It’s possible medical marijuana producer Tilray has done more to put Nanaimo on the global map than bathtub racing.
In the last 30 days, Brendan Kennedy, Tilray chief executive officer, has spent more than 100 hours in the air, flying to Toronto, New York, Boston, Baltimore, San Francisco, Chicago to Hong Kong, Sydney, London, Frankfurt to talk with hundreds of institutional investors about placing money in Tilray shares, which began trading on the Nasdaq stock exchange Thursday.
“I’ll tell you, I’ve certainly brought more managers of global wealth to Nanaimo to tour Tilray and Nanaimo than probably anyone else,” said Kennedy, who called from New York on Friday.
Tilray, which has operated in Nanaimo since 2014, is the first cannabis producer in the world to offer shares to the public on a U.S. stock exchange. By the end of trading Friday, Tilary had gained about 34 per cent in value at about $30 per share.
Capital from the shares offering will help finance expansion and production at Tilray’s subsidiary High Park Company, which operates High Park Farms and High Park processing facility in Ontario to supply the Canadian adult-use cannabis market. High Park also acquired the Canadian import and distribution rights to several cannabis products brands and develops its own brands.
The first adult-use crop was harvested at the company’s new High Park facility last week. Tilray also has a production facility in Cantanhede, Portugal.
“We were looking for multiple cultivation facilities in multiple locations around the world,” Kennedy said. “Our flagship facility is in Nanaimo and Tilray in Nanaimo is very focused on pharmaceutical-grade medical cannabis products for the Canadian patient and also for patients around the world,” he said. “We’ve served tens of thousands of patients, in Canada and globally, from Nanaimo. Our products are available in 10 countries on five continents.”
Tilray currently employs about 350 people, 225 in Nanaimo, and will hire another 150 by the end of 2018 as production gears up in Ontario and Portugal.
“We have been sending our teams from Nanaimo all over the world … experts in cultivation and manufacturing, processing, from our Nanaimo facility – obviously to Ontario, but also to our facilities in Portugal on a frequent basis,” he said.
Revenue from recreational reefer and shares investment will also support ongoing medical research programs and to expand production capacity for medical products in Nanaimo.
Tilray and the University of British Columbia are testing formulations on 40 Canadian military veterans and former police officers to treat anxiety and post-traumatic stress disorders.
“We have a number of other clinical trial projects going on. Pediatric epilepsy with the [Hospital for Sick Children] in Toronto, a chemotherapy-induced nausea trial in Australia, and a brain tumour trial – a glioblastoma trial – in Spain and all those formulations are all manufactured and produced in Nanaimo,” Kennedy said.
To date, Tilray has invested more than $100 million in Canada and $30 million in Portugal.
Kennedy said he is optimistic about both product markets; the difficultly lies predicting the next country that will be next to legalize, which determines how much production capacity to gear up for.
Kennedy said only Uruguay, a country of about 3.5 million people, has legalized recreational marijuana. When Canada’s Bill C-45 comes into effect in October, suddenly a total of 40 million people worldwide will legally have access to recreational marijuana products.
“Which is a 100 per cent growth in terms of countries, or a 1,000 per cent growth in terms of population,” he said. “But what I don’t know is what country will be the third country to legalize cannabis for adult use. It’s not a matter of whether there’ll be a third country. It’s a matter of which one and when. I know there’ll be a third, fourth, fifth country over the next five years.”
It’s the medical marijuana side of the business that shows steady, predictable growth. Kennedy said when he started in the business in 2010, 15 countries had legalized medical cannabis. Today there are more than 30.
Also, it’s one thing for a country to legalize medical or recreational cannabis use, but importing and exporting product is another matter.
“As optimistic and bullish as I am about this industry and moving medical cannabis around the world, which we do and ship internationally from Nanaimo, I do think one of the things I’m not very bullish on is the ability to move adult-use cannabis around the world,” Kennedy said. “I think we are a long way away from that.”