Canadian cannabis companies are taking the world by storm, and industry leaders are taking notice.
Despite growing Canadian interest in the U.S. market one leading cannabis company boss says he prefers to focus on his home market – for the time being. Shares in Aphria have jumped some 25% since company chairman and interim CEO, Irwin Simon joined the business in December last year.
In an interview with business website BNN Bloomberg he said: “I want to make sure we get Canada right. “I think there’s a lot of money to be made here in Canada. I think there’s a lot of growth in Canada. Making sure you get Canada right and learning from that will be very much the right model as you go in to the U.S.”
Canadian Invasion is Underway
Simon’s position is in marked contrast to the stance of fellow Canadian cannabis company Canopy Growth who last month announced a $3.4 billion purchase of U.S. business Acreage Holdings. And its Co-Chief Executive Officer Bruce Linton has re-stated his view that Canadian companies need to be actively taking advantage of the opportunities south of the border.
Ontario-based Aphria business is currently undergoing a 90-day strategic review led by Simon, which spurred by a short-sellers’ report that took aim at assets it acquired in Argentina, Colombia and Jamaica. Since taking the helm, Simon’s been focused on the completion of a new automated assembly line, and preparing for the second wave of cannabis legalization with edibles and concentrates available later this year.
Simon says he had had contact from from U.S. executives who want to partner with Aphria, but says he’s in no rush to make a deal. He said: “I want to make sure when we pick the U.S. strategy, it’s the right chemistry among the companies. It’s not about a stock trade. It’s not about a press release. It’s about how we create real value for shareholders.”
Simon said he doesn’t really understand Canopy’s deal for Acreage Holdings, saying the Canadian firm would have no control over running Acreage, making a “big bet that [Acreage] will be the premier U.S. cannabis company.”
Is This Deal Like an Arranged Marriage?
“You’re committed to that company no matter what,” Simon said. “It would be like me saying to someone who I just got to know that we’re going to get married in a certain period of time, no matter whether I love you or not,” he told BNN Bloomberg
Despite waiting on the sidelines, Simon said he isn’t worried about being too patient while the rest of the industry plays their U.S. hand. The company might begin discussing U.S. plans this year, but he doesn’t expect any announcements to be made in 2019.
He said: “If you ask me what I want Aphria to be, I want to be a consumer packaged goods company. If we are that consumer packaged goods company, we will have plenty of options in the U.S. market.”
During an interview with BNN Bloomberg Linton said: “There’s only 36 million of us. Canada is a policy environment where you get to innovate, we get to regulate and we get to run a great business, but if you only stay in Canada you’re doomed.
“The rest of the world has a lot more people and what we have to do is take everything we learn and transport it to other markets. That’s why we’re in Europe. That’s why we did this for America.”