The U.S. market for cannabis is staggering, according to Tilray (TLRY) CEO Irwin Simon — even as it awaits a green light from Congress.
"The U.S. is a $100 billion opportunity in cannabis," Simon told Yahoo Finance Live (video above). "If you look at cannabis today in the U.S., 93% of Americans want medical cannabis legalized and about 63%, 65% want adult use. Today, it's legal in about 33 states, plus D.C. So it's out there that... a majority of people want cannabis legally."
As one of the largest growers of marijuana in the world, Tilray is looking to expand its market share by focusing on recreational- and medical-use cannabis.
But the opportunities aren't constrained to the drug, Simon stressed. There's also a burgeoning market for cannabis-adjacent products in categories such as food, personal care products, and drinks.
"What will happen once the U.S. legalizes, the big companies like Diageo, Brown-Forman, ABI, even I think the Nestle's and the Unilever's will want to be into the cannabis business because they know Gen-Z, millennials, that's very much what they want," Simon said.
Curaleaf (CURLF) CEO Matt Darin echoed Simon's sentiments, saying: "We believe the future is in innovation. And many of these new categories that are coming online are really driving a lot of the growth in the industry."
Darin highlighted the beverages category in particular as a major driver. It's "still a small component of the market," he said, "but we see that as one category that's going to continue to increase over time as new innovation occurs and as they become more widely distributed throughout the country."
Recent earnings suggest growth in the cannabis space — even as the legal status of weed continues to weigh down the industry.
Tilray reported an 8% sales growth in the fiscal fourth quarter, sending the stock higher, though the Canadian company remained unprofitable.
Meanwhile, Curaleaf saw $338 million in revenue in the second quarter and record profitability.
"We're seeing some great momentum coming out of that earlier in the year, where it was a little bit more challenging," Curaleaf's Darin said. "So we're really pleased with the results and the trends for the industry."
'There's never been more bipartisan support'
Still, the legalization question remains a hot-button issue for the industry. Simon said that federal reforms ranging from legalization to decriminalization are a matter of when not if.
"We're very encouraged by what's coming out of Washington, D.C. currently," Darin agreed. "There's never been more bipartisan support for sensible reforms."
Currently, 37 states and D.C. allow for some form of medical marijuana use while 19 states and D.C. allow for recreational adult use, according to the National Conference of State Legislatures.
In late July, Democrats introduced a bill that would decriminalize the substance on the federal level, though there are not yet enough votes for it to pass, POLITICO reported.
Simon noted that legalization would "absolutely" make sense and pointed to Canada as an example of a country that has seen benefits from legislative action.
"If you step back and look at Canada, for instance, it's really the only country where adult-use cannabis is legal," Simon explained. "And over the last 3.5-plus years, it's contributed about $20 billion in taxes, over 150,000 jobs, about $6 billion in infrastructure that has been built out."
"Look at the tax dollars that we're losing here on cannabis not being legalized and the tax dollars that can be in," he added. "All the medical benefits from cannabis today, whether it's pain, anxiety, sleep, in relation to cancer, in regards to different drugs that it could substitute on. So there's a tremendous amount of benefits for cannabis [and] why it should be legalized."
That said, cannabis companies are moving ahead with or without Congress through other product lines and global expansion.
"Even if cannabis does not legalize for the next few years in the U.S., we're going to get tremendous growth out of our spirits business, our beer business, our Manitoba Harvest business," Simon said. "Europe medical cannabis is legal in 20 different countries. And then with Canada. Listen, Canada is the same size as California. And we're not going to stop on the acquisition trail. We're going to look at additional acquisitions to fold in within Tilray brands."
While the effort for legalization effort moves at a slow pace, Darin noted that the existing companies are trying to get a leg up on the competition.
"It is important to be early movers," Darin said. "That's been Curaleaf's strategy since the beginning."
Edwin is a producer for Yahoo Finance. You can follow him on Twitter @Edwin__Roman.