Why Tilray is Positioned for Success in the Cannabis Industry – DD
At this point in time, the cannabis industry is still in its infancy. There are over 60 large cannabis companies competing for the largest market share, and the race to have the greatest presence is only beginning.
Tilray, which currently ranks 3rd in the list of the largest cannabis companies in the world, already has an incredible amount of leverage over the majority of its rivals. After the mega-merger with rival company Aphria, Tilray will overtake both Curaleaf and Canopy Growth in terms of revenue, making it the largest cannabis company in the world.
In an industry that has not even begun to reach its formal formation, infrastructure and revenue are by far the most important traits a company can have. Tilray, which will own dozens of diverse subsidiaries after its Aphria merger, has a global presence in over 18 countries:
Although a portion of these countries only allow hemp-related products and/or clinical trial exports, the infrastructure is still there. Tilray has a massive global presence, giving it a launchpad to build its brand name and form agreements across the world. Although companies like Curaleaf, Trulieve and Cronos Group already have market share in the U.S, Tilray’s strategy of aggressively expanding its operations on a global scale will prove to be the most successful method in dominating the industry. It allows for long-term growth, that can adapt to the endless demand for cannabis in the future of our society.
And that’s not to say Tilray doesn’t already have infrastructure in the United States. Currently, Tilray owns the goliath hemp-food company Manitoba Harvest, the world’s largest hemp food manufacturer which has products in over 16,000 retail stores globally. In addition, Tilray will own SweetWater Brewing Company, a popular brewing company headquartered in Atlanta, Georgia, after the Aphria merger this quarter. Not only do both companies offer a steady stream of revenue, but they provide an opportunity for U.S exposure once federal legalization occurs. In addition, Tilray’s diverse brand segmentation will allow them to generate revenue from a broad range of sources.
In the coming years, attitudes towards marijuana will drastically change. It’s been almost a decade since Colorado and Washington legalized cannabis in 2012, and since then 16 states have followed. If expectations are met, the federal prohibition on marijuana could end as early as this year. With government support and an overwhelming increase in positive views towards legalization, it’s only a matter of time until cannabis will become a destigmatized substance integrated into adult society.
The legal marijuana industry is only beginning. Worldwide legalization and embracement will take years or decades to reach, but when it does, cannabis will be a universally accepted substance with an endless demand. After the Tilray/Aphria merger this quarter, it will become clear which company has the greatest chance of capitalizing off this rapidly expanding industry.
Long on TLRY and APHA.
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April 26, 2021 at 04:52PM