After Aphria Deal, the New Tilray Eyes Global Cannabis Brands
(Bloomberg) -- Tilray Inc. shareholders approved the merger with Aphria Inc., creating a cannabis powerhouse that’s both the largest medical marijuana company in Europe and a major player in Canada’s recreational market.
The company’s ambitions don’t end there, though.
Irwin Simon, the former head of Aphria who is now chairman and chief executive officer of the combined company, has ambitions to transform it from an edgy Canadian marijuana company into a global consumer products giant, potentially selling cannabis in everything from drinks to skin creams to snack bars.
The company, which completed the deal on Monday, will have a market value in excess of $8 billion, making it a giant in the fast-growing cannabis industry. While Aphria shareholders acquired 62% of Tilray shares under the original terms, the company is keeping the Tilray name and will trade under the ticker TLRY.
Simon, the founder and former CEO of tea and packaged-food company Hain Celestial, has the background to lead Tilray’s charge deeper into the consumer world. Bloomberg spoke with him about his plans to compete in the growing arena of big consumer-oriented cannabis brands.
You already have diverse assets — a marijuana cultivation facility in Portugal, the Sweetwater Brewing beer brand in Atlanta, the Manitoba Harvest hemp food company in Canada and CC Pharma, the pharmaceutical distributor based in Germany. What comes next?
It’s a three-part strategy. In Canada, where we already have a 17% to 18% market share, my objective is to get to a 30% share of the overall adult use market, and that’s going to be by selling adult use, medical products and cannabis 2.0 products, which are drinks and edibles. That will involve coming out with new products and expanding our brands. Secondly, in Europe, which is known for medical cannabis today, we already have a distribution system in place today to sell more medical cannabis at 13,000 active pharmacies, sourcing it from our Portuguese facility and selling it throughout Europe.
What about the U.S.? I imagine that’s the third part of that strategy.
We will have consumer products standing ready for recreational use in the U.S. once legalization occurs. We’ll look to do an acquisition in consumer packaged goods world that will help us parlay into recreational cannabis. We may also do something in the medical world in the U.S., for example, a topical cream.
Like Bengay, but with CBD?
You got it. Products like that, or other topicals or skin care. We think there are some big areas with CBD and CPG, like drinks. Also today, Manitoba Harvest is in food, with granola-type products and snack bars. Today we already do hemp oils. And plant-based milks that are a derivative of hemp. And I do like the tea business.
That makes sense, given your history in that market. What about something a bit stronger than tea?
The only thing I wouldn’t mix cannabis with is alcohol or tobacco. There are already hemp chips and CBD bars out there. The sky’s the limit — but what’s the purpose, how does the product taste, and what does it do for you?
Do you still need to see regulatory changes from the FDA to go into this consumer-goods space, which involves so many things like food and topicals that that agency oversees?
Yes. I’m going to get out there and lobby for change. With federal legalization over the next three to four years, $150 billion in tax revenue could be contributed to the U.S. economy. Instead of raising our taxes, we should be looking at legalization. I think cannabis should be regulated similarly to alcohol on the recreational side, and with regards to the medical side, it should be a pharmaceutical product, with prescriptions from your doctor.
How fast is the regulatory pace in Europe moving in comparison? Several countries have started pilot programs for recreational cannabis recently.
I think there are markets that will legalize adult recreational use before the U.S. does — Germany, and I think Portugal and the Netherlands. We’re already expanding our medical cannabis into Spain, the U.K., France and are planning expansions into Israel and Poland. The combined company has already distributed cannabis to 20 countries worldwide and is positioned for further expansion across Europe.
Other consumer goods companies seem to have similar ambitions. Marlboro-maker Altria Group Inc., British American Tobacco, Molson Coors and Anheuser-Busch have all taken interests in cannabis companies. How do you see yourself competing against them?
There are actually big opportunities for partnerships. I think companies like that will want to partner with someone like us, with great quality assurance, and great understanding of branding and products. Tilray would be doing the growing, and using our expertise around different strains and different types of products. I don’t want to be just a grower. I want to be a builder of brands.
Editor’s note: This interview has been edited and condensed.
©2021 Bloomberg L.P.