Bold Business Logo

Tilray and Canopy: A Tale of Two Cannabis Companies

It was once akin to a forbidden fruit, accessible only if you knew someone who knew someone. But social stigma has given way to scientific fact, and now cannabis use has become more commonplace — and far more legal. As a result, the industry has grown dramatically. Two of the largest cannabis companies in the world are Canada’s Canopy Growth Corporation and Tilray Inc. Each possesses a market capitalization that exceeds $11 billion dollars. Yet, while dominating the industry, the two largest cannabis companies are boldly heading down divergent paths.

Tilray and Canopy: A Tale of Two Cannabis Companies

In Canada, 4.9 million consumers spent an estimated $5.7 billion on both medical and non-medical cannabis in 2017. That’s big business. And not only are more distributors entering the market, but many of these cannabis companies are revolutionizing the way customers can consume the product. For Canopy, that means diving into the beverage sector. For Tilray, their fortunes lie in the pharmaceutical space.

Canopy: Combining Beer with Cannabis

Canopy is no new contender in the industry.

They are among the top marijuana growers in Canada, and export globally. Their Q2 revenue for 2018 tops out at $25.92 million, which is a uptick of 63.27% from the previous year. They are the first cannabis-producing company to be listed on the New York Stock Exchange.

But though they made their presence known selling medical marijuana, they may soon be treading a different path.

Recently, Constellation Brands, owner of several alcoholic drink brands such as Modelo and Corona, acquired over 50% ownership of Canopy through share purchase. Constellation and Canopy have been tight-lipped about what they might have up their sleeves. However, with recreational marijuana use now legal in Canada, and recreational sales projected at hitting nearly $4.3 billion in the first year, it’s a no-brainer what happens next. We’ll soon likely see the beverage company and one of the largest cannabis companies around roll out a cannabis-infused beer.

Tilray: Leaning Towards the Pharma Sector

Recreational cannabis use and the beverage industry might seem like a match made in heaven, but nothing says growth potential like a trip into the pharmaceutical sector. That’s the path Tilray has decided to take.

Even though it does not have the largest production capacities in the industry, Tilray has one of the largest market values among all competing stocks. Instead of growing and maintaining their own product, they purchase it from other companies such as Supreme Cannabis, with whom they recently entered into a supply agreement.

Tilray and Canopy Growth Corporation are two of the largest cannabis companies, but they walk divergent paths.
Supreme Cannabis is on board with Tilray’s entrance into the pharmaceutical cannabis space.

Tilray’s focus has narrowed to global medical cannabis research and development. In fact, they recently signed a collaboration agreement with Sandoz Canada, one of the fastest-growing pharmaceutical companies in Canada. As Canada still struggles to find sources to support the industry’s rapid expansion, Tilray’s investment into the Canadian pharma industry is a strong strategic move.

“I definitely expect additional strategic investors to invest in the industry in the coming months.” – Brendan Kennedy, CEO of Tilray, Inc.

The Last Hurdle in the U.S. Market for Cannabis Companies

Though business is booming in Canada, a legal hurdle remains just south of the border. And it centers around the Food and Drug Administration and Drug Enforcement Agency’s classification of marijuana, and the components therein.

THC is the psychoactive chemical in the cannabis plant and has traditionally been the more sought-after ingredient among consumers. But the cannabis industry has focused on extracting and distributing the other main ingredient of the cannabis plant: CBD.

CBD is the component that delivers the therapeutic affects many customers and patients consume the product for.

Across the U.S., many companies have begun selling the ingredient in the form of pills, ointments, gels and recently, food and beverages. However, because CBD has not been approved by the Food and Drug Administration, CBD has been banned as an additive in several states.

For example, California may have legalized recreational marijuana, but it still prohibits CBD.

However, once CBD is inevitably reclassified, the floodgates will open…

… And Tilray, with their pharmaceutical focus, is extremely well-positioned for that. As one of the largest cannabis companies north of the border, they’re on the precipice of even greater growth once the last legal hurdles are removed.

It Was the Best of Times, It Was the Best of Times

While the cannabis plant is nothing new to society, the cannabis industry has just begun carving out its slice of the world market. And as the legalization of recreational and medicinal cannabis spreads, the industry will only get bigger.

With Aurora Cannabis Inc. partnering with Coca-Cola for a possible dive into the beverage market, it’s clear Canopy’s strategy is a viable one.

The same holds true for Tilray, their pharma sector alignment, and the impending legalization of CBD additives in the U.S.

The two largest cannabis companies may be taking different paths, but they’re forging ahead boldy.

Is Having Joint CEOs a Viable Model for Companies or Asking for Disaster?

Oracle,, Whole Foods, and Samsung—what do all these four giant companies have in common? Apart from being internationally known brands, these industry leaders are governed by the rare existence of joint CEOs. Across all industries, CEOs are thought of as singular authority figures who champion their own companies.

When we say CEO, we think of Mark Zuckerberg, Indra Nooyi, Jeff Bezos, Ginni Rometty, Elon Musk, Mary Barra and Satya Nadella—leaders who don’t share their company positions with another person. However, in some companies, two leaders sharing the same post contribute to their success. But is it the way to go?

Lindred Leura Greer Discusses Joint CEO and Dual-Leader Setup
Lindred Greer Standford Graduate School of Business

Can a Company Have More than One CEO?

Co-leadership isn’t a brand new idea. Various corporations and even startups have been employing this leadership model to innovate how companies operate throughout the hierarchy. Companies such as Research in Motion, American Financial Group, Birchbox, and KKR & Co. attribute their success to this joint CEO management model.

There are some reasons why this co-CEO model works for some companies. First, they acknowledge that a CEO’s job has a vast coverage and is impossible to fulfill by just one person. CEOs usually have a hand in strategies taken by every department in their companies—a duty which could be difficult to be on top of. Companies with this leadership model allow its co-CEOs to divide and conquer responsibilities, covering more ground than just one person ever can.

Author of “The CEO Within” and Professor at Harvard Business School, Joseph L. Bower says, “If one CEO is on a global tour of facilities, the other can deal with the government at home. It also increases the range of talents in the box. A visionary can be complemented by a hands-on operator.”

The Pros of Having Joint CEOs

Having two CEOs would also imply that a company is adopting values of diversity and inclusion, where multiple perspectives on certain issues are welcome. This proposition helps generate and flesh out clear and concrete ideas that benefit everyday operations.

a photo quote by Joseph L. Bower in the discussion of having joint CEOs in a company
Joseph L. Bower on the idea of having joint CEOs

Having two at the helm of the company means more eyes to check on the organization’s weaknesses and strengths. If the partnership also proves to be dynamic and complementary, one CEO could make up for what the other lacks in terms of expertise and management style.

Joint CEOs could work—it actually makes sense for many corporations and startups. However, it takes a lot of patience and willpower to make the partnership work as smoothly as it possibly can.

The Downside of Joint CEOs

Nonetheless, no matter how highly capable or in sync co-CEOs can be, two CEOs mean essentially two separate egos. Having two separate people with two personalities and perspectives, and who most probably say different things can be the root of competitiveness, mismanagement, and miscommunication.

When two people share the same position, power struggles always seems inevitable. Each one may come in on unequal footing—in terms of salary, clout, expectations, expertise—and this could cause someone to rise and the other to fall back. They may step on each other’s toes trying to make quick decisions for the company or have differing opinions of strategic direction.

If one CEO falls short, he or she may feel disenfranchised from the other and the rest of the company. Both can become paranoid or fearful of each other, or even resentful towards one another. These joint CEOs can be the source of work misalignment.

More Significant Cons of Having Joint CEOs

In assessing the situation, the co-CEO model could veritably cause a lot of confusion to the rest of the company and customers. Middle managers and staff members may have difficulty determining who to report to; customers would find it confusing who to talk to. Co-CEOs may not always confer with one another to align what they know and what they should do. Plus, if one CEO is more visible or holds more deciding power, this creates an imbalance at the top level, which will eventually trickle down to rank-and-file.

Co-founder and CEO of Zenger Folkman—an organization that provides high-impact strengths-based leadership development and corporate training to different businesses and industries—, John H. “Jack” Zenger, D.B.A. clearly points out a huge con when he said “…one person is going to be held primo and the other person is going to play a secondary role. To me, it seems like it raises an unnecessary set of issues that aren’t really sustainable in the long run.”

a photo quote by John H. Zenger in the discussion of having joint CEOs in a company
John H. Zenger on the notion of having joint CEOs

Undoubtedly, having two experts in one position is quite redundant and can be a point of contention—financially and strategically. Significant decision-making at the top level is usually a solitary activity. Reaching a clear consensus or a unanimous decision on major strategies, solutions, and plans for the company with another person can become tedious. It can also cause the business to slow down or even miss great opportunities.

A Moot Point

Companies with co-CEOs may have struck gold in some cases but there are plenty of other examples of the experiment failing. People who work so in sync, and at such high positions, are difficult to find. However, people who have achieved a high level of success usually have egos to manage and protect. Thus, knowing that another person is occupying the exact same spot can be a threatening notion.

In reality, companies with joint CEOs usually find failure in the model because it requires a different level of commitment and trust, and a shared set of values and goals for it to work. They must work complementarily, know when to compromise, and always keep a balanced and united front—a best case scenario rarely achieved.

The Bold Bottomline on the Matter

Joint CEOs may not be a sustainable model for most companies, and rightly so. There are already countless aspects within the company that may need extra attention—and being experimental with the org chart isn’t one of them.

Hence, the bold and better move, we believe, is that having one CEO is, most of the time—if not all the time—the better option. Once a company has found and placed the best person for the position, everything that makes up a well-oiled and growing business will follow.

After all, as Theodore Roosevelt once aptly said, “The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint to keep from meddling with them while they do it.”

If you already have that kind of CEO, there would be no need for another one.


Are CEOs A Great Idea Or A Total Disaster?

Salesforce Splits CEO Role: Pros And Cons

Co-CEOs Might Be Increasing, But Do They Mean Twice The Trouble?


Sears in Trouble – An Empire on the Brink of Extinction

Sears is drowning. Since 2010, the iconic retailer that changed how America shopped for much of the 20th century has lost $11.7 billion. Sales have tanked causing Sears to close more than 2800 stores over the past 13 years. As a result, a New York court received Sears’ filing for bankruptcy this month. Is the Sears’ bankruptcy filing for Chapter 11 an opportunity to revive a dying business model? Or is Sears destined for the same graveyard fate as companies like Sports Authority, Radio Shack and Toys”R” Us?

The Retailer that Changed America

Sears has been in business for 132 years…that’s a long time. Therefore, many are shocked to hear about the Sears’ bankruptcy filing. Sears filing for bankruptcy provides tangible evidence that times have changed. An outcome many analysts believe could have been avoided with better leadership and stronger growth strategy.

Sears was, perhaps, just as disruptive in its heyday as companies like Amazon and Walmart are today. In essence, the Sears’ bankruptcy filing is little different from mainstream merchants having to close when Sears rose in prominence.

Founded in 1886, Sears quickly evolved from watches and jewelry to all sorts of retail merchandise. Their innovative approach to catalog sales completely revamped how consumers shopped. This was especially true for rural consumers. Subsequently, Sears fueled the suburbanization of America after World War II. Being shopping mall anchors, Sears provided staple brands like Kenmore, Craftsman, and Whirlpool. For those who experienced Sears’ dominance then, the Sears’ bankruptcy filing is hard to fathom.

sign that says Sears store closing demonstrating Sears' filing for bankruptcy
The business that has been around for 132 years is signing off. Is modern technology to blame?

The Big Decline – Increasing Pressures to Change

As is the case for many businesses, a single event does not account for Sears’ bankruptcy filing. Instead, Sears’ decline has been occurring for years if not decades. Sears has been hemorrhaging since the 1990s and was actually taken off the Dow Jones Industrial Average list in 1999. Faced with “big-box” store competition from Walmart and Home Depot, Sears failed to keep pace with change. Consumers quickly abandoned Sears for the better prices and conveniences these other companies offered.

Of course, these more modern retailers were not the only reason for Sears’ bankruptcy filing. Like many retailers, pressure from the online giant Amazon played a significant role in Sears’ filing for bankruptcy. But Sears’ efforts at digital transformation and online shopping experience for consumers has been too little, too late. Sears no longer offered the discounts, conveniences, and accessibility customers required. The potential for a Sears’ bankruptcy filing was already growing as early as a decade ago.

Eddie Lampert quoted in saying what one needs in operating a company
Eddie Lampert steps down as CEO of Sears but says he will continue to be actively involved as Chairman of the Board of Directors.

Self-Inflicted Wounds – Adding Insult to Injury

Sears’ bankruptcy filing was not just the result of changing times and competition. In part, Sears’ reaction to these competitive pressures played a large role in its decline. Rather than leveraging assets into modern strategies, Sears sold off many of its best holdings.

Advertising costs were cut, and hundreds of stores closed. Instead of reinvesting in innovation and modern technologies, Sears pursued a cost-cutting approach. As a result, customers flocked to Sears’ competitors leaving many of Sears’ stores ghost towns.

Sears’ filing for bankruptcy reflects an accumulation of loss for the company in recent years. In 2014, Sears cut its clothing line Land’s End and ended its anchor brand Craftsman in 2017. Whirlpool, once a cornerstone brand within the Sears’ family, pulled out of Sears last year as well. Chairman and former CEO Eddie Lampert and the Sears’ board have been looking for a potential buyer of its Kenmore brand for some time.  Reportedly, Sears has been losing over $125,000 a month forcing Sears’ bankruptcy filing. Given this “head in the sand” approach, Sears’ filing for bankruptcy is not that surprising.

The Likely Outcome Isn’t Pretty

According to Sear’s bankruptcy filing, Sears has over $11 billion in liabilities. In contrast, Sears only has $7 billion in assets. For some companies, surviving Chapter 11 bankruptcy is viable when competitive strategies and business models are employed. However, Sear’s bankruptcy filing offers little such hope. For one, most of Sears’ assets have notable liability liens associated with them. Secondly, Sears has repeatedly failed to adopt the innovation and dynamic shifts required to compete in today’s retail environment.

Sears’ filing for bankruptcy comes in the wake of other notable companies struggling to survive in the age of digital transformation. JC Penney offers a perfect example of a company that suffered from a failure to change a dying business model. But the outlook for Sears is not favorable. The company is trading at less than $0.24 per share, and its current market cap is $39.88M with an enterprise value just north of $5B. Without a doubt, Sears tremendously shaped America’s consumer buying patterns throughout the 20th century, but without the commitment to change with the times, Sears will likely become a dinosaur of the past. Sears’ filing for bankruptcy may simply be a formality as this sad chapter comes to a close.

The Battle for E-Commerce Market, Will Ahold Delhaize Merger Win?