Business
Can Tilray successfully synergize its cannabis, alcohol businesses?
With its right hand, Tilray Brands has consolidated a swath of the Canadian cannabis market, most recently buying Hexo Corp. in its quest to grow market share.
With its left hand, Tilray has gone on a beverage alcohol acquisition bender in the United States.
After several alcohol acquisitions that turned Tilray into one of the largest U.S. craft brewers, the company recently announced an $85 million deal to acquire eight craft beer brands from brewing behemoth Anheuser-Busch InBev.
As the dust settles on Tilray’s latest alcohol purchase, a question lingers for investors: Will the company be able to build meaningful ties between its cannabis business and its alcohol operations, in accordance with statements made by company management?
For now, cannabis remains Tilray’s biggest business in terms of revenue.
During Tilray’s August conference call explaining the Anheuser-Busch transaction, CEO Irwin Simon said the company’s pro-forma revenue of about $860 million includes:
- 30% beverage alcohol.
- 30% Canadian medical and adult-use cannabis.
- 30% European medical marijuana distribution.
- 10% food and wellness.
Diversifying beyond cannabis
Proponents of Tilray’s strategy see promise in the company’s diversification into alcohol.
“First, obviously there’s the potential upside in craft beer itself, and even spirits, where they’ve moved into as well,” especially since some big players such as Anheuser-Busch are focusing less on craft beer, said Owen Bennett, senior vice president of equity research at New York-based financial services company Jefferies.
“And then, second, you’ve got what it can do from a cannabis value-creation perspective. … It is allowing marketing and brand equity-building among mass-market consumers ahead of any (federal) legalization,” Bennett said.
Tilray skeptics, on the other hand, might argue that the company has lost its focus.
In news releases, Leamington, Ontario, and New York-headquartered Tilray has taken to describing itself as “a global cannabis-lifestyle and consumer packaged goods company.”
“I don’t know what a lifestyle company is,” said Rob McPherson, a CPG veteran and former president of Bacardi Canada who has criticized Tilray management.
“Last time I looked, everything is a lifestyle and anything is a lifestyle.”
Tilray did not respond to MJBizDaily requests for comment on its alcohol strategy.
Linking alcohol distribution with cannabis
Tilray management has cited potential for cost synergies between its Anheuser-Busch beer acquisitions and its existing beverage alcohol brands.
Beyond that, however, Tilray has spoken of potential distribution synergies between Tilray’s alcohol and cannabis businesses in the event that the U.S. legalizes marijuana federally.
In the August conference call, CEO Simon asked: “Ultimately, upon (U.S. federal marijuana) legalization one day, is there the opportunity for adjacencies in the THC and CBD world, and having that distribution system, having those manufacturing facilities?”
“Again, we’re not dependent upon it,” Simon continued.
“But there’s a lot of great companies that have been built around the beer category.”
“I think it is the most obvious way for them to leverage these beer investments,” said Vivien Azer, managing director and senior research analyst for New York-headquartered financial-services firm Cowen.
Azer said that the alcohol industry has been lobbying for marijuana to be regulated along the same lines as spirits – in a three-tier system of producers, distributors and retailers.
But potential synergies between Tilray’s existing alcohol distribution network and a hypothetical, future U.S. marijuana distribution system are just that – hypothetical – and would depend on the actual details of any federal legalization law.
McPherson, the former Bacardi Canada executive, pointed out that alcohol distribution “lives at the state level, not at the federal level, so each individual state can have its own individual definition of distribution.”
Given complex state-by-state differences, McPherson suggested that Tilray’s ability to shoehorn marijuana distribution into the existing U.S. alcohol distribution system is by no means assured.
“I think it would be naive to assume that that will happen – and that it will happen at that pervasive level. … Cannabis is going to be complex enough,” he said.
“And you layer that complexity into the already-complex distribution system for beverage alcohol – it’s just nonsensical.
“But it sounds really good if you say it.”
Connecting alcohol, cannabis brands
Aside from a distribution link between cannabis and alcohol, Tilray’s C-suite has hinted – albeit sometimes indirectly – at a more ambitious synergy: linking alcohol brands and consumers with cannabis products in one way or another.
In 2020, after Aphria acquired SweetWater Brewing Co., then-Aphria Chief Financial Officer Carl Merton (now CFO of Tilray Brands after Tilray and Aphria merged) told MJBizDaily that the Atlanta-based craft brewer offered “an incredible reach to a consumer that is already thinking about cannabis, and this acquisition allows us to access that consumer years in advance of federal legalization.”
Similarly, in its late 2022 announcement that it had acquired New York-headquartered Montauk Brewing, Tilray cited plans “to leverage our growing portfolio of U.S. CPG brands and ultimately to launch THC-based product adjacencies upon federal legalization in the U.S.”
Consumers will eventually “see beer with THC in it in the U.S.,” Tilray CEO Simon said on a January 2023 earnings call.
“One day, you’ll see spirits with THC in the U.S.,” he added.
It’s not clear whether Simon meant such beverages would contain both alcohol and THC or only THC.
Tilray has also started experimenting with bringing one of its Canadian adult-use cannabis brands, Good Supply, into the U.S. beer market: Good Supply-branded light beer launched in Connecticut, Georgia and New York in June, with the promise of further launches in Massachusetts and Rhode Island.
On the August conference call, Simon said that “when federal cannabis legalization occurs, (Tilray) will be able to include THC-based products in our beverage and wellness portfolio as well.”
The exact details of how Tilray might align THC with its non-cannabis brands remain a mystery.
However, U.S. beverage alcohol companies are already “pushing the boundaries around brand transferability” within alcohol, observed Cowen’s Azer – for example, the beer brand Coors offers a Coors seltzer product, and the Truly Hard Seltzer brand sells Truly-branded vodka.
“But we don’t have any strong analogues in terms of brand transferability between cannabis and alcohol.”
Tilray is clearly bullish on marijuana drinks, given its recent purchase of the remaining interest in its Truss cannabis drink joint venture from Molson Coors Canada.
Analyst Bennett believes many new cannabis consumers are likely to enter the segment via beverages, since they’re familiar with the format.
“I think having an established beverage presence with existing alcohol consumers that trust the brand should position Tilray to really drive maximum upside from these dynamics, relative to pure-play cannabis companies that are looking to expand into the beverage space,” Bennett said.
On the other hand, skeptics point out that any Tilray plan to link alcohol and marijuana brands in the U.S. after federal legalization hinges on an event that has not yet occurred.
“The first thing that has to happen is, the U.S. has to actually federally legalize – when that’s going to happen is anybody’s guess,” said McPherson, the former Bacardi Canada president.
McPherson pointed out that federal adult-use legalization took years even in Canada, where Justin Trudeau’s Liberal government had a parliamentary majority (and a specific campaign promise surrounding cannabis legalization).
Even in the event that Tilray does extend its alcohol brands into cannabis, McPherson suggested that wouldn’t necessarily be a slam dunk.
“There’s efficiency and there’s effectiveness, and a lot of brands go the efficiency route,” he said, “and you start to see the same brand name playing across multiple categories because it’s efficient: ‘There’s an existing level of consumer awareness, so we’re going to try to leverage that.’”
But branding efficiency can lead to reduced brand effectiveness, McPherson argued, “because you’ve had to cut a wider swath, you’ve had to make more compromises, you’ve had to shave off a lot of the sharp edges that end up catching consumers’ attention.”
Even if crossovers between Tilray’s alcohol brands and cannabis never play out, the alcohol assets have stand-alone value.
Cowen’s Azer said that Tilray’s beer and liquor acquisitions give it “exposure to the U.S. alcohol segment, which generally grows at a mid-single-digit (compound annual growth rate).”
Analyst Bennett acknowledges that Tilray receives “some criticism that they’re diversifying out of cannabis.”
“But No. 1, they’re very open that they’re no longer a cannabis business,” he said.
“No. 2, as a shareholder, all you should really care about is, is this company generating value? And are they sticking to the strategy they lay out to investors?”
Source: https://mjbizdaily.com/can-tilray-successfully-synergize-its-cannabis-alcohol-businesses/
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
AI & Technology
Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations
Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).
The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.
Trial Push Despite Multi-Million Euro Settlement
The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.
Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.
A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.
Allegations of VAT Evasion Through Marketplace Sellers
At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.
Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.
Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.
Italian Government Named as Affected Party
In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.
Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.
Multiple Investigations Add to Pressure
The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.
Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.
In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.
Amazon Denies Allegations
Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.
Broader Impact on Europe’s Digital Economy
If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.
With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.
Aviation
IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?
Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.
Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.
Root Cause: IndiGo’s Market Monopoly
The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.
This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.
Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.
Government Intervention and Regulatory Weakness
The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.
Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.
The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.
If Telecom Giants Fail: A National Paralysis
The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?
If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.
In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.
E-commerce Monopoly: Another Fragile Ecosystem
The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.
Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.
A Wake-Up Call for Regulators
The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.
As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.
Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.
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