On Monday, the cannabis industry saw the creation of the world’s largest cannabis company in terms of sales as two Canadian giants. Tilray Inc. (NASDAQ: TLRY) and Aphria Inc. (NASDAQ: APHA) announced the completion of their merger.
Tilray and Aphria had been in negotiations since the fall of 2020, which ultimately led to the shareholders of both companies voting in favor of the merger.
Irwin Simon, CEO of the “new” Tilray and former Aphria CEO, called Tilray “the right partner”.
Shortly after the historic deal was announced, Simon was a guest on Benzinga’s Cannabis Insider Show, co-hosted by Spencer Israel and Javier Hasse.
“We had to consolidate there,” said Simon of the Canadian cannabis market.
And while there were “stops and starts” during the merger talks with Brendan Kennedy, the current director and former CEO of Tilray, they eventually sat down and came to a beneficial agreement for both companies’ shareholders, Simon told Cannabis Insider.
“I think there are times when individuals like to do something different” and “times when they want to take a step back,” commented Simon that Kennedy will be more passive after the merger.
Building the cannabis business as a CPG business
Simon also addressed cannabis as a rapidly evolving category, emphasizing that cannabis must be cannabis from a product standpoint.
“We are not marijuana, we are not weed,” he added.
Cannabis should revolve around a consumer goods business, he stressed, stressing that it is no different from other categories like food and beverages.
“We have to come out and brand this category” and build it around other brands related to adult use, medicinal use, food and beverage, he said.
Simon emphasized the importance of regulations and quality controls to build consumer confidence and keep them informed about their purchases.
Lastly, Simon said it was important to understand the benefits of cannabis products and find the best way to market them.
Tilray outside Canada
With the knowledge of doing and building business in Canada who, along with Uruguay, have nationally legalized recreational cannabis, the newly merged company will continue to serve the same role in the US and Europe.
To that end, the new cannabis-focused CPG company plans to leverage Tilray’s consumer goods presence, powered by SweetWater, a craft brewer under the Cannabis Lifestyle brand, and the CBF brand Manitoba Harvest, which has over 17,000 stores is available in North America.
Simon said they plan to find companies that “complement our existing businesses,” like other beverage and food companies that can offer THC and CBD products.
“I want to be able to sell to convenience stores and supermarkets” and “create product lines that are diversified”.
However, Simon admitted that he would “rather wait and see how best to jump in” once legalization is in place.
Compared to its US counterparts, Canadian LPs are subject to a different standard from an investor’s point of view, as they are traded on both the NASDAQ and the TSX. Simon noted that they have “stricter regulations”.
On the other hand, “we don’t have the population and we don’t have the depth and breadth that US markets have.”
In addition to expanding its international presence by leveraging the company’s medical cannabis brands, its distribution network in Germany, and its good manufacturing practices supply chain in the European Union, Simon sees “tremendous opportunities for both CBD and THC in China, India and the Middle East.” -Page” . “We’d probably go to the medical side first.”
Once the world has overcome the many setbacks caused by the current health crisis, Simon expects the business to flourish.
“There’s a lot of pent-up demand for the product,” he said, adding that new product launches will be easier once the stores open.
A firm believer in the merger of Tilray and Aphria, Simon used an agricultural phrase to underscore the value and promise he expects for the new company and its potential growth.
“When you are green you grow, when you are ripe you rot.”
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