Aphria CEO Irwin Simon hopes to see the U.S. fully legalize marijuana in the next two or three years. If or when that happens, he expects the company to be ready to meet a high level of demand.
Aphria expects U.S. to legalize pot
Simon told CNBC that even if the U.S. does not legalize pot in the coming years as he expects, he is confident that Aphria will still be able to grow its revenues. He made the comments in an interview with Tilray CEO Brendan Kennedy on CNBC's Closing Bell. The two Canadian firms announced in December that they are planning to merge in an all-stock transaction. The combined company will be the world's largest cannabis producer by sales.
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"There's a lot of unknown about what will happen in the U.S., but we'll have the balance sheet, we'll have the knowledge, we'll have the brands, we'll have the technology to be able to make a major impact once legalization happens," Simon told CNBC. "I say full legalization in the next two to three years."
Simon will take the helm of the combined company after the transaction closes. The Aphria CEO expects Portugal, Germany and other countries to legalize marijuana before the U.S. does.
Legalization Efforts Continue
Cannabis stocks have been soaring on expectations that the U.S. would legalize marijuana, which would have significant implications for firms in the industry. According to CNBC, the Amplify Seymour Cannabis ETF has gained more than 120% since Nov. 9, the first trading day after most news outlets declared President Joe Biden to be the winner of the election.
Biden has expressed support for rescheduling cannabis, although other Democrats have said they want to make legalization a priority for this year. Senate Majority Leader Church Schumer said earlier this month that he wants to legalize marijuana at the federal level. Senators Ron Wyden and Cory Booker also wish to make legalization a priority this year.
Several states have already legalized cannabis, either in medical or recreational capacities. New Jersey became the most recent state to allow recreational use of pot earlier this week. Gov. Phil Murphy signed a package of bills into law. So far, Aphria doesn't stand to gain from the move to legalize marijuana in the U.S. because federal law prohibits imports of the drug.
Cannabis stocks were mixed today, with Tilray down some 3% and others rallying less than 1%.