Doubling Down On Booze
Doubling Down On Booze
Tilray is doubling down on its expansion into alcoholic beverages…
More & more consumers are choosing to consume cannabis as opposed to consuming alcoholic beverages.
Subsequently, several of the most successful alcoholic beverage companies in the world have begun making moves into cannabis, however, during this same period of time — cannabis companies are also making moves into booze.
Canadian producer Tilray has announced its acquisition of Colorado based Breckenridge Distillery for an undisclosed sum.
Founded in 2008, Breckenridge Distillery is an award-winning craft distiller based in Colorado with Tilray claiming the acquisition will lead to “new and innovative products through the development of non-alcoholic distilled spirits, including bourbon whisky, that is infused with cannabis”.
Last quarter, 9% of Tilray’s revenue came from alcoholic beverages totaling $15.5 million USD courtesy of their merger with Aphira who previously acquired U.S based Sweetwater for $300 million USD.
Mission statements vs reality…
A company’s mission statement is used to explain in simple and concise terms its reason to exist.
“Our mission is to improve lives through the power of cannabis and hemp by building the world’s most trusted and valued cannabis and hemp company.” — Tilray’s mission statement.
When we examine Tilray’s mission statement, it becomes clear that this new focus on alcoholic beverages is very different from its previously stated goals.
It’s incredibly difficult to build a successful cannabis company solely focused on the adult-use market in Canada, or any other market for that matter.
Granted this deal will increase Tilray’s revenue, however, Tilray is still struggling to retain its existing market share in the Canadian cannabis market.
As opposed to focusing on resolving these issues to retain its existing market share — Tilray continues to emphasize its strong U.S presence courtesy of this expansion into new categories outside of its core business.
Cannabis companies buying booze companies is a terrible idea.
As we have seen with Hexo & Molson Coors — cannabis companies can successfully produce cannabis beverages without having to outright acquire existing alcoholic beverage companies.
My perspective is that these deals are being fueled by Canadian cannabis company’s desire to convince investors that they will succeed in the U.S cannabis market, however, I fail to understand how these acquisitions will help Canadian producers succeed in the U.S cannabis market.
Canadian Drug Reform
Breaking down the new approach Canada is taking to regulate drugs…
Canada was the very first G7 nation to legalize cannabis for adult-use purposes in October 2018.
Legalizing cannabis was a very big step in the right direction, however, parts of Canada are pushing for bigger changes when it comes to regulating drugs.
The province of British Columbia in Canada, home to 5 million people, is seeking to decriminalize the personal possession of small quantities of drugs and has filed a submission with Health Canada to do so.
Vancouver, a city home to 0.6 million people has also made a similar submission.
Toronto, home to 5.9 million people is also seeking to update its approach to regulating drugs with the Toronto Board of Health voting in favor of an application to decriminalize the possession of small quantities of drugs.
The Canadian federal government has introduced legislation to repeal mandatory minimum penalties for drug offenses.
This comes at a time when Canada is experiencing a terrible opioid crisis.
Between April 2020 to March 2021, a total of 6,946 apparent opioid overdoses were reported in Canada.
This marks an 88% increase from the same period prior to the pandemic.
We would all benefit from a much greater expansion of the policy where we legalize and regulate products as opposed to outsourcing this to organized crime, and in time I can see Canada doing so.
Decriminalization is a great first step, however, consumers are still exposed to a completely unregulated supply chain controlled by criminal organizations.
Click-Bate Cannabis Headlines
Breaking down the click-beat headlines suggesting cannabis is bad for sleep…
The biggest threat to the success of the cannabis industry?
The spreading of misinformation.
History repeats itself…
Misinformation is by no means a new phenomenon the cannabis industry is having to contend with as is evident by the success of the previous misinformation campaigns such as the “reefer madness” in 1936.
One year later the Marihuana Tax Act was passed — the first key milestone on Harry J Anslinger’s journey to make cannabis illegal in the United States.
During this period of time, many claims were made regarding the dangers of cannabis — none of which were based on data.
Yesterday, several prominent media companies published articles regarding the negative impact cannabis has on sleep.
The study in question analyzed 21,729 adults living in the United States between the ages of 20 and 59 who consume cannabis for sleep.
The key data points each the publications focused on is that adults who consume cannabis for 20+ days each month:
- Are 64% more likely to sleep less than 6 hours a night.
- Are 76% more likely to sleep longer than 9 hours a night.
Correlation vs causation…
Per a 2019 study performed by Jeffrey Graham, the second most popular reason why people choose to consume cannabis is to help them sleep.
As such, it stands to reason that people who have trouble sleeping are turning to cannabis to help them solve this problem.
If the study had examined people’s sleep patterns prior to consuming cannabis vs after they began consuming cannabis then we could debate the impact cannabis has on sleep, however, they did not.
Consequently, we cannot conclude that cannabis negatively impacts people’s quality of sleep as it’s equally likely that cannabis is not causing these problems, rather these people had pre-existing problems with their sleep.
“Correlation does not mean causation.
There are countless confounding variables here…this conclusion and how it is presented to the public is irresponsible.” — Brian Geddes, V.P Sales for Jane technologies said.
The click-bait headlines we saw yesterday are the by-product of a business model where publishers compete to receive the largest amount of clicks.
Unfortunately for cannabis, there are many people in the world who still believe cannabis is a dangerous drug.
Subsequently, there are people who will click on any & all articles which confirm this bias they have towards cannabis.
This fear-mongering related to cannabis isn’t going away anytime soon, however, with an ever-increasing number of resources such as Leafly & The Cannigma focused on educating consumers on the benefits of cannabis — I am confident we can continue to counteract this fear-mongering.