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FORTUNE.COM// FEB.1 .19Tilray’s logo now appears on its dried (smokable) marijuana
flowers, ingestible oils, and capsules. Each is packaged like pre-
scription pills in bottles marked with the concentration of THC
(the psychoactive ingredient that makes people high) and CBD—
and, in Canada, warning labels about adolescent addiction. The
company first recorded sales in April 2014 and had $5.4 million in
revenue in 2015. This year, Wall Street expects sales to more than
quadruple, to around $186 million, from $45 million last year.
Tilray should also pass a major milestone in 2019: In January, it
unveiled plans to release newly legalized CBD-infused products,
from whey protein to sunscreen, in the U.S.—a move intended to
give the company U.S. revenue for the first time.
To stay ahead, Kennedy spends a lot of time trying to predict
which country will be the next to legalize marijuana, so that
Tilray will be there when it does. This summer, he commissioned
a model with 99 different inputs, from gay marriage’s legal
status to a country’s dominant religion, to predict medical and
adult use legalization. So far, it has given him an early heads-up
on South Korea, which in late November stunned the world by
legalizing medical cannabis.
As we exit Tilray’s Nanaimo warehouse, Kennedy excitedly no-
tices the grassoutside the building: “The lawn looks really good!”
The last time he was here, he explains, the yard was overgrown
with weeds—making a poor first impression on visitors. He let his
displeasure be known inside the company. “It kind of drove me
nuts,” he says. “We’re supposed to be growing things!”HE TILRAY BRAND didn’t really gain recognition in
America until July 19, when it became the first
cannabis company to have its IPO on a U.S. stock
exchange. The offering raised $153 million, with
shares priced at $17 apiece. At the stock’s peak in September, it
had risen 1,159% in just two months.
Though the debut turned Tilray into a market darling, up
until then it had been treated by much of Wall Street as a sort of
redheaded stepchild. Kennedy was in a rental car garage in San
Diego in mid-April on his wife’s birthday trip when he got the
surprise phone call from the first bank that had agreed to un-
derwrite Tilray’s IPO—letting him know they were backing out.
(He won’t say which bank.) “I had to get out of my car because
I was screaming so loudly, I didn’t want to scare my children,”
he recalls. A second bank later had the same change of heart:
Its board had nixed the deal for “reputational reasons.” When
Cowen and Canada’s BMO eventually took it public, Tilray had
to pay up for the privilege. To obtain the directors and officers
liability insurance required of all public companies, Tilray had
to pay five times as much as the typical rate for less than half the
coverage, according to CFO Mark Castaneda.
In fact, while Tilray’s business may be perceived as involving
a taboo or a vice, there’s no legal reason for banks or investors to[email protected]BIGBEERConstellation
Brands
The parent of Corona
beer and No. 386 on
theFortune 500, Con-
stellation in August
invested $4 billion in
Canadian cannabis
producer Canopy
Growth, anoint-
ing it the beverage
company’s “exclu-
sive global cannabis
partner.” Constella-
tion’s 37% stake sent
Canopy’s stock—and
all the other cannabis
stocks—soaring.BIGTOBACCOAltria
The company behind
Marlboro cigarettes
(No. 154) in December
bought a 45% stake in
Canada-based Cronos
Group for $1.8 bil-
lion. The tobacco
giant expects the
partnership to lead to
“cannabis vape prod-
ucts,” among other
marijuana-based
offerings.BIGBEERMolson Coors
In August, Molson
Coors (No. 275)
teamed up with
Quebec-based HEXO
Corp., purveyor of the
medical marijuana
brand Hydropoth-
ecary, to create
“reliable and consis-
tent” nonalcoholic
cannabis beverages.
In December, Tilray
struck an analogous
deal with AB InBev to
research THC- and
CBD-infused bever-
ages, seeking a Bud
with a different buzz.BIGPHARMANovartis
In December, Tilray
inked a deal with
Sandoz, a division of
Swiss drugmaker No-
vartis (No. 203, Global
500), to expand their
distribution partner-
ship for cannabis oils
and pills. It’s the only
such deal between
Big Pharma and a
cannabis company
to date.Pot Goes Legit:
Big Business’s Joint VenturesAs marijuana legalization expands,
these big companies are teaming up
with Canada’s legal-weed startups.CO
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