Tilray wants to light up US market for hemp-derived drinks
Canada's largest cannabis producer wants to break through the hazy U.S. market with an expansion of hemp-based drinks.
Tilray Brands has expanded its presence in states with an infrastructure for hemp-derived drinks like Georgia and Florida. Tilray launched hemp-derived THC drinks in several markets across the U.S. and the company's drinks are now in 1,000 stores across the country, according to its latest earnings call.
Sales of hemp-derived THC drinks brought in $382 million in 2024, according to Brightfield Group. U.S. sales are expected to grow to nearly $750 million by 2029.
Jared Simon, the president of Tilray Wellness, said many of the hundreds of retailers it works with in the alcohol ecosystem, like beer and liquor stores, are open to growing the presence of hemp drinks.
'That's a big synergy that we have as Tilray, and having a network of hundreds of new distributors that we already work with,' Simon said. 'We've innovated time and time again with cannabis-driven THC in the Canadian market, and we've been able to take those learnings and apply them to hemp-derived THC here in the U.S.'
Tilray was able to begin selling hemp delta 9-derived drinks because of a loophole in the 2018 Farm Bill, which allows companies to sell drinks with 0.3% THC. This has allowed for the sale of the drinks across state lines in several states. Other brands, like Jones Soda's Mary Jones, have rolled out similar products.
Tilray has struggled in the U.S. cannabis market as the path to national legalization remains unclear. The company pivoted to beverages in the U.S., becoming the fifth largest craft brewer through a series of acquisitions from beer giants Molson Coors and Anheuser-Busch.
As traditional cannabis and alcohol sales slow, Tilray is positioning hemp-derived drinks as a wellness product that helps consumers unwind without getting them high or drunk. The company also introduced non-alcoholic drinks within its craft beer brands.
But the company's financial state is driving concern as consumer sentiment declines. On its earnings call last month, the company reported a $700 million non-cash impairment charge linked to 'market volatility' and a perception of reduced likelihood of cannabis regulation, the company's CFO Carl Merton told investors.
Tilray's CEO and chairman Irwin D. Simon said the company is confident in its potential for long-term success, and sees the current hit to its revenue as a temporary roadblock. He pointed to the company's cannabis infrastructure and diversification strategy across the beverage industry.
Simon said Tilray has aspirations to make hemp-derived drinks a "multi-million dollar business." More consumers are switching from cannabis to hemp-derived THC, according to Brightfield Group. A survey from the research firm found 22% of respondents said hemp-derived drinks served as an entry point into the cannabinoid world, potentially creating new cannabis customers for companies like Tilray.
"I think a big thing is educating the consumer what hemp-derived drinks are and what Delta-9 drinks are, and the benefits from them," Simon said in an earnings call. "So that's a big, big opportunity for us.'
Sarah Zimmerman contributed to this story.
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