Yahoo Finance Tilray CEO: Fortune 500 companies are becoming less afraid of the pot sector
Fortune 500 companies looking to invest in the cannabis sector are approaching with less fear than 18 months ago, according to Tilray’s (TLRY) chief executive officer. Brendan Kennedy said part of that has to do with the stock declines that have erased billions in market value since those high-flying days.
Speaking on a conference call with analysts following the B.C.-based company’s first-quarter earnings, he said the conversations he is having with potential investors are less frenzied and more “methodical” these days.
“I think a year-and-a-half ago the valuations of companies in this industry, and the volatility, scared off a lot of those good Fortune 500 companies,” he said on Monday evening. “They tended to be in a panic trying to understand the industry.”
Tilray is certainly no stranger to changes in valuation. The company’s shares listed on the NASDAQ at $17 months before recreational legalization in Canada. They briefly roared above $300 in intraday trading at their peak in October 2018. Tilray shares closed at $8.08 on Monday.
Kennedy said major investments by booze giant Constellation Brands (STZ) in Canopy Growth (WEED.TO)(CGC) and cigarette-maker Altria (MO) in Cronos Group (CRON.TO)(CRON) “scared a lot of people” at beverage, tobacco and consumer packaged companies.
“We were educating some pretty large companies about the cannabis industry,” he said.
Kennedy said his company’s joint venture with beer brewer AB InBev (BUD) to produce cannabis beverages took about a year to solidify before it was announced.
He added that a lot of the conversations he is having right now are focused on international markets, but did not go into greater detail.
“We are seeing more interest from international partners who are looking at other CBD products in certain countries and medical pharmaceutical products,” he said.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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