Tilray is buying a stake in fancy pot retailer MedMen, planting the weeds for legalization
![_Just planting the weeds [Maskot via GettyImages]_](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/6W1EVzMIwmjyEq0W71uB50_1_GettyImages-551424153.jpg)
Not related to Don Draper... Canadian cannabis giant Tilray is dropping $166M for a minority stake in American pot retailer MedMen. Tilray is a weed cultivator, supplier, and distributor. MedMen is basically like an Apple store for cannabis. You order through sleek tablets on wooden tables, in minimalist stores with floor-to-ceiling glass windows filled with dozens of associates in MedMen tees. Instead of AirPods, you've got $30 elderberry weed gummies.
American clout... Tilray shares jumped 5% after the deal was announced. The investment would give Tilray a popular retail footprint in the US if cannabis is legalized at the federal level. Marijuana is legal in 18 states for recreational purposes, but is still viewed as a Schedule 1 drug by Uncle Sam — the same level as LSD and heroin.
- Hash it out: MedMen operates 24 stores across CA, FL, NY, AZ, NV, and MA. It did $157M in sales last year, but its quarterly sales are shrinking — and it's unprofitable. Still...
- Tilray thinks the investment is worth it: "Once legalization happens, it gives us the potential to own a great company that we can take into the rest of the world.” Key word: once — not if.
Great opportunities require great preparation... and Tilray is planting the weeds for federal legalization in the US. Tilray thinks it's a “when, not if” situation. This year, it merged with Canadian Aphria to create the world’s largest cannabis company — and expand its reach in Europe and the US, where more legalization is likely (another weed, planted). But until US legalization happens, growth will likely continue to be sluggish for pot companies.