Tilray sees potential to market pot for wellness

Company to partner with U.S. firm to sell cannabis products

Licensed producer Tilray Inc. has teamed up with the U.S. company behind brands such as Juicy Couture, Aeropostale and Nine West to develop and sell co-branded consumer cannabis products globally, with items expected to hit U.S. and Canadian shelves within the next year.

The Nanaimo, B.C.-based company announced Tuesday the long-term revenue sharing agreement with Authentic Brands Group, to whom Tilray will initially pay $100 million (U.S.) in cash and stock, or up to $250 million depending on certain milestones.

Tilray will receive up to 49 per cent of the net revenue from these products bearing names from ABG’s portfolio of more than 50 brands, with a guaranteed minimum payment of up to $10 million

(U.S.) annually for 10 years.

“We believe that consumers will be much more likely to try a cannabis or CBD product if it’s branded with a brand that they already know and trust,” said Tilray’s chief executive Brendan Kennedy.

Under the deal, Tilray would be the preferred supplier of active cannabinoid ingredients, such as CBD and THC, for ABG’s cannabis products.

“We see extraordinary potential for cannabis in the fastgrowing health and wellness category — particularly for CBD products in the United States and around the world — and are excited about this longterm partnership,” said ABG’s executive vice chair Daniel Dienst in a statement.

It’s the latest pairing of retail and cannabis, as companies of all stripes look to cash in on the potentially high demand for recreational pot and cannabinoid-infused products.

The venture capital arm of licensed producer Canopy Growth Corp. on Monday announced an investment in Greenhouse Juice Company. The funding from Canopy Rivers Inc. will help fuel Greenhouse’s national expansion and initiatives for the development of natural health and wellness beverage infused with CBD. As well, Green Growth Brands, which has a portfolio of cannabis-focused brands, announced last week an agreement to sell hemp-derived CBD personal care products at select DSW retail stores throughout the U.S. DSW’s primary brand is Designer Shoe Warehouse but it is also a co-investor in Town Shoes of Canada.

Licensed marijuana producer WeedMD Inc. and fast casual restaurant chain Pita Pit also last week announced the launch of Pioneer Cannabis Corp., a services provider aimed at helping those who want to open their own cannabis retail store. While the two companies have not finalized which brands will be utilized, potential products include Nine West CBD foot cream or CBD-infused muscle wraps under the tennis brand Prince, with a logo that says “powered by Tilray.”

Kennedy expects these cobranded products to be on the market within 12 months on both sides of the border, as allowed under U.S. and Canadian regulations.

“Imagine a CBD foot cream sample that was in every box of the one million pairs of shoes that they sell every year ... and that introduces that consumer to this particular product,” Kennedy said.