EXCLUSIVE: Tilray CEO Discusses Key Markets, Strategy, News And Stock Catalysts

Tilray, Inc. TLRY reported its financial results on Monday for the second fiscal quarter ended Nov. 30, 2021, with net revenue of $155 million - up by around 20% year-over-year and down from $168 million in the first fiscal quarter. Net income increased to $6 million from a net loss of $89 million in the previous year quarter.

The Canadian marijuana giant also announced a new parent name, Tilray Brands, Inc., reflecting the company’s evolution from a Canadian LP to a global consumer packaged goods company with a portfolio of cannabis and lifestyle CPG brands.

Following the earnings release, Tilray's CEO Irwin Simon was a guest on Benzinga's Cannabis Insider Show hosted by Patrick Lane and Javier Hasse. In the Tuesday interview, Simon discussed Tilray’s business strategy, plans for the U.S. and Europe, beverage and alcohol operations, medical marijuana activities and more. 

Legal Cannabis Enables Taxes, Jobs And Infrastructure 

In the beginning, Simon summarized the biggest moves Tilray made in 2021, such as its merger with Aphria, which created a company with a combined market cap of $3.3 billion, the purchase of SweetWater Brewing Company and the company’s acquisition of Breckenridge Distillery.

“It’s incredible the amount of tax dollars that have been generated from cannabis,” said Simon. He stressed that the number of jobs created by the cannabis industry and the infrastructure it developed were even important than the tax dollars generated.

“We are one of the largest employers today in Leamington, Ontario and basically one of the biggest providers, whether it’s a food service and in other areas of growth within the town,” Simon said of the economic benefits legalized cannabis is having on a local level as well.

Despite the fact that over 90% of Americans support cannabis legalization and more than 35 states already have some form of legalization, Simon is not convinced that he'll see federal legalization anytime soon. “You can’t depend upon regulators, you can’t depend on politicians for your future.”

Tilray’s U.S. Strategy - Spirits And Beer 

As for the company’s strategy in the U.S., Simon explained that as a public company that trades on NASDAQ and Toronto Stock Exchange, Tilray “can’t touch cannabis in the U.S.,” so to build a consumer product business the company is building around spirits and beer.

“One day I hope to be holding a bourbon that’s infused with THC instead of alcohol,” he said.

Tilray plans to build its business in the U.S. around its Manitoba Harvest hemp operations now that hemp is legal within the food industry. Simon disclosed Tilray's plans to infuse food and drinks with hemp and CBD, as an important part of its long-term strategy in the United States.

In terms of Europe, Tilray has already established a strong base in the EU — having established a distribution business in medical products that sells to 13 000 drugstores as well as two grow facilities that sell products to 20 different countries.

“In Europe medical cannabis and combined, I think that’s probably, you know, about 150 million people - five times the size of Canada, almost half the population of the United States,” Simon noted.

Explaining the recent termination of the partnership between Tilray and the world’s leading brewer, AB InBev BUD, Simon told Benzinga that it was not “the right deal” for either of the companies. With Tilray  having alcohol distributors and the capability to make products with THC or CBD, it just “didn’t make sense with the partnership to move forward.” 

Though he added, “I am big into strategic partnerships that make sense.” He further highlighted the importance of creating value for shareholders and putting products out there for consumers. “I am open to personal care products, I’m open to food products, I’m open to drug companies.”

‘I Don’t Want To Be Elon Musk’ 

When asked what he thought about a comment made by one of the show’s listeners “Tilray is going to be the Tesla TSLA of weed stocks,” Simons replied: “I don’t want to be Elon Musk.”

But rather, “I want to redefine P&Gs PG of the world, the Nestlés NESN of the world. Jeff Bezos said if Amazon AMZN doesn’t change, it will go out of business one day. And that’s the thing I look at with Tilray — how are we evolving and changing every day?”

Simon continued, “I’m not sure I want to be Tesla, I’m not sure I want to be General Motors GM, I’m not sure I want to be Unilever ULVR...I want to be a bunch of things that do a lot of things right.” 

Tilray’s CEO concluded that the company will probably make mistakes and “screw up” but will make sure to learn from them and fix them. 

Take a look at the full interview on Benzinga's Cannabis Insider Show in the video below:

Photo: Courtesy of Esteban Lopez on Unsplash

Original publication: January 12, 2022