By Julie Hyman
Tilray posted its second quarter results revealing it generated a record net revenue of $193+ million, just short of Wall Street expectations. Like many in the U.S., the company is awaiting possible reclassification of Marijuana to a ‘Schedule III’ drug, which would have wide-reaching ramifications for taxation and research, and change business models for some.
Tilray CEO Irwin Simon joins Yahoo Finance to give insight into what might happen to his business if the Biden administration follows through with its pursuit of get the plant reclassified, and in turn getting the Drug Enforcement Agency to ease restrictions.
Simons comments: “I think it would help bringing in institutional shareholders that actually can hold the stock, for a lot of shareholders today or institutions that cannot hold cannabis stock, and it would help us with the banking world today because right now, any of our profits or proceeds from our Canadian cannabis business, even though Canada is legal, we can not use any of those proceeds within our US operations.”
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor’s note: This article was written by Nicholas Jacobino
JOSH LIPTON: One big question, Irwin, out there is these US health officials recommending easing restrictions on marijuana, reclassifying marijuana as a Schedule III drug. How do you think that plays out? Or when– and what would it mean for Tilray as a business?
IRWIN SIMON: It would mean a lot for Tilray. If you step back, number one, we have a major medical cannabis business in Europe and a major medical cannabis business in Canada. And taking that know-how and taking all those years of what we’ve built here in regards to working with the medical professions with prescriptions and bringing that to the US would help us tremendously to build a good medical cannabis business here in the US.
I think it would help bringing in institutional shareholders that actually can hold the stock where a lot of shareholders today or institutions cannot hold cannabis stock. And it would help us with the banking world today, because, right now, any of our profits or proceeds that come from our Canadian cannabis business, and even though Canada is legal federally, we cannot use any of those proceeds within our US operations.
JULIE HYMAN: So I guess, Simon, what do you think the likelihood then? Is that– that’s something that’s been reported upon as a possibility. Where do you think we are a year from now when it comes to regulation?
IRWIN SIMON: You know, great question. If you would ask me where I think we’d be a year today when Joe Biden became the President of the United States, I would say cannabis would have been legalized, OK? Listen, something’s got to happen, which is, you know, kind of crazy out there today. Cannabis in the U.S. is scheduled the same as heroin. Actually, cocaine does not have the same scheduling.
So there has to be a de-scheduling where cannabis is scheduled as number 3 from a scheduling standpoint. If you come back and look at it today, cannabis is legal in 27 different states in regards to recreational, about 10 states in regards to medical. Over 90 per cent today of the citizens of the United States of legal age want cannabis legalized. So something’s got to happen. It’s just our politicians got to go ahead and do it.
My belief, and this is nothing coming from any of the lobbyists or anything I know, I believe something will happen in regards before the elections. Now the question is, from a timing standpoint, would it ever get through Congress and Senate before next year’s election? And that’s what my concern would be.