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Diving overview:
- Irwin D. Simon, Tilray’s CEO and chairman, told investors the company is optimistic that the U.S. presidential election will “more likely” lead to changes in how cannabis is regulated, as both major political party candidates have expressed support for reclassifying the drug. He said he was doing it.
- The company will launch four hemp-derived THC beverages in major U.S. markets this month through its new Tilray Alternative Beverages division.
- Cannabis beverage producers are optimistic about the prospect of America’s political tide turning in their favor after the election.
Dive Insights:
For the first time in the United States, both major party candidates have expressed openness to legalizing pot products.
Appearing on the sports podcast ‘All The Smoke’ last month, Vice President Kamala Harris said cannabis should be legalized. Last year, the Biden administration expressed interest in reclassifying cannabis as Schedule III, the same classification as drugs like ketamine.
Former President Donald Trump said in a statement posted on his Truth Social platform last month that he supports a Florida amendment that would legalize recreational marijuana for adults over 21. The main opponent is the state’s governor, Ron DeSantis.
Tilray pointed to a 13% year-over-year increase in net revenue in the most recent quarter as a sign that the company is growing. TD Cowen analyst Robert Moskow said in a note that the company’s financial performance was less rosy than expected as sales from its Canadian cannabis business declined over the summer.
But Tilray is making progress in increasing distribution of its recently acquired beer brands, according to Moskow. Last year, the brand acquired eight beer brands, including Shock Top, from Anheuser-Busch, and in August it purchased four other craft beers from Molson Coors.
On Thursday’s earnings call, Simon said Tilray managed its finances better than other cannabis companies, paying down more than $300 million in debt last quarter. When asked by an investor if the company would be interested in partnering with a distributor to help expand its products in the U.S., the CEO left both options on the table.
“We are prepared to do this on our own in the United States, following guidelines and parameters,” Simon said. “Whereas, if you look at our current balance sheet, we have the ability to have great strategic partners who can help us.”
Tilray’s recently launched beverage contains five ingredients. milligram Hemp Delta 9 THC is easier to sell in states where the drug is still illegal. These include 420 Fizz and Fizzy Jane’s sparkling water in flavors like Lemon Lime and Blood Orange. Herb & Bloom and Happy Flower mocktails in varieties like Margarita and Peach Bellini. The drink will compete with today’s low-dose beverages and other RTD cannabis-infused beverages, including Jones Soda’s Mary Jones.
