Tilray plans to spend up to C$419 million on the world’s largest hemp food company. This is another example of why 2019 is the year of CBD, and it’s a great sign of things to come for your portfolio…
Proving that 2019 is the “Year of CBD,” we’ve seen some big moves in the hemp market. Canopy Growth Corp. (NYSE: CGC) announced in January it would spend up to $150 million to produce hemp in New York, and it quickly upped the ante with plans to invest up to $500 million in the U.S. market.
Starting an operation from scratch is one strategy, and it could give Canopy an early edge as a leader in the CBD market. With this massive investment plan, they can produce oils, balms, and tinctures in the cannabis subsector I expect to be worth $2 billion in 2019.
But I want to talk about another strategy Tilray Inc. (Nasdaq: TLRY) is taking.
On February 20, Tilray announced an acquisition plan for Manitoba Harvest, the world’s largest hemp food company. Manitoba Harvest products are sold in over 16,000 stores in North America. The food company generated C$94 million in sales in 2018, which gives Tilray a nice boost in revenue when the acquisition is finalized.
Of course, acquiring the food maker won’t come cheap, with Tilray planning to spend up to C$419 million in cash and stock to own Manitoba.
Tilray’s Latest Hemp Play
One way to jump in the hemp and CBD market is to start an operation and build a brand from nothing.
The other is to do what Tilray is doing with Manitoba Harvest – buy a well-known brand that is already up and running.
Each strategy is different, but the important thing to note is the smartest executives in the industry are trying to reach the same goal: domination of the global cannabis market.
And that starts with trying to control the health sector for CBD and hemp products, whether it be through food or wellness products. That’s where the real money is up for grabs, and that’s why the best CBD stocks are in our portfolio, right now.
We’re just beginning to scratch the surface of marijuana’s incredible potential. Right now, we’re barreling head first toward an explosion of marijuana opportunities for smart investors who go all in on this lucrative industry. In fact, if you move on these two opportunities today, they could make you a fortune – practically overnight. Just click here to take a closer look.
Manitoba has signed deals with retail giants Amazon.com Inc., Costco Wholesale Corp., and Walmart Inc. If Tilray were trying to produce a hemp-based food line on its own, it could take years of product development and negotiations to get these deals. It would take even more time to get the data on what products sell the best.
Tilray gets to skip that expensive and time-consuming process, as Manitoba Harvest has been in business for over 20 years. This move exemplifies the importance of M&A at this stage of the cannabis markets.
Right now Manitoba doesn’t sell any CBD products – just hemp proteins and oils derived from hemp seed, which does not contain CBD. Tilray is betting that the consumer leap from “hemp food” to “hemp food with CBD” will be an easy one. Only time will tell if Tilray is right, but I applaud their approach.
Of course, there’s also nothing wrong with Canopy’s strategy of building out its own resources.
All it comes down to is that the smartest folks in the cannabis industry are trying to grab their stake of the $2 billion CBD market.
And if you’re still sitting on the sidelines, my question is, why aren’t you following their lead?
Thank you for being an integral part of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
P.S. Over the years, the team here at NICI has noticed a trend. If you want to beat Wall Street, if you want to trade like America’s elite, you need to have this one invaluable tool in your arsenal. Not only does it help you cut through the market noise, it also helps pinpoint the most lucrative profit opportunities in the game. And if you click here we can show you how you can get this powerful investing tool at your fingertips.
One response to “There's More Than One Way to Dominate the Hemp Market”
February 22 2019