Tilray CEO tempers expectations about pot
Biden’s signal U.S. will loosen policies ‘relatively modest’
Tilray Brands Inc.’s chief executive tempered expectations a day after U.S. President Joe Biden revealed he will pardon people convicted under federal law of possessing cannabis and review marijuana’s status as a Schedule 1 substance.
“It is important to recognize these initiatives for what they are: relatively modest, but any sign of progress is important at this time,” Irwin Simon, head of the Leamington, Ont., cannabis company, said on a Friday call with analysts.
Biden’s surprise Thursday announcement had Canada’s pot industry buzzing because it has long hoped the U.S. would move toward loosening cannabis regulations and legalizing the substance on a federal basis.
The drug is legal for medical purposes in about 39 states and for recreational use in19, including D.C. However, federal law still considers it a Schedule I controlled substance with high risk of abuse and no accepted medical use, placing it in a group with harder drugs like heroin, LSD and peyote.
Canadian and U.S. pot stocks rallied on the news, jumping between 20 and 30 per cent in many cases. Tilray’s share price surged almost 33 per cent to $5.37, while rival Canopy Growth Corp. gained 23 per cent to $5.16 Thursday.
Tilray’s share price dropped almost11per cent to $4.78 in morning trading Friday, while Canopy’s dropped about 13 per cent to $4.49.
Pot companies have been eyeing the U.S. for years and Tilray has made inroads into the market with its acquisitions of SweetWater Brewing Company and Breckenridge Distillery. The company has also bought enough of MedMen Enterprises Inc.’s convertible debt to turn into a minority stake upon U.S. legalization.
“From a U.S. standpoint, what we’re going to continuously do is look at acquisitions in the consumer area with adjacency to cannabis,” said Simon. “We have a good balance sheet, we have good brands, we have lots of knowledge within this industry, and being one of the biggest out there gives us opportunistic ways to go about it.”