The chief executive officer of Tilray Brands Inc. said the acquisition of competitor Hexo Corp. will help position his company to lead Canada’s cannabis industry.
“It was the right time for these two companies to come together,” Irwin Simon said in a television interview on Tuesday, a day after the deal was first reported by BNN Bloomberg.
Tilray is paying US$56 million to buy the remaining outstanding Hexo stock, on top of a US$173 million secured convertible note it purchased from a former Hexo creditor last summer.
Simon told BNN Bloomberg’s David George-Cosh and Jon Erlichman that the two companies had already been working together following a service agreement established in July 2022, which made it only a matter of time for Tilray to acquire Hexo.
He said the cannabis market in Canada needs a bigger name to lead change, arguing the current landscape is oversaturated and rife with regulatory missteps such as high excise tax payments to the government. He said the combined companies will have the facilities and resources they need to continue growing.
“Every category needs a leader, every category needs someone to take a hold of it and really grow this industry,” he said.
Echoing similar comments made by other Canadian cannabis executives, Simon also took aim at regulation of his industry, calling for changes to taxation on cannabis companies.
Now nearly five years after Canada legalized recreational cannabis, Simon said he expects more “carnage” among companies that are struggling with marketing and high taxes, and he expressed hope that Tilray can assist in making changes to help the industry thrive.
“Canada was first country in the world to legalize adult-use cannabis, and with that we should lead and teach other countries, what's the right way to do it” he said. “I think that's where Tilray will take that position.”
He also called on the government should listen to the industry’s concerns, pointing to a lack of progress from any significant cannabis regulatory changes in last month’s federal budget.
“We’ve really got to get behind the cannabis industry and really treat it like it's a real industry (that’s) going to be here for a long time,” he said.
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