Tilray Brands Inc. (Nasdaq: TLRY) (TSX: TLRY) may expand its alcohol industry footprint or begin growing fruits and vegetables to make up for a shortfall in the marijuana trade if cannabis sales remain in a slump.
Tilray CEO Irwin Simon revealed during the company’s second-quarter earnings call on Monday that company leadership is considering just such a pivot, Bloomberg reported Monday, particularly due to the lack of congressional action on U.S. legalization.
Because Congress has let cannabis remain federally illegal, Tilray’s U.S. distribution network is going largely unused.
“There’s food shortages in the world of lettuce, tomatoes, strawberries,” Simon said during the call. “If we have overcapacity, how do we start growing fruits and vegetables at some of these facilities and supply food to the world?”
Simon cautioned that such a move would be temporary and that Tilary’s primary focus will always be the international cannabis industry. The company already has a sizable presence in Canada and Europe.
Simon also told Bloomberg after the earnings call that any cultivation facilities that are converted to use for produce growth could be reconverted back for marijuana growing once the U.S. and more European countries embrace full cannabis legalization.
Tilray already owns three alcoholic beverage makers – SweetWater Brewing Co., Montauk Brewing Co., and Breckenridge Distillery – and is planning more acquisitions in the hemp industry to bolster its hemp-based food products footprint. Simon said Tilray is looking to expand in those areas as well, particularly as the company waits for lawmakers to move on marijuana reform.
For Tilray’s second quarter, company revenues were down 7% and had a net loss of $67 million.