Cannabis Weekly Round-Up: Tilray CEO Gets Big Bonus

Canadian cannabis producer Tilray (NASDAQ:TLRY,TSX:TLRY) earned the spotlight this week as it shared its most recent financial results and showed how much compensation its CEO is getting.

Meanwhile, a new cannabis exchange-traded fund (ETF) has joined the investment landscape, adding more versatility to the investment tactics available for cannabis investors.

Keep reading to find out more cannabis highlights from the past five days.

Tilray CEO compensation raises eyebrows

A report from MJBizDaily based on recent filing disclosures reveals Tilray CEO Irwin Simon has received cash bonuses worth US$13.2 million throughout 2021. He’s gotten nearly US$30 million so far this year.

According to a report from the GrowthOp, Simon was the highest-paid CEO in the Canadian cannabis industry for 2019. At the time he received $18 million in total compensation.

The news came as Tilray issued its financial report for the Q1 period of its 2022 fiscal year, reporting a loss line of US$34.6 million.

The executive bemoaned that money could have been saved if more affordable manufacturing processes from the company’s Aphria component had been introduced to Tilray products. Back in December 2020, Simon spearheaded a merger deal between the two Canadian cannabis producers.

“Our cannabis adjusted EBITDA would have been several million dollars higher, if legacy Tilray products had been produced under a more efficient Aphria cost model,” Simon said during a conference call to discuss the results, as per a Canadian Press report. The company promised the amalgamation would lead to savings and so far has has saved US$50 million.

As part of Tilray’s financial update, Simon told BNN Bloomberg the company wants to focus on solidifying its sales presence in the Canadian marketplace. The executive said his company, alongside fellow Canadian producers HEXO (NASDAQ:HEXO,TSX:HEXO), Canopy Growth (NASDAQ:CGC,TSX:WEED) and Aurora Cannabis (NASDAQ:ACB,TSX:ACB), represent 50 percent of the market currently.

“Underneath that, you have 450 licensed producers that are all ankle biters that are taking a little bit of share away. That’s what we have to contend with and make sure we’re selling our products and educating budtenders,” Simon said.

Update in the cannabis ETF world

ETF Managers Group (ETFMG) announced the launch of a brand-new cannabis ETF this past week, the ETFMG 2x Daily Inverse Alternative Harvest ETF (ARCA:MJIN).

Sam Masucci, CEO and founder of ETFMG, said his company offers a “one-stop-shop” for investors who want to pursue the global and US cannabis stock markets.

“The launch of MJIN marks another first-to-market for ETFMG and rounds out our full suite of cannabis investment offerings,” Masucci said.

The new fund is the fourth cannabis-related fund from ETFMG so far, pointing to the firm’s confidence in the sector at the moment. It is designed to provide investors with daily leveraged investment results of two times the inverse of the performance of the Prime Alternative Harvest Index.

“While most investors are primarily focused on capturing the long-term potential of the cannabis industry, many have been seeking a short-term trading vehicle to help hedge, from time to time, the downside volatility that can come along with investing in an emerging sector,” Jason Wilson, ETFMG’s cannabis research and banking expert, said. “As the cannabis industry continues to expand and diversify, so should its related investment options.”

Cannabis company news

• Alcanna (TSX:CLIQ)told its investor base it has reached an agreement to be acquired by cannabis producer Sundial Growers (NASDAQ:SNDL) for approximately $346 million. “Having reviewed various strategic alternatives for Alcanna over the past 18 months, I am confident that the transaction with Sundial offers the best alternative for Alcanna,” James Burns, CEO of Alcanna, said.

• Nova Cannabis (TSX:NOVC) responded to Alcanna and Sundial’s deal. “The Transaction as contemplated is between Sundial and Alcanna and it is not expected to impact Nova’s continued access to the services provided under the master services agreement between Nova and Alcanna nor the potential to access debt financing available through the operating line of credit from Alcanna; both of which were made available to the Company to support its aggressive growth strategy and both of which survive an Alcanna change of control,” the company said.

• High Tide (NASDAQ:HITI,TSXV:HITI) announced the acquisition of Blessed CBD, a hemp-derived CBD product producer based in Europe. “This acquisition marks our entry into the highly lucrative and rapidly-growing UK CBD space which we expect to serve as a launching pad for High Tide to further penetrate the E.U. market for hemp-derived CBD products, while also taking advantage of cross-selling opportunities related to our in-house product lines,” said Raj Grover, president and CEO of High Tide, in a statement about the news.

• Trulieve Cannabis (CSE:TRUL,OTCQX:TCNNF)confirmed the closing of a US$350 million private placement offering for approximately 8 percent of senior secured notes expected by 2026. The capital will be used “to redeem certain outstanding indebtedness of Harvest Health & Recreation” following the acquisition agreement between the two.

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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.