Is the NASDAQ OK with Tilray Selling THC in the US?

The Absurdity of Cannabis Rules and Regulations Continue

“One of our biggest assets within Tilray today is our Nasdaq listing and our liquidity. We traded 70 million shares today- Apple probably traded around 20 Million." Tilray CEO Irwin Simon

Tilray (NASDAQ: TLRY) is going to start selling hemp-based, low-dose THC drinks in the U.S. in October. This is enormous news. Why? Because Tilray, a Canadian company is going to start selling hemp-based, low-dose THC beverages to Americans and apparently the NASDAQ is perfectly fine with this.

Tilray’s CEO Irwin Simon has said before that one of Tilray’s greatest asset is its NASDAQ listing and he would not jeopardize this to launch hemp beverages. So, if Tilray is launching now, it should mean the company has received an “ok” from NASDAQ.

Remember that because cannabis is Federally legal in Canada, Tilray and other Canadian companies have been able to list on US exchanges and benefit from liquidity and capital, while US cannabis companies are stuck trading over the counter or on secondary or tertiary Canadian exchanges.

Due to the 2018 Farm Bill, hemp-derived THC products are federally legal. Mindset even started a fund to invest in hemp beverages earlier this year. Low-dose beverages made from hemp are Federally legal. Now the NASDAQ seems to be agreeing with this and is letting a listed company sell THC if it is made from hemp.

There is a lot happening with hemp regulations right now, from states regulating it and allowing sales like Minnesota, Tennessee and Georgia, to states trying ban it like California, New Jersey and Missouri. And the latest federal update is that Senator Ron Wyden, just released a draft of a bill to properly regulate hemp.

I love the absurdity of cannabis regulations because the more ridiculous they are, the more untenable it is and eventually we will get true reform, and the cannabis industry will be brought into the financial system. We already have a lender like Innovative Properties (NYSE: IIPR) lending to cannabis companies. Now we have direct sales of THC being allowed by a NASDAQ listed company.

This makes me think the odds have dramatically increased that upon rescheduling, we may get cannabis companies like Glass House (OTC: GLASF) and Grown Rogue (OTC: GRUSF) listing on major exchanges. If one company can directly sell THC, why can’t they all?

While no one is paying attention, I think we just got a glimpse that the NASDAQ is ready to start listing US cannabis companies.

One final point:

Since I’m so bullish on hemp beverages does this make me want to jump out of my seat and buy Tilray? Absolutely not.

The company is not launching any of their Canadian cannabis beverage brands such as XMG or Mollo, but instead is launching with new brands.

Then they are also using a brokerage and sales company called Emergent in Texas and Louisiana. Wait, didn’t all of their acquisitions of beer brands give them sales and distribution capabilities and networks? Why would they have to use an outside firm?

It’s all a bit strange and frankly half-baked. This isn’t a surprise as one of the biggest mistakes we see larger cannabis companies make over and over again is a lack of focus and commitment. Tilray should commit to a strategy that makes sense and focus its efforts. Instead, we simply applaud their efforts towards pushing the major US exchanges ever so closer to listing US cannabis companies.