pass amendments. Previously, Tilray required a majority of shareholders to be present for special shareholder meetings.

Last week, Tilray’s board approved an amendment that only requires there to be one-third of voting shareholders to reach a quorum. Several media outlets and analysts tried to imply that Tilray was having a challenging time in regards to gathering enough votes to pass the mega-merger agreement. 

When looking at the other side of the transaction, Aphria did not have a problem passing the mega-merger amendment at its special shareholder meeting and the vast majority of shareholders voted in favor of it. 

If there was a pause on Tilray’s side, it was most likely related to Aphria’s third-quarter financial results. Aphria reported quarterly earnings that came in well below expectations and the market responded negatively to it. Although the earnings missed expectations, we still consider Aphria to be an attractive partner, especially due to the recent acquisition of SweetWater Brewing Company. 

We 100% expect the merger to be approved at Tilray’s special shareholder meeting and believe the recent changes to the structure of the meeting are not of significance. The combined company will have a leading position in the international cannabis market and will have a much larger market share in Canada.

Once Tilray shareholders vote on the transaction, the deal should be completed shortly after and this is an event that we are closely following.