Tilray’s budding interest in beverages is driving growth for the company.
The company saw 26% net revenue growth in the last year, with its cannabis revenue increasing by 24%, Tilray said in its earnings report. Its net sales are projected to be worth between $950 million to $1 billion this year alone.
In Tilray’s earnings call last week, CEO Irwin Simon said the company’s efforts in beverages are transforming the company into a broader business with a wider reach into new categories.
“So over the last 5 years, we have built something that’s pretty exciting, a lifestyle company that’s focused on cannabis, which is cannibalizing alcohol, of course,” Simon said.
Last August, Tilray acquired 8 beer brands from alcohol giant Anheuser-Busch. The company is now the fifth-largest craft brewer in the U.S. with a 4.5% market share. And in June, Tilray launched a nonalcoholic beer brand Runner’s High, promoting it as a better-for-you alternative.
Simon said the company is focused on growing its portfolio of craft beer and nonalcoholic brands, with hopes to capitalize on the lucrative cannabis beverage segment when they are legally able. But in the meantime, it is looking for revenue flows in other areas.
“As we look at other categories and what we should expand into, as we go through our strategic plans, we’ve identified what is that lifestyle, what is that lifestyle opportunity for us to bring within the Tilray brands,” Simon said.
Part of its approach includes the launch of hemp delta 9-derived beverages, which are not derived from the cannabis plant but still contain THC. Simon said the formulations of these drinks are “complete” and ready to sell once it plans out which markets would be best to launch them in. The company could begin selling the drinks in Texas and New Jersey, he said.
In an interview with Yahoo! Finance last week, Simon noted cannabis is currently legal for recreational use in 27 states, and that Gen Z and millennials consume it more than alcohol. But the CEO said he’s not holding his breath with regards to a set time when the drug could be rescheduled federally.
“I’m not sure but I guess I’m not optimistic either,” he told the outlet. “Something’s got to happen.”
Xochitl Hinojosa, director of public affairs at the Department of Justice, told Food Dive in May the department is interested in changing how the law handles the drug. It seeks to reclassify marijuana from a Schedule I, which heroin holds, to a Schedule III controlled substance, which Tylenol holds. The department did not indicate when this would occur.
