Tilray Inc.'s shares soared Friday after the company received a bullish upgrade from a prominent cannabis analyst, highlighting the company's growth potential in the Canadian and European markets.

Jefferies LLC analyst Owen Bennett upgraded his position on Tilray after it closed its merger with Aphria Inc. on Monday, rewarding it with a double-upgrade to "buy", a $23 price target on the company's stock and making it his "top pick" in the cannabis sector.

Bennett highlighted Tilray's strong sales and profit profile compared to peers such as Canopy Growth and Cronos, a better opportunity to capture sales in Europe's burgeoning cannabis market and "compelling optionality" for the U.S. pot space once that country legalizes marijuana.

Bennett also sees Tilray's revenue tripling to US$601.5 million this fiscal year, expanding to as much as US$2.67 billion by 2029. The combined company ended last year with US$727.1 million in sales.

"When Aphria and Tilray combined, it was the perfect match," Bennett said.

He noted that Tilray sets itself apart from other cannabis companies by keeping legal marijuana as a key focus but also diversifying its exposure to a wider base of consumer products, including nutritional hemp food, craft beers and CBD.

"In Canada, a leading portfolio of brands, supported by a now even more efficient cost structure. In Europe, the market is now picking up, while Tilray's scale and Aphria's unique German positioning make it perfectly suited to succeed. And in the US, the combined company's broader consumer goods portfolio and strong balance sheet supports excellent optionality around both US THC and CBD."

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