Tilray Grows its Cannabis Cultivation

Written by Jennifer Clark
Posted January 23, 2019

Cannabis continues to be one of the biggest market trends this year.

The investing and business opportunities that have surfaced in just a few years are astonishing, and the opportunities forming now and for the future will be huge. You would be at a major disadvantage if you didn’t at least learn more about this growing industry.

Let’s take a look at a Canadian pharmaceutical and cannabis company, Tilray (NASDAQ: TLRY). Tilray is incorporated in the United States, and its primary operations are headquartered in Nanaimo, British Columbia. The company was founded in 2013 by Brendan Kennedy, Michael Blue, and Christian Groh.

Tilray had its initial public offering (IPO) last year on June 19, 2018. The company is fairly new to the trading world, but it stepped into the market at an opportune time, when the IPO and cannabis markets were both booming.

Tilray’s IPO was a huge success. It saw a 315% return for 2018, and as of this month, it is being valued around $9 billion. Tilray’s IPO made founder Brendan Kennedy a billionaire, not to mention the richest man in the legal marijuana business.

Marijuana Keeps on Growing

Marijuana became fully legal in Canada on October 17, 2018. Marijuana is now legal for medical and recreational use in 36 countries and 33 U.S. states including the District of Columbia.

The use and sale of the drug is illegal on the federal level in the U.S.; however, a lot of people, including many on Wall Street, believe that will be changing very soon. We’ve already had a lot of changes in marijuana legislation in just a few years. People are finally understanding the benefits and de-stigmatizing the drug. 

marijuana plant

The recently passed Farm Bill has exempted the hemp plant and its derivative cannabidiol (CBD) from the federal ban. CBD product sales have skyrocketed.

CBD products are everywhere. My friends and family have been talking to me about CBD products they've been using and how great those products have been for them. These are people I would have never thought would have anything to do with marijuana.

Yes, there might be some hype around CBD products and marijuana, but that doesn't mean you should think any less of it. There's still medical research happening into the real benefits of the drug, but it doesn't mean those seeing benefits now are liars.

Take my father for an example. He's been a victim of back muscle spasms, but he recently started to use CBD, and now he can enjoy life without the painful back spasms that usually kept him in bed for a few days.

A report from Arcview Market Research and BDS Analytics is forecasting that legal pot sales will more than double from $10.5 billion in 2018 to $22.2 billion in the U.S. and $31.6 billion worldwide by 2022.

If you told me that projection 10 years ago, I probably wouldn’t have believed you. The marijuana industry has grown very quickly. We’re at the very beginning of a wealthy industry that’s only going to get wealthier. Companies like Tilray that have been involved with the industry since its infancy are already carving out a good chunk of market share for themselves and are planning to expand business efforts even further.

Tilray’s Groundbreaking Cannabis Ideas

Tilray recently made a $100 million deal with Anheuser-Busch InBev. You might be familiar with this company, as it’s the one behind the beer Budweiser. This partnership has a goal in mind to create a cannabis-infused substitute for beer. The product would be groundbreaking and something no one has seen before.

Tilray is also buying Canadian medical cannabis producer Natura Naturals for about $26 million in cash and stock. Natura Naturals is the parent company of a licensed cultivator of cannabis in Leamington, Ontario. A deal like this will double Tilray’s Canadian cultivations capacity.

Tilray’s president and CEO had this to say about the deal:

We’re very pleased to have an agreement in place that allows us to expand our capacity to supply high-quality branded cannabis products to the Canadian market.

Quite frankly, this was a no-brainer for Tilray. This deal and deals like the one it made with Anheuser-Busch are what will grow the company in the right direction. Tilray continues to think ahead and make partnerships and deals that will benefit it and the industry in the long run.

The marijuana industry is only getting bigger, and right now couldn’t be a better time to start investing.

Until next time,

Jennifer Clark
Pro Trader Today

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