By David Jagielski – Nov 10, 2022 The Motley Fool
The company continues building relationships in an effort to grow its sales.
Partnerships, strategic alliances, mergers, and acquisitions. If you’re looking to invest in Tilray Brands (TLRY 7.46%), these are the terms you should get accustomed to hearing frequently as the company focuses on growing its presence across the globe.
In an effort to hit $4 billion in annual sales by fiscal 2024, Tilray is looking for ways to quickly expand its top line via partnerships and acquisitions since it isn’t likely to reach that target by just growing organically. The company has already partnered with multiple cannabis businesses, and this month, added another to the list: Charlotte’s Web (CWBHF -1.95%).
Tilray will be able to sell Charlotte’s Web products in Canada
Charlotte’s Web currently sells products in Canada, but they aren’t easily accessible. Customers need special medical exemptions through Health Canada. Under a strategic alliance with Tilray, however, all of the company’s CBD products will now be available through Tilray’s distribution network, which will make it easier for consumers to access them.
Manufacturing of the products will actually take place in Canada, with Tilray following “the same proprietary methods and specifications Charlotte’s Web employs in the USA.” They’ll be hemp-based cannabis products and contain low levels of tetrahydrocannabinol (0.3% or less).
These aren’t products that will give users a high. Instead, they’ll be suitable for the medical market. Tilray plans to make them available early next year.
Is this a good move for Tilray?
This will complement the company’s hemp business, as it already owns Manitoba Harvest, a leading company of hemp-based foods. But financially, it can be difficult to estimate the impact of the Charlotte’s Web deal, as the press release announcing the partnership didn’t specify financial details, including how costs or revenue will be split between the two companies.
But it’s fair to say this deal won’t likely lead to a significant amount of revenue for Tilray. Over the trailing 12 months, Charlotte’s Web has generated a modest $87 million in sales.
The company’s operations aren’t vast and they predominantly come from the U.S. market. Although Charlotte’s Web doesn’t break out revenue by country, given the limitations Health Canada has put in place on the company’s products, it’s not likely that a significant amount of revenue comes from outside of its home market.
Read the entire article hhttps://www.fool.com/investing/2022/11/10/tilray-brands-is-partnering-with-another-us-cannab/ere