Canadian cannabis companies Aphria and Tilray announced Wednesday they would merge to form the world's biggest pot producing group based on sales.
On share prices at the close on Tuesday, the firm's stock market value would be roughly Can$5 billion (US$3.9 billion), the companies said in a statement.
The all-stock merger comes amid a move to consolidate the relatively new but booming recreational cannabis sector in Canada, where the drug has been legal since October 2018.
The new group, which will operate under the Tilray name, will be traded on the Nasdaq. It will have a 17.3 percent share of the market in Canada, the largest of any firm.
Aphria chairman and CEO Irwin Simon will lead the new group with the same title.
The company will produce cannabis-infused food and beverages in the United States, and medical marijuana in Portugal, with a distribution hub in Germany.
The combined revenue of Aphria and Tilray over the last 12 months was an industry-leading Can$874 million, though rival Canopy Growth has a higher overall stock market value.
The deal is expected to be finalized in the second quarter of 2021. Shares in both companies jumped after the announcement.
Canada was the second nation, after Uruguay in 2013, to legalize the recreational use of cannabis.