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How Irwin Simon found himself at the top of the Canadian cannabis industry
Every time Irwin Simon buys a new company or brand, his barber gets upset.
“I’m very superstitious,” said Simon, chief executive officer of Tilray Inc. “During a deal, I never get a haircut.”
Depending on how the next few years go, the 63-year-old executive might have a hard time staying well-coiffed if deal activity in the fast-paced cannabis sector continues to heat up. Simon – who in previous roles sold everything from diet drinks to free-range organic chicken – now has one goal ahead of him: running the biggest pot company in the world.
And as he looks forward to capturing a bigger slice of the global cannabis pie, his business acumen, developed over decades in various marketing and management roles, will be put to the test as rivals in the U.S. are already generating oodles of cash in a market where more established Canadian players remain on the outside looking in.
"There is a lot of excitement in the cannabis world," he said in a wide-ranging interview. "People stop me on the streets now in New York saying, 'That's Irwin at Tilray!' There's a lot of people following this industry now."
Business, as it turns out, has always been in Simon's blood. His formative years were spent in Glace Bay, N.S., where his father ran Simon's Dairy, a small grocery store along the Cape Breton coal mining town’s main thoroughfare on Union St. Along with his four siblings, Simon helped stock shelves and deal with customers, while earning an early education in business by watching his father Norman.
"He was very conservative. He didn't want to take chances," Simon said about his father. "What I've learned in life is that you can't do the same thing day in, day out."
At 17, Simon left Glace Bay for the big city – Halifax – where he majored in sociology at Saint Mary's University and, as a Residence Don, picked up a few extra bucks selling Moosehead beers to students that he received for free from the brewery.
After graduating, he moved to Toronto in 1981 where he had a brief gig selling insurance at London Life, and later sold Häagen-Dazs ice cream for a George Weston Ltd. subsidiary. When Pillsbury bought the ice cream brand, he moved to New York City in 1985 to help expand the business throughout the U.S.
"I was involved in everything with sales, marketing, business development. I never went to school for it, but it's really where I got my MBA," Simon said.
This is an excerpt of a longer feature posted on BNN Bloomberg's website. To read the rest of this story, click here.
THIS WEEK'S TOP STORIES
Canadians bought nearly $300M of cannabis in March, up 14% from February
Canadian cannabis sales hit a record $298.1 million in March, a sharp increase of nearly 14 per cent from the prior month and a rebound from two straight monthly declines, according to Statistics Canada. On a per-day basis, sales are up about three per cent from February, a sign that COVID-related lockdown measures that weighed on the industry may be fading away. On an annualized basis, Canada's legal recreational pot industry currently operates at an annual run rate of about $3.56 billion, with all provinces and territories reporting a sales bump. Not surprisingly, Ontario led the country in sales with $103.4 million, a monthly increase of 19.2 per cent. "While this suggests a robust backdrop for our companies under coverage, we believe the expense of capturing category growth is increasing with an increasingly fragmenting market," said Stifel Analyst Andrew Carter in a note to clients Friday.
U.S. politicians aim to get FDA to regulate CBD products, legalize cannabis
A new bipartisan bill introduced in the U.S. Senate last week aims to get CBD products used in consumable products like foods, drinks and dietary supplements officially regulated by the U.S. Food and Drug Administration, Marijuana Moment reports. The cannabis news site said the bill may create new labelling and packaging requirements for CBD products and comes as the FDA has been rather slow in announcing its own regulations for CBD and other hemp-based food products. Cowen & Co. Analyst Eric Assaraf wrote in a report that the bill likely still faces an uphill climb in Congress, but it should be viewed positively considering FDA's inaction on CBD regulations. Meanwhile, in other U.S. cannabis legalization news, Marijuana Moment reports another U.S. Congressman plans to announce a new bill to federally legalize marijuana and promote social equity in the industry as early as next week.
Canopy Growth expands advisory role with Martha Stewart
Martha Stewart is expanding her role with Canopy Growth, taking on a more formal position with the pot giant as its new strategic advisor. More than two years ago, Stewart joined Canopy to launch a series of CBD-infused products, but this position will see the lifestyle guru provide the company with some of her knowledge on product development and branding expertise, as well as new products and "strategic partnerships". Along with the new appointment, Canopy said that it struck a distribution deal with Southern Glazer's Wine and Spirits to help distribute Martha Stewart-branded CBD products in seven U.S. states.
Hexo to buy 48North for $50M, may partner with private-label brands in U.S.
Hexo is making another play to increase its share of the Canadian recreational market after announcing it would acquire 48North for about $50 million in an all-stock deal. 48North has found some success selling concentrates and topical products, but controls roughly one per cent of the Canadian cannabis market. Hexo said it believes it can derive about $12 million in cost savings following the merger. Meanwhile, Hexo told investors at a bank conference that it may approach U.S. cannabis companies to partner on some private label brands the company already sells.
Quarterly Results Wrap: TerrAscend, Nova, Verano Holdings
Here's a summary of some of the cannabis industry companies that reported quarterly results this week:
- TerrAscend: First quarter revenue up 106 per cent to US$53.4 million, US$22.6 million in adjusted EBITDA, compared to a US$3.7 million gain a year earlier. The company also said it expects full year 2021 sales to exceed US$300 million and adjusted EBITDA to climb to US$128 million. (Release)
- Ascend Wellness Holdings: First quarter revenue up 192.7 per cent to US$66.1 million, US$15.8 million in adjusted EBITDA, compared to a US$2.5 million gain a year earlier. (Release)
- Nova Cannabis: First quarter revenue up 17.2 per cent to $18.4 million, a loss of $2.2 million, compared to a $184,000 loss a year earlier. The company has 53 licensed cannabis stores operating in Canada and a further 30 stores in development. (Release)
- Verano Holdings: First quarter revenue up 117 per cent to US$143 million, US$75 million in adjusted EBITDA, compared to a US$41.4 million gain a year earlier. (Release)
- The Parent Company: First quarter revenue of US$39.9 million, US$16.6 million in profit. (Release)
- MediPharm Labs: First quarter revenue down 50.4 per cent to $5.5 million, $6.2 million in adjusted EBITDA loss, compared to a $5.7 million loss a year earlier. The company noted its board has formed a special committee to lead the search for a permanent CEO. (Release)
- Delta 9 Cannabis: First quarter revenue up 12 per cent to $13.1 million, $6.2 million in adjusted EBITDA, compared to a $1.7 million gain a year earlier. (Release)
Analyst Call of the Week - BMO Capital Markets on industry outlook
BMO Capital Markets held its annual Farm to Market Conference earlier this week and hosted several cannabis company executives to provide their outlook on the sector. Analyst Tamy Chen said one of her key takeaways from the conference is how companies are more optimistic on how the market will fare in the second half of the year as COVID-related lockdowns begin to end, better weather will support customers heading into stores and more retailers are set to open up in Ontario and Quebec. As well, more producers are eyeing the U.S. CBD market, even though it's an incredibly competitive environment and there's a lack fo regulatory clarity from the U.S. FDA. "Despite these issues, our sense was that a number of companies - including Tilray, Hexo and Village Farms - are seeking opportunities to either enter or build on their presence in this market," Chen wrote. Finally, Chen highlighted that Tilray is "actively exploring potential pathways and strategies into U.S. cannabis" that include further acquisitions of a CPG company or partnerships with other U.S. pot companies.
CANNABIS SPOT PRICE: $5.58 per gram -- This week's price is down 0.8 per cent from the prior week, according to the Cannabis Benchmark’s Canada Cannabis Spot Index. This equates to US$2,093 per pound at current exchange rates.