00:00today on forbes why one-time cannabis darling tilray is now high on beer
00:08in july 2018 tilray the canadian-based cannabis company went public on the nasdaq becoming one
00:15of the first weed firms to list on a big u.s exchange on its first day of trading shares
00:21jumped 35 percent and tilray became the first beloved pot stock a few months later tilray
00:28hit 214 dollars per share valuing the startup which had 27.7 million dollars in revenue at the time
00:36at 17 billion dollars an all-time high but shares have been in a painful decline ever since after
00:44seven years of no meaningful movement at the federal level to legalize marijuana in america
00:49and brutal competition in canada's small cannabis market tilray's stock price has now dropped below
00:56one dollar recently trading at 49 cents last month the nasdaq sent the company a warning that
01:03it could be delisted erwin simon who became ceo of tilray in 2021 after the company merged with
01:11another canadian cannabis company afria which he was ceo of at the time is well aware that his
01:17company's stock price is in the toilet and he believes he has a plan to fix it simon who oversaw
01:24tilray's acquisition of more than a dozen craft beer and spirits brands over the last few years
01:29says he is quote not nervous about getting delisted because he expects shareholders to approve a
01:35reverse stock split in july which would bring the share price over a dollar again simon who founded
01:42haynes celestial group in 1993 an organic food company he took public and grew into a three billion dollar in
01:48annual sales business oversaw the merger of afria and tilray four years ago the deal which valued the
01:56combined company at nearly four billion dollars was structured as a reverse acquisition of tilray
02:02each afria shareholder received approximately 0.8 tilray shares worth six dollars 20 cents at the time
02:09for each afria share they owned despite its market woes tilray remains one of the biggest cannabis
02:16producers in the world growing about 170 metric tons of marijuana each year which is sold across 20
02:22countries from canada to europe to australia it cannot sell marijuana in the u.s due to federal law
02:30after acquiring eight craft beer companies from anheuser-busch and four from molson cores it is
02:35also now the fourth largest craft brewer in the u.s with regional brands that include new york's montauk
02:41brewing george's sweetwater and colorado's breckenridge brewery tilray also owns colorado-based blended
02:49bourbon whiskey maker breckenridge distillery overall revenues were 788 million dollars last year but
02:56tilray somehow managed to lose 222 million dollars albeit mostly due to non-cash expenses although the
03:04company is losing heaps of money it has 230 million dollars in cash and has trimmed its losses from a
03:10staggering 1.4 billion dollars in 2023 thanks to simon's string of acquisitions a strategy he says
03:18is due to his fear of being a quote one trick pony tilray is no longer just a cannabis company he
03:24cringes at the word weed and points to tilray's 80 million dollar in annual sales medical marijuana
03:30business tilray sells a total of 275 million dollars of cannabis when recreational sales are included
03:36he wants investors to believe that the brand which derives 60 percent of its revenue from
03:42selling cannabis and beer is really a diversified pharmaceutical and consumer packaged goods company
03:48with a focus on quote bringing people together for a good time last year 35 percent of tilray's revenue
03:55came from marijuana while 25 came from its alcohol division tilray also operates a pharmaceutical
04:02distribution business in europe which delivers its medical cannabis as well as other medications to
04:07pharmacies and is responsible for 33 percent of its revenue the company's wellness division features
04:13hemp-based food brands like manitoba harvest and brings in about seven percent of the company's revenue
04:19pivoting to alcohol has helped diversify tilray's revenue but ironically legal weed has been hurting
04:25beer sales in the u.s according to the brewers association craft beer production decreased four percent in 2024
04:33over the prior year the third consecutive decline as consumer preferences continue to change simon concedes
04:41cannabis does ultimately cannibalize alcohol sales if i get cannibalized on one end i want to be in the
04:47business that's cannibalizing for full coverage check out will jakowitz's piece on forbes.com
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