For many of us, a new year marks a time for reflection on the year behind us and for planning for a better year ahead. There is usually much to celebrate, maybe a bit to learn from, and even more to look forward to.

Consider that just a year ago as we turned the corner into 2021, the U.S. cannabis industry was celebrating new adult-use markets legalized in the November 2020 elections: Arizona, Montana, New Jersey, and South Dakota; as well as voter-approved medical markets: Mississippi and South Dakota. This past year also saw Connecticut, New Mexico, New York, and Virginia legalize adult-use cannabis through their legislatures.

But South Dakota’s celebration of adult-use legalization took a negative turn in late 2021, when the South Dakota Supreme Court “issued a final decision Nov. 24, 2021, that upheld Circuit Judge Christina Klinger’s February ruling that voter-approved Amendment A violated the state’s single-subject rule in Article XXIII of the South Dakota Constitution and therefore was an unconstitutional ballot initiative,” Cannabis Business Times reported. And the Mississippi Supreme Court also reversed the state’s voter-approved issue for medical cannabis.

Excluding the disappointing Supreme Court rulings in South Dakota and Mississippi, the late 2020 victories and 2021’s progress brought the U.S. to a total of 18 states that have legalized/regulated adult-use cannabis, and 36 states in the U.S., the District of Columbia, Guam, Puerto Rico and U.S. Virgin Islands that have legalized/regulated medical cannabis (excluding low-THC/limited programs).

In this issue, we look at which U.S. states are “likely” to legalize adult-use in 2022, those that will “maybe” legalize, and those “to watch,” including South Dakota, as it makes another attempt.

We also celebrate efforts to provide opportunity to those people and communities most impacted by cannabis prohibition—an impact that, while declining, knows no end until we see all states legalize adult-use, or federal decriminalization or legalization. This issue’s cover story on Al Harrington and Viola Brands serves as a hope-for-the-new-year tale of the positive change the state-legal cannabis industry can and will have on people who have suffered as a result of the war on drugs.

Over the past year, social equity and righting the wrongs of prohibition have clearly become a priority for states in addition to private businesses—for example, New York’s $100 million in social equity funding; Virginia’s passage of an adult-use legalization bill that “focuses on health equity, economic equity and equity in criminal justice,” per a statement by Alaysia Black Hackett, the governor’s lead deputy chief diversity officer; and Illinois’ awarding of 55 retail licenses in the first of three licensing lotteries aimed at improving social equity in the state’s adult-use market, among others.

As we look to the new year, we can only expect state cannabis legalization continue to spread along with efforts to create opportunities for all to continue. That is something I surely am looking forward to as we ring in the New Year.

Whether 2021 ended with missed milestones or accomplished goals, 2022 can represent a blank slate for your cannabis business. Starting off the year on the right foot can help you achieve your next set of annual goals.

Planning, preparation, and execution are critical when setting yourself up for success in any growing environment, and taking the time to think through each step will ensure that you do not miss any targets throughout the year.

Indoor, greenhouse, and outdoor grows all require different sets of skills, and each can quickly become overwhelming in their own way. With the new year afoot, now is a great time to evaluate your processes and try to improve upon last year as much as possible.

1. Plan for Expansion

The first thing you may want to do around the new year is plan out any expansions that are going to take place. If you intend to increase your plant count, verify whether your current equipment can handle the additional canopy, and plan to staff up during the expansion. Also meet with your procurement personnel and make sure you have enough pots, soil, nutrients, and other growing supplies that may be needed to handle the new plants.

If you want to build out an extra wing or add an extraction lab, make sure you plan around any obstacles that could come up during the process. Do you need to plan an alternative route for harvest? Is your office going to be relocated? Always make sure to be proactive to help avoid any confusion, contamination, or injury.

Finally, look at your processes. Do you need to increase the number of clones you cut? How many more transplants per day do you need to plan for? Make sure your team is all on the same page when it comes to these increases so no one skips a beat.

2. Schedule Maintenance

Ensuring your machines will work when you need them can make the difference between a great day and a disaster that sets your production back by weeks. This is especially true in outdoor grows, where the difference between a machine and human labor doing a task could be the difference between being profitable or not.

When you purchase equipment, maintenance should always be a regular occurrence. Be sure to regularly check in with the person in charge of making sure that the maintenance is done on time. Also, make sure to plan out yearly maintenance on the building or furnace when it is most appropriate for the equipment, such as tuning up the furnace before winter or servicing the HVAC before the summer heat.

The final thing you want to do during maintenance inspections is walk through your facility and assess any other smaller parts like light bulbs or fans that may need to be replaced. Are you using old extension cords that could be updated? Making one last trip through the facility can help you make sure every little thing will work appropriately when it’s needed.

3. Procure Savings

A good practice at the beginning of the year is to collect all the data on inputs and consumables you used in your facility last year (e.g., nutrients, media, state tracking tags, etc.). Do any glaring expenses stick out, like a rushed delivery charge for soil or packaging supplies, that could be prevented by planning? Research to see if there is any way you can buy in bulk and store large amounts of certain items.

If storage is not an option, or if you have a good relationship with your vendor, work with them to get a discounted price for promising to buy certain amounts throughout the year. Any savings on the items you order will immediately impact your bottom line in a positive way.

4. Prepare for Trade Shows

At the beginning of each year, the schedules come out for trade shows that are planned around the country to exhibit anything and everything to do with cannabis. While visiting every single one would be costly, going to one or two can have many benefits. From networking to discovering new machinery or technology, trade shows have a lot to offer—but plan to make the most out of your trip if you’re going to make the investment.

Smaller trade shows are usually more intimate and you can have more conversations, but these generally have fewer vendors with which to interface. Meanwhile, larger shows have more vendors, but it may also be harder to get one-on-one time with anyone at the show. (That said, you can always get people’s information and email them later.)

Having a range of trade shows to attend will help you get a pulse on the industry—and you never know what you may learn or come across that may change one of your processes completely.

5. Test Your Water

Testing your water once or twice a year is highly recommended to make sure your pH did not fluctuate, your alkalinity did not spike, and/or that no foreign contaminates infiltrated your water system. If you have never tested your water before, contact your nutrient provider and see if they can do it for you—some of them even offer tests for free. If that’s not possible, research nearby water testing facilities. Even in remote areas, there is sure to be one accessible to you by mail, if nothing else.

If your water source changes often, or if you have a shallow well, then testing more often may be necessary to manage those constant changes.

6. Review Your SOPs

Part of being good at regulatory compliance is going through and regularly updating your standard operating procedures (SOPs). By scanning through these important documents, you can not only detect any new process changes that the SOP does not reflect, but you also may come up with an easier way to complete a process. Sometimes, by reading through the process, or having another person who did not write the SOP read it, you can glean a new perspective on how it works and see a shortcut.

Even if no changes are made, at least you can go into the new year confident that all your processes are documented accurately.

7. Set Achievable Goals

Often in this industry, management demands a great deal from their leadership and staff. One way to make sure everyone is held accountable but also feels appreciated is to set achievable goals. Maybe it’s a 5% increase in yield for the month compared to last year, or just sticking to the harvest schedule for six weeks straight. Whatever it is, try to make it so your team can see the light at the end of the tunnel.

If they do reach their target, try to reward them in some way. Little acts of kindness always go a long way, and sometimes your team can really use a pat on the back. Offering incentives like bonuses or raises for meeting goals can be a great way to motivate employees on an individual level, as well.

Setting goals that are achievable but challenging can bring out the best in your employees, and helping them achieve those goals will mean something to them personally.

8. Coordinate Training

Training is something every team needs to go through on a regular basis. Whether it’s brushing up on a Department of Agriculture safety video or watching a webinar about your state tracking system, it can be beneficial to help you stay compliant.

Always aim to get any training done as early in the year as possible to make sure that you are not only compliant with state regulations, but also that you are not missing any new features on tracking systems and other tools that you use.

Often, training videos will show you how the newest regulations are being tracked. They can also act as a refresher for managers who have not used the software in a while and who might need to in case of emergency.

9. Stay Current on New Regulations

As an owner or manager, you should always be up-to-date on all regulations and restrictions pertaining to your business. In the cannabis industry, it seems that every month there is a new law or guideline that comes out, requiring changes to the way you do something.

Before each new year, your state might release a redlined version of the current regulations. If nothing else, you should at least read the redlined changes for the year (or review regulation updates or bulletins posted on the agency’s website). This can save your business from being shut down for doing something that was compliant last year but is no longer compliant. Once upper management has a grasp on the new regulations, make sure the corresponding SOPs are updated and any affected personnel are notified.

10. Update Emergency/COVID Procedures

The final thing you may want to review at the start of the year is your emergency procedures to see if anything needs to be changed or updated. Maybe your fire meeting spot is in a building under renovation or a fire exit was moved. Make sure any updates are documented and that your team is aware of them.

With COVID-19 now a part of our daily lives, be sure you are up to date on all current regulations and restrictions in your state, county, and city. It may also be a good idea to get in touch with your local health department to find out their recommended procedures for handling positive cases. Have a plan for a worst-case scenario where you may have team members from another facility keep the plants alive while sick staff focus on getting healthy.

The new year is an opportunity to expand on everything you did the year before. Laying the proper groundwork today will make it all come together that much easier. Always do your best to get ahead of any major decisions and plan plenty ahead for any staffing needs. The cannabis industry moves quickly—you have to move quicker.

Gevin Gros is a partner at Mary n’ Jane, a vertically integrated multi-state operator with licenses in Colorado and New Mexico.

Once clones, seedlings and/or tissue cultures graduate from the propagation room, they can be moved into vegetation areas.

During the vegetation stage, the plant is focused on cellular division for vegetative growth. In other words, it’s creating more leaves and more branches.

Indoor and greenhouse growers have a lot more control over the grow environment and processes during this stage. It can take time to dial in settings—data collection and analysis is your friend in this regard—but once ideal conditions and protocols are established, this stage can run like a well-oiled machine.

Follow these tips to ensure your crops thrive in their second growth stage.

1. Grow more vegetative plants than you will need in flowering.

As in the propagation stage, it’s wise to have more plants available in vegetation than you want to bring to stage three (flowering). Having more plants in vegetation than is needed enables growers to choose only the best plants available to flower. Vigorous growth and dense canopies typically are signs of a winning plant that is likely to continue that growth pattern into flowering, so focus on culling the laggards.

2. Eliminate unnecessary lower vegetative material.

Lower branches and fan leaves need to be removed. In fact, this “clean up” step is typically performed multiple times in stage two once the plants are 24 inches or taller. This step should be performed every two weeks if the plant is vigorously growing, and less frequently if not. How much foliage you remove will be cultivar specific, as each variety has its own growth rate; but, in general, you can safely remove the bottom three leaf sets/branches.

By removing lower material that does not receive adequate light exposure (thus producing spindly growth), you ensure proper air flow between plants. This helps prevent potential hot spots or stagnant air, which sometimes can facilitate mildew growth. Additionally, by removing unproductive vegetative material, the plants can allocate resources (e.g., nutrients, water) to remaining branches and floral structures.

Stop removing vegetation from the plants after two weeks into flowering (stage three), as removing anything after that could cause unnecessary stress to your crop.

3. Monitor pH and ppm of all water inputs and runoff.

Water for plants grown in any kind of media (except tissue cultures during propagation) should be monitored for both nutrient levels (measured in parts per million (ppm)) and pH both before and after it has passed through the growing media. This should be done starting in the propagation stage but is absolutely necessary in vegetation.

Monitoring water inputs can reveal issues like nutrient imbalances (potentially caused by a faulty mixing system). Observing runoff can uncover potential problems such as nutrient lockout, causing a deficiency of one form or another leading to stunting, reduced yields and, in worst cases, crop failure.

I prefer to log all water and nutrients given to a plant, as well as the runoff to see if pH or ppm levels shift significantly. If all goes well, your runoff solution will have pH and ppm levels similar to the levels that went into the media. Any large deviations are signs of a nutrient imbalance or lockout.

4. Look out for pests common to your region and growing environment.

Oftentimes, pest and disease problems are born in vegetation rooms. Full on outbreaks might not happen until weeks later, which makes scouting during this stage more difficult—if you catch something early, you can drastically improve the odds of mitigation before your crop is affected.

What problems you might encounter greatly depends on your location and growing environment. For example, in a properly designed indoor facility or greenhouse, there rarely is a threat from budworm caterpillars, yet they can be an especially big problem for outdoor farms in northern California. The best method to prevent budworm is to apply bacillus thuringiensis (BT) to the plants while they are still in stage two of development (this can be done up until week two of flowering). BT will minimize the probability of a moth laying eggs on the plant and reduce the survival rate of any larvae that eclose.

Growers in all environments can leverage sticky indicator cards to monitor pest populations. It’s important to remember the goal is not to always have clean sticky cards, but rather to have a consistent minimal impact on your crop. If sticky cards suddenly are swarmed, it could be time to invest in more pest control measures before reaching the worst-case scenario: being forced to destroy your crop.

5. Refine your fertilizer management knowledge.

Doing so will allow you to rapidly detect symptoms of both over- and under-fertilization.

Also, educate yourself regarding the differences between ammonium nitrate and nitrate nitrogen, because while both are utilized predominantly in stage two, nitrate nitrogen is also utilized in stage three in small amounts, but not so much for ammonium nitrate. In a May 2016 Cannabis Business Times article, Kerrie and Kurt Badertscher noted that “ammoniacal nitrogen drops pH three times faster than nitrate nitrogen raises it,” so growers using ammonium nitrate must pay closer attention to their media or solution pH.

CBT’s “Cultivation Matters” series from researchers at North Carolina State University can be a good resource on the latest research, as can the publication’s “State of the Cannabis Nutrient Market” report, published in the December 2021 issue.

6. Be mindful of your container size.

I once walked past a huge dumpster full of root balls from plants—literally thousands of them, with what seemed to be an inordinate amount of soil relative to the root development. I asked the owner how much they spent per month on soil (this was an indoor facility). “$18,000 per month,” they replied. I was taken aback by the environmental disaster in front of me—because state regulations had specific dumping protocols, this company was forced take some of the most valuable soil on Earth, use it once, and then dump it.

When I continued my inspection, I confirmed that the containers were much too large for the size of the plants they were growing. This company could have investigated using smaller containers so that the media was completely utilized without excess soil, which would both save labor (for filling and moving larger pots) and resources.

Monitor plant development over time, and analyze root balls to determine if your containers and media are properly sized. Collected data might reveal cultivar-specific details that can allow you to reduce costs as well as increase sustainability and profitability.

7. Ensure your lights are set for vegetative growth.

Lighting requirements are different for all three growth stages of a cannabis plant. That said, many lighting manufacturers today make specialized lighting for each stage of plant development.

The preferred light spectrum for vegetative plants (stage two) is different than the requirements of stage three (flowering); whether you are utilizing HID or LEDs, you should match the light spectrum to the growth stage. Some cultivars have different spectrum preferences, and some LED fixtures are able to adjust varying spectra.

Like trimming, light intensity requirements also will be cultivar specific. That said, during stage two, you can dial the light intensity beyond the 1,500 lumen per square foot limit recommended for the propagation stage—just keep a close eye on your crop to ensure the plants don’t get stress from excessive radiant heat (causing burn) or from the light intensity (causing bleaching).

Follow these tips to increase your odds of a successful vegetation stage, and increase your chances of a great flowering period.

Kenneth Morrow is an author, consultant and owner of Trichome Technologies. Facebook: TrichomeTechnologies Instagram: Trichome Technologies k.trichometechnologies@gmail.com

On May 3, 2021, the merger between Tilray Inc. and Aphria Inc. marked a new era of growth by creating the largest cannabis company in the world in terms of revenue and geographic reach. Now, Tilray is well-positioned to compete in the international cannabis market as it continues to enhance its product portfolio through ongoing mergers and acquisitions—building off its acquisitions of U.S.-based craft brewer SweetWater (part of the Aphria merger), and Canada-based hemp food and wellness brand Manitoba Harvest in 2019.

But the driving force behind Tilray’s rapid global expansion isn’t just growth for the sake of increasing revenue, company executives tell Cannabis Business Times. Although profits are critical to ensure value for Tilray shareholders (the company trades on both the Toronto Stock Exchange and the NASDAQ Global Select Market under the ticker “TLRY”), the company is driven by its commitment to improve cannabis access in every corner of the world, providing beneficial products to as many people as possible.

“Tilray is poised to strike and transform the industry with our highly scalable operational footprint, a curated portfolio of diverse medical and adult-use cannabis brands and products, a multi-continent distribution network, and a robust capital structure to fund our global expansion strategy and deliver sustained profitability and long-term value for our stakeholders,” Tilray’s Chairman and CEO, Irwin D. Simon, commented in the corporate press release announcing the Aphria transaction.

Since completing the blockbuster merger, Tilray has integrated its sales and marketing operations, cultivation and production facilities, procurement, packaging, and supporting back-office functions with Ontario-based Aphria, which Irwin led until transitioning to his current leadership position with Tilray.

“We’ve achieved close to $55 million in cost savings by putting the companies together,” Irwin says. “[By] putting Tilray’s growth into the Aphria facilities, we’ll have good margins and operational efficiencies as we focus on building out more [innovative products].”

Now, the company is focusing on strengthening its market share in Canada and ramping up its U.S. infrastructure, while pursuing international growth opportunities abroad.

History in the Making

A pioneer in cannabis research, cultivation, and distribution, “Tilray has been a company of many firsts,” explains Denise Faltischek, head of international and chief strategy officer at Tilray.

Tilray became one of Canada’s first licensed producers (LPs) in 2014. By the end of that year, Tilray secured the first institutional investment in the cannabis industry from Founders Fund, a San Francisco-based venture capital (VC) fund. In 2016, Tilray became the first cannabis company to conduct a clinical trial approved by Health Canada to evaluate the therapeutic potential of medical cannabis. In January 2017, it became one of the first companies in Canada to operate a Good Manufacturing Practice (GMP)-certified facility producing pharmaceutical-grade medical cannabis.

More investors followed Tilray’s initial VC investment, and by October 2018, Tilray had raised $1.1 billion. Another monumental first occurred in July 2018, when Tilray became the first cannabis company to complete an Initial Public Offering (IPO) on an American stock exchange, opening on the NASDAQ at $20 per share. By September 2018, shares rocketed to $300.

When the Parliament of Canada legalized adult-use cannabis on October 17, 2018, Tilray was positioned for the pivot. In preparation, Tilray launched its adult-use subsidiary, High Park, in April 2018, which operates a cultivation and processing facility as well as a manufacturing and R&D space (which launched in late 2019) focused on “Cannabis 2.0” products like vapes, edibles, and beverages.

The Aphria merger expands Tilray’s product portfolio with the addition of popular brands like Good Supply and RIFF dried flower and vapes, Chowie Wowie edibles, and the entire product line from Solei Sungrown Cannabis—Aphria’s first adult-use brand that debuted in April 2018, the same month Tilray launched High Park.

These brands remain “top performers” in Canada, Irwin says, where Tilray commands a leading market share of 16%, he adds. By 2024, Irwin expects to nearly double Tilray’s market share in Canada to 30% across both adult-use and medical markets—representing a billion-dollar business there, with another billion-dollar market potential awaiting internationally, he says.

“A big portion of the business we need to focus on now is the medical business,” he says, “(which) has tremendous opportunity, now that countries are opening up, to enable us to sell more medical products to the patients who need it.”

Growing on a Global Scale

Following its pattern of pacesetting firsts, Tilray was “among the first to enter many different countries to bring cannabis to patients around the world,” Faltischek says. Today, Tilray’s reach extends into more than 20 countries across five continents. With “boots on the ground” operations in Canada, the U.S., Germany, France, Italy, Spain, Portugal, Australia, New Zealand, Colombia, and Argentina, Tilray has its sights set on the world domination of cannabis.

“If you want to change the way the world looks at something, it’s important that you do it on an international basis,” Faltischek says. “We believe that medical cannabis has changed people’s lives for the better, and we believe that patients around the world deserve to have access to it. It’s part of our overall vision to use our leverage, our scale, and our expertise that we’ve developed in Canada to bring cannabis to patients everywhere.”

Countries considering medical cannabis regulation and expansion have called on Tilray’s global team to consult with government health officials and provide insights about scalable production standards, according to Faltischek. For example, Tilray provides medical cannabis to a group of patients in France to help the government there assess the viability of bringing medical cannabis into the country, Faltischek says.

Tilray also owns and operates Germany’s first and only in-country cultivation facility that is certified GMP and licensed under Germany’s Federal Ministry of Health. Tilray also operates a GMP-certified manufacturing facility in Portugal—making it the first and only LP to receive GMP certification in multiple countries, the company claims. These certifications allow Tilray to export cannabis products from Portugal to Germany and other European and international markets where medical cannabis is legal, further expanding its global production scale.

The biggest challenge of this global growth, Irwin says, is maintaining the same level of quality that patients expect as the company expands. To conquer this obstacle, Tilray employs a global standards team to enforce consistent operating procedures across its international operations.

“We’re taking lessons from our cultivation experience in Canada, but also taking the time to understand how that plant reacts in different geographies around the world with different environmental conditions,” Faltischek says. “For every location that you’re in, you need to make sure you understand the environment in which you’re operating.”

For example, when taking cannabis cuttings from a greenhouse in Canada to start Tilray’s indoor cultivation facility in Germany, the team conducted research to study how the plants would adapt to different growing conditions. “We believe it’s really problematic to make a commitment to bring medical cannabis into a country, and then not have that product fully accessible or consistent,” Faltischek says.

Ramping Up U.S. Infrastructure

While building its global medical cannabis empire, Tilray is strategically laying the groundwork for its entry into the U.S. market, where cannabis remains a federally controlled substance. In August 2021, Tilray acquired the majority of the outstanding senior secured convertible notes and associated warrants of Los Angeles-based MedMen Enterprises Inc. However, Tilray’s ability to convert these notes to equity hinges on federal legalization. Upon legalization and other necessary regulatory approvals, the notes and warrants would be convertible and exercisable for approximately 21% of the voting shares of MedMen. With 21 licenses and 25 locations across key urban centers in the U.S., MedMen represents a critical foothold in Tilray’s potential U.S. retail expansion.

“As a company that trades both on the NASDAQ and TSX, we cannot derive any of our profits, income, or sales from cannabis in the U.S., because it’s not federally legal,” Irwin explains. “Because we bought notes—we didn’t buy the company—we’re not earning any income from MedMen. Upon legalization, these notes would convert to equity, so there’s a tremendous opportunity there.”

Until then, Tilray is exploring growth opportunities beyond cannabis by pursuing adjacent business acquisitions in the U.S., like what Aphria did with Atlanta-based SweetWater Brewing Company in November 2020. More adjacent acquisitions like these could help Tilray hedge its bets—putting the company in position to pivot into cannabis-infused products upon legalization, while owning (non-cannabis) revenue-generating businesses until then.

“If we do these option deals, we don’t get sales or EBITDA [earnings before interest, taxes, depreciation, and amortization], and we really have to wait for legalization,” Irwin says. “But if we’re able to buy a craft brewery or spirits business, we do get sales and EBITDA, and then we have the ability to convert it to [cannabis] upon legalization.”

The 11th largest craft brewer in the country, according to the Brewers Association, SweetWater represents a huge potential for Tilray in the burgeoning beverage category. “THC drinks will be a big part of the future,” Irwin says. “Millennials make up the biggest part of the population, and millennials are some of the biggest consumers of [alcoholic seltzers], so I see a big opportunity for infused beverages.”

Fostering Adjacencies in Hemp

Before entering the cannabis industry via Aphria in late 2018, Irwin founded The Hain Celestial Group Inc. (NASDAQ: HAIN), an organic and natural products company, in 1993. Over 25 years, he grew the business to $3 billion in net sales, attracting passionate executives who were committed to the company’s mission of “changing the way the world eats,” says Faltischek, who served as EVP and chief strategy officer at Hain Celestial before following Irwin to Aphria—where the focus shifted to “changing the way the world looks at medicine and health and well-being, as it relates to cannabis,” she says.

Today, several former Hain executives have joined Irwin’s team at Tilray to bolster the company’s approach to food and wellness. The biggest brand in this category is Manitoba Harvest, which Tilray acquired for $316 million in February 2019. As one of the world’s largest hemp food manufacturers, Manitoba Harvest sells a broad portfolio of hemp-based food products such as hemp hearts, hemp seed oil, hemp protein powder, and hemp snacks in 17,000 stores across the U.S. and Canada, including Walmart, Whole Foods, Kroger, and online through Amazon. This extends Tilray’s retail reach into the natural foods sector, with obvious synergies, says Manitoba Harvest President Jared Simon (no relation to Irwin).

“One of the big synergies was on the research and development side of understanding the value of cannabinoids for their wellness properties,” says Jared, who spent half of his career at Hain Celestial with Irwin. “We’ve been doing a lot of work in parallel with other divisions at Tilray, looking at other cannabinoids and how they may be important to an overall wellness strategy.”

The merger between Tilray and Aphria created a new division, Tilray Wellness, which Jared also heads as president. Blending the team’s vast expertise in natural food products and cannabinoids like CBD, the new business provides a wellness platform to educate consumers about the benefits of hemp-derived CBD. This platform allows Manitoba Harvest to continue focusing solely on hemp foods, while Tilray introduces new business units to explore different applications of CBD.

“There still exists a huge amount of confusion in the marketplace amongst consumers and, frankly, amongst retailers in terms of the differences between hemp foods, CBD, and cannabis,” Jared says. “We’re spending a lot of time and energy and resources to educate consumers about the nutritional benefits. Our retailers look to us to be that education leader for their employees and ultimately for their shoppers.”

From social media channels to grocery trade publications and relationships with in-store nutritionists, Manitoba Harvest’s message is “hemp won’t make you high, but it is high in protein, high in fiber, and high in omega-3 (fatty acids),” Jared says. “We see a future in which hemp is going to become more ubiquitous in the diet as an important food source. There will be a tipping point when you start seeing more hemp foods in restaurants and CPG [products], and when that happens, you’ll see a great wave of acceptance by the consumer.”

Positioned for Profitability

Tilray’s financial results for the first quarter of fiscal year 2022, which ended August 31, 2021, reflect the company’s dominant position in the marketplace across sectors and geographies. Net revenue increased by 43% to $168 million, compared to $117 million in Q1 2021. This encompasses 38% growth in net cannabis revenue, which totaled $70 million, combined with net beverage revenue of $15 million following the SweetWater acquisition, and another $15 million in wellness revenue from Manitoba Harvest.

In terms of profitability, Tilray’s outlook is equally positive. Despite a net loss of $34.6 million in Q1 2022 (up from a loss of $21.7 million in Q1 2021), the company’s fiscal results reflect adjusted EBITDA of $12.7 million in Q1 2022, marking 58% growth compared to Q1 2021 and the tenth consecutive quarter of positive adjusted EBITDA. The company’s gross profit also increased 46% from $35 million in Q1 2021 to $51 million in Q1 2022.

With these results, the company is “maximizing near-term profitability through leadership in both higher-margin international medical markets and in Canada, complemented by incremental growth at SweetWater and Manitoba Harvest in the U.S.,” Irwin commented in the Oct. 7 press release announcing the financial results. “We believe we are ideally- positioned to succeed … and we look forward to accelerating our momentum as we build the leading CPG business in the global cannabis industry.”

Brooke Bilyj owns and operates Bantamedia, a national award-winning content, SEO and PR firm based in Cleveland.